KPMG restricts salary increases to promoted staff

KPMG restricts salary increases to promoted staff
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Peninsula Team, Peninsula Team

(Last updated )

KPMG is limiting pay rises to staff who have been promoted in the last year, meaning that only 6% of staff will get an increase

Only staff who have been promoted will receive a pay rise and the bonus pot will be reduced as was first signalled in May.

KPMG promoted over 1,000 staff in the last 12 months out of its total headcount of around 16,000 staff.

In total, 1,005 partners and staff were promoted in 2022, including 56 new partners and 116 directors. A further 833 staff were also promoted, while 564 graduates and apprentices progressed following successful completion of their exams this year. During the financial year, an additional 42 external partners were also hired into the business. The firm now has 826 partners, up from 786 last year.

A KPMG UK spokesperson said: ‘To attract and retain the best talent, we benchmark our salaries each year to remain competitive and we continue to invest in our people. In light of softened market demand this year, any pay increases have prioritised those who have been promoted.

‘We will be rewarding eligible colleagues for their efforts this year with a bonus. However, reflecting the challenging economic and market environment, this will be lower than in previous years.’

The salary freeze came after KPMG announced plans earlier this month to restructure the £1.2bn consulting and deals business into a single advisory unit from January 2024. In October, the firm confirmed that it was consulting with staff on plans to cut at least 100 jobs from the deal advisory business due to a ‘challenging economic environment’, which had resulted in a slowdown in mergers and acquisitions activity. There are over 1,700 staff employed in the UK deals advisory team.

The firm was also hit with a record fine of £21.4m by the audit regulator for ‘seriously deficient’ audit work on Carillion financial statements for the years 2013 to 2017, before the outsourcer collapsed in January 2018. This was the largest fine ever issued by the Financial Reporting Council. The original fine was set at £30.6m but was reduced for cooperation with the investigation.

At the time, KPMG senior partner Jon Holt said the findings were ‘damning’ and ‘our audit work on Carillion was very bad, over an extended period’.

KPMG reported revenues of £2.72bn, up 12% year on year and pre tax profits of £449m for year end July 2022. Average partner pay was £717,000. The Big Four firm is ranked fourth largest in the UK. The results for FY23 are due to be released in January.

Visit BrAInbox today for answers to questions on promotion, like Is a promotion a permanent change to an employee's contract?

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