Home Business $1mn Partner Pay Does Not Shield Deloitte from Challenging Conditions

$1mn Partner Pay Does Not Shield Deloitte from Challenging Conditions

$1mn Partner Pay Does Not Shield Deloitte from Challenging Conditions

Deloitte’s UK and Switzerland branches anticipate ongoing “challenging” conditions in the UK for 2023, despite partners at the accounting firm earning over £1 million on average for the third consecutive year. Partner pay remained steady at £1.06 million as the number of partners sharing profits increased from 672 to 714. The firm reported a 6% rise in distributable operating profit for the year ending May 31, reaching £756 million, with revenue increasing by 14% to £5.6 billion. Deloitte is the only one of the Big Four firms to report average profit per partner above £1 million in the UK, and this figure includes a one-off £200,000 gain per partner from the sale of a restructuring business.

Although Deloitte’s CEO, Richard Houston, highlighted a strong performance in the first half of the financial year, he noted a slight downturn in the second half. The firm’s revenue growth for the second half was approximately 9%. Houston cautioned that the year ending May 31, 2024, is expected to be more difficult due to cost of living concerns, slow economic growth, rising geopolitical tensions, and the climate crisis. Deloitte previously announced plans to cut 800 consultancy-related jobs in the UK, in response to the ongoing challenging market conditions. EY and KPMG have also recently shared plans for job reductions.

Deloitte’s UK and Switzerland businesses are part of the larger Deloitte North and South Europe business, encompassing Europe and the Middle East. The UK and Switzerland unit is required to disclose more about its financial performance compared to other parts of the global Deloitte network, as dictated by UK regulations. In the UK, revenue for the 2022-23 fiscal year increased by 13% to £4.84 billion, while Switzerland saw a 20% growth in revenue to £772 million. The core audit and assurance business experienced the strongest growth among sectors in the UK, with a revenue increase of 20% to £869 million, and the consulting sector grew by 16% to £1.6 billion, driven by significant demand in financial services, energy and resources, and the public sector.

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