KPMG is the fourth largest accountancy firm in the world, turning over $29 billion in 2018. In the past week they have announced plans to have over one hundred employees hand in their work mobile phones in an effort to improve profitability and get closer to meeting long term growth targets.
This cost-cutting decision has come about in an effort to reduce KPMG’s costs, which, in comparison to the other big four accountancy firms, are particularly high. The firm are therefore hoping that such a strategy will help improve their market position, in what is, a highly competitive market.
Additionally, recent events have damaged the company’s reputation, as they were fined £5 million and severely reprimanded in May following the collapse of construction group Carillion and for their audit failings at Co-op Bank.
KPMG also plans to cut around 200 administrative support staff. These plans go back to last year as KPMG were reportedly threatening UK staff with £100 fines if they are late to file their time sheets, which record how long they spend on tasks.
Such a policy turned out to be unsuccessful for KPMG, whose employees were only willing to go so far in the name of cutting company costs. As such, the policy was dropped and swapped for a different policy that charged staff for lost IT equipment such as computer privacy screens.
These are all efforts from KPMG to cut costs in order to improve profitability.
The company has informed staff and explained the changes: the following memo was sent to them;
“To realise our growth ambition, we need to improve our profitability by building a leaner, more responsive cost base. This will help us free up funds to invest in the future of the firm – to recruit and retain the best talent and invest in big, integrated solutions’
KPMG have made particular efforts to give staff notice of this mobile phone policy, so employees who don’t own a personal phone have the time to purchase one.
The policy is set to exclusively affect those employees that work only in office hours and those that don’t travel.
A spokesperson from KPMG has said that investments have been made over the past year to support staff in enabling them to work from home to the office with ease through the introduction of new technologies.
However, this has raised several concerns for stakeholders over data protection and its role in this new technology.
KPMG hope that his cost cutting initiative can lead to the investment of funds into other aspects of the running of the company and the future growth of the firm. This could include investment in the recruitment and retention of staff which would impact future innovation and decisions.
KPMG are not the only ones adopting aggressive cost-cutting policies. One of the other Big Four consultancies PWC have also made strategic decisions surrounding technology, such as getting rid of landlines.
The use of new and improved technology seems to be a trend in the industry as companies, especially the Big Four are making efforts to stay current in order to provide the most efficient service to clients.