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Cost-saving KPMG hangs up on staff mobiles

KPMG has taken back hundreds of staff mobiles in a cost-cutting measure which the Big Four firm hopes will “free up funds to invest in the future of the firm”.  

30th Sep 2019
Practice Editor AccountingWEB
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Telephones in a bin
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The Big Four accountancy firm, which has suffered a number of big fines in recent memory, is cutting back its cost base by taking back mobile phones from junior administrative and back-office staff.

KPMG notified employees in a memo to the change, explaining that “To realise our growth ambition, we need to improve our profitability by building a leaner, more responsive cost base”.

KPMG explained that through cost-cutting measures like this one, the firm will free up funds to invest in recruitment and staff retention. The memo also alludes to further cuts if it wants to get a grip on its cost base.

“Right now, our cost base is the most expensive of the larger KPMG member firms and the most expensive of the big four in the UK. We regularly review our ways of working to ensure they are market-competitive and affordable for the business.”

Front-line employees who need to be contacting outside working hours will keep their mobile phones, however. Those now without a phone have less need for a device, anyway. According to KPMG’s spokesperson: “Over the past year we have invested in a range of technologies to support our people, which enable them to work from home or the office with ease.”

Presumably, this new technology would prevent staff from using their private phones which could prompt further questions around GDPR and client data, not to mention how it will prevent employees from switching off outside of work.

End of the landline?

KPMG’s decision to call time on mobiles diverges from its Big Four cohort PwC’s decision last year to do away with landlines at office desks. By taking away a modern way of working, accountant and fair tax campaigner Richard Murphy reckons the phone-less KPMG worker “may as well become a ghost”.

“They might also take the hint that if their employer is now making them pay for a basic tool of the trade then either that employer is facing really hard times or they, personally, are really unwanted,” wrote Murphy on his blog. “Either way the messaging is dire in a firm where the average partner earnings still exceeds £600,000 a year.”

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But then, morale has been hit with another recent cost-saving measure. A few weeks ago, KPMG announced plans to shed between 200 –to- 250 of personal assistant roles. The centralisation of these roles will mean partners, particularly in the non-client facing roles, will no longer have access to a personal assistant and will have to file their own expenses.

KPMG woes

All this comes as KPMG prepares to release its financial results in December, and although the firm saw profits grow 18% to £356m last year, its pockets and reputation went on an opposing trajectory.

In the last 12 months KPMG has routinely forked out on audit fines -- the most recent of which being £6m for the auditing of automobile insurer Equity Syndicate Management -- and continuous to be dogged over its audit of government contractor Carillion.

Yet the belt-tightening measure is in stark contrast to when the phones were first handed out at multi-million-pound party at the O2 arena. The ‘team-building’ event had entertainment from Tinie Tempah, Madness and Florence and the Machine, and a motivational talk by Jamie Oliver on training unemployed young people.

KPMG workers reminisced about this swanky party on Twitter, with one attendee calling the star-studded event “probably one of the most surreal days of my career”.

What do you think? Are mobiles phones a tax-free perk for employees or have you opted against splashing out on mobile phones?

Replies (13)

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By mkowl
01st Oct 2019 09:23

Love the fact it is the lowest paid workers who are effectively funding the audit fines. Though the poor partners having to fill in their own expense claims is one of the most first world problems I have heard about in a while

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By Ian McTernan CTA
01st Oct 2019 09:27

Will this entire measure save the equivalent of one average partner's drawings?
Are the partners now travelling economy? Staying in budget hotels? Attending less 'conferences' abroad?

Profits up 18% (driven by the work of the 'cost base').

I bet KPMG 'cost base' staff are feeling really wanted about now. This is fairly typical of the larger firms, who view support staff as a 'cost base' rather than the valuable resource that enables the rest of them to function, and look to 'save money' by cutting away the people who actually matter rather than examining the higher levels of management.

And partners having to fill in their own expenses claims...I can just imagine what a mess that will cause!!

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By Gerry Brown
01st Oct 2019 09:52

Perhaps instead of a mobile phone they'll be given a free (?)Manual of Auditing.

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By unclejoe
01st Oct 2019 10:10

Is this the same KPMG that advises people how to run companies? You could not make this up. It is the 1st October and not 1st April, isn't it?

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By AnnAccountant
01st Oct 2019 11:08

When I was there, they spent money on a "Who moved my cheese" book for every staff member, then announced job cuts and a slimming down of the annual drunken "away day"

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By AndyC555
01st Oct 2019 12:12

"accountant and fair tax campaigner Richard Murphy reckons the phone-less KPMG worker “may as well become a ghost”."

Presumably this is the same self-proclaimed tax expert Richard Murphy who wrote on his blog on August 19 that;

"National insurance is payable on earnings over £6,136 per annum in 2019/20,"

I'm not sure that employees earning £8,632 p.a. would have agreed with him that his proposal of NIC at 4% on amounts above £6,136 would make them better off as he said it would.

No doubt I'll be accused of pedantry for pointing this out but I happen to think that a grasp of the basics really ought to come before any claim to be an expert.

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Replying to AndyC555:
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By sculptureofman
01st Oct 2019 13:05

I am surprised by how often I see this rent-a-gob quoted on this site. He is a self-proclaimed tax expert who only ever pops up to give his two-cents in media articles on tax.

I remember a few years ago he was promoting some crack-pot scheme for businesses to have a stamp to show they had paid their 'fair share' of taxes (as decided by him)

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By ireallyshouldknowthisbut
01st Oct 2019 13:11

It reminds me to the late 90's when I worked there.

1st years were not allowed laptops.
2nd years had hand-me-downs from the 3rd years (if you were lucky)
3rd years got hand me downs from the middle managers

You often sat there writing stuff out long hand, only to type it in when 'the computer' was free, and the thing crash on you about 5 times a day as it was well past its best in an environment where computers used every ounce of oomf to run things.

The partners of course could not see what the fuss was about, and the need for all these computers for the younger staff who should be ticking or something.

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Replying to ireallyshouldknowthisbut:
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By Dib
01st Oct 2019 13:48

ireallyshouldknowthisbut wrote:

It reminds me to the late 90's when I worked there.

1st years were not allowed laptops.
2nd years had hand-me-downs from the 3rd years (if you were lucky)
3rd years got hand me downs from the middle managers

You often sat there writing stuff out long hand, only to type it in when 'the computer' was free, and the thing crash on you about 5 times a day as it was well past its best in an environment where computers used every ounce of oomf to run things.

The partners of course could not see what the fuss was about, and the need for all these computers for the younger staff who should be ticking or something.


Hard to believe this was the 1990's. When I worked at another Big 4 late 80's to mid 90's everyone had a decent laptop!
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Replying to Dib:
By ireallyshouldknowthisbut
01st Oct 2019 16:09

it might just have been our (regional office). In the first year we were carrying about Macs in huge bags. [The square ones which with a big screen with a floppy drive below it)
One Mac per audit team was about it. Juniors just did time sheets and read (staff) emails on it. O, and carried the thing. They were heavy when you had to park a way off, and carry your brief case (remember those?) plus a box of files too.
Most of the working papers were manual. This was 95-98.

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By AndrewV12
01st Oct 2019 14:17

'KPMG notified employees in a memo to the change, explaining that “To realise our growth ambition, we need to improve our profitability by building a leaner, more responsive cost base”.'

More responsive cost base..... whats that Chinese for.

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Replying to AndrewV12:
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By leon0001
02nd Oct 2019 14:55

Well, they could hardly text them.

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By SouthCoastAcc
02nd Oct 2019 14:36

KPMG have always been the same, I couldnt get a new mouse when I was there due to cost cutting.

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