Consulting firms Deloitte, KPMG, PwC, EY defer salaries and promotions, Partners take pay cuts
The Indian arms of the four large consulting and auditing firms, PwC India, Deloitte India, KPMG, and EY India have all decided to defer their employee appraisal cycles, which includes deferring promotions and bonuses, because of the COVID pandemic- CNBC reports.
While all have refrained from giving increments this year, Deloitte India is the only firm that has given out promotions to 10 percent of its employees, and increments of up to 20 percent have been given to those promoted. KPMG and EY are yet to decide about the promotions or increments.
- The Company will be paying performance bonuses to staff for FY20 and the distribution will start in September 2020 as usual.
- Increments will be recalibrated this year and promotions will be considered when there is a visibility of profits in the line of business.
- The Company plans to pay the performance bonus in two installments (Sept 20 & Dec 20) for levels up to managers.
- For senior managers and directors, the company will pay a performance bonus in six monthly installments.
- There will be no other increase in fixed pay this year.
In a conference call this week to all employees, Deloitte India announced its strategy to combat the COVID-19 pandemic period. The company said it will be paying performance bonuses to staff for FY20 and the distribution will start in September 2020 as usual. The Deloitte management also communicated to employees that increments will be recalibrated this year and promotions will be considered when there is a visibility of profits in the line of business.
A spokesperson for Deloitte India confirmed the developments and said, “We will have cash flow challenges this year, and with a view to conserve cash flow, we plan to pay the performance bonus in installments for levels up to managers. We hope to pay it in two installments, i.e. September 20 and December 20.”
“For senior managers and directors, we hope to pay a performance bonus in six monthly installments starting in September 2020. The decisions are based on our current visibility of cash flows because no one is really certain about how long this uncertainty will last. We hope to live by whatever we have recently committed,” said the company spokesperson.
“There will be no other increase in fixed pay this year, this is in line with our strategy outlined last year of moving towards a performance-based pay.” the company said in the call conference.
Deloitte spokesperson said, “As part of the annual performance review, which was completed as scheduled, Deloitte India will reward and compensate our people per our internal assessment criteria. Even in these times, we will go ahead with promotions and performance pay in a prudent manner recognizing the performance of its people and their commitment to serve.”
- Senior partners may forgo some of their incentives and bonuses.
- Senior partners at KPMG India have taken a voluntary pay cut of between 15-20 percent.
- The appraisal cycle could also be deferred.
A spokesperson from KPMG India said, “Like every other business, we are watching the situation closely. Our aim is to emerge stronger from the uncertain business environment and our decisions continue to reflect the needs of our business. While we expect our partners to make bigger sacrifices, we are committed to ensuring that our rewards are competitive for all our people. We will evaluate and decide on the best possible options around the timing of increments, promotions, and bonuses.”
The company is still in the process of reviewing the situation and deciding on what has to be done with respect to promotions and increments. KPMG India will take a decision next week.
- PwC has deferred bonuses for FY20 and increments to all employees in India for FY21.
- Partners and executive directors have taken a voluntary pay cut of up to 25 percent.
- Deferment of promotions.
The company has indicated to employees that it is studying the situation and will decide on what needs to be done in the days to come. Shyamal Mukherjee’s comment in April. He had talked about the impact of COVID 19 on the company in a LinkedIn post, “We at PwC India have initiated proactive measures that will help navigate the uncertainties, keep all employees safe and make our organization more sustainable.”
“We have worked out some interim measures which include deferment of promotions, increments, and bonus till a point in time one gets certainty around the business. I am sure this will hold us in good stead. We will continue with all our efforts to keep our employees safe and engaged in this difficult period. We are very proud of our people for their understanding and support,” he added.
- Senior partners have taken a voluntary pay cut of up to 20 percent.
- Promotions that are typically effective before the start of a new fiscal are being deferred to 1 June 2020.
The company is evaluating the situation. No decision has been taken with respect to increments and promotions as the cycle starts by September for the company. It will be giving out the variable pay component to all employees over a period of time. Senior partners have taken a voluntary pay cut of up to 20 percent.