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As of 2014, Deloitte is the largest professional services firm in the world by revenue. What began in the 19th century as stand-alone accounting offices has merged and evolved into a partnership that encompasses 200,000 employees in more than 150 countries around the globe.
But size alone doesn't make a company great, of course. Things like satisfying clients, increasing opportunities for personnel, and performing a vital function for society make a company great. When employees, customers, investors, and the community benefit from a company's services, that's what makes it stand out from the rest.
Fortunately, Deloitte can put a tick mark next to each of these stakeholders. Here's why.
The case for Deloitte
To understand how Deloitte works, you need to be familiar with the world of accounting and business consulting. By and large, this world is dominated by what are known as the "Big Four" accounting firms, as listed below:
- Ernst & Young
- Pricewaterhouse Coopers
Collectively, these firms provide audit and tax services to virtually all of the Fortune 500 companies. They wield considerable pricing power relative to their smaller peers and benefit from long-term relationships with clients that provide a stream of recurring revenue.
Further, they are not strictly "number crunchers " in today's world. In fact, Deloitte offers a wide range of additional services that revolve around strategy, technology, and human capital. In 2013, these services accounted for nearly half of its overall revenue.
Regardless of the type, services are what Deloitte ultimately sells to clients, which has significant implications for how the firm is run. Deloitte recognizes that employees are truly its most valuable assets, and it treats them as such. Here are just a few reasons why employees love Deloitte:
- Vacation time is substantial: Former employees attest to starting with approximately 23-25 days of paid time off plus 10 paid holidays per year.
- Deloitte offers two sabbatical programs: one unpaid and one volunteer-oriented option where employees receive 40% of salary.
- Deloitte constructed a 100-acre training center known as "Deloitte University" and has introduced a novel "gamification" approach to better engage employees.
Beyond the formalized benefits, employee reviews on Glassdoor show that Deloitte emphasizes a "collegial" and "fun" corporate culture, provides the flexibility to work from home, and encourages participation in volunteer and recruiting activities. They also happen to pay well, too. According to employee feedback, the average new hire associates or analysts earns an average annual salary of roughly $60,000 plus health benefits.
All of this translates into a satisfied workforce. On Glassdoor, the company receives an overall rating of 3.6 out of 5 stars based on nearly 6,500 reviews. What's more, 77% of employees would recommend the company to a friend and 90% approve of the performance of Deloitte's CEO Barry Salzberg. Even when employees leave the firm, Deloitte stays engaged through one of the best alumni programs in the business.
From the perspective of customers, Deloitte's come to represent much more than a "bean counter." Its professionals simplify financial reporting, disentangle the tax code, and help companies manage their resources more effectively. Although most client-satisfaction surveys are kept confidential, a report by Big4.com shows that customers continue to value the services provided by the Big Four: Revenue growth across every service line has increased in all but two years since 2005.
Because Deloitte is structured as a partnership, its "investors" are different from a public corporation. Deloitte's owners are partners that have typically worked at the firm for at least a decade. Their personal compensation increases and decreases along with Deloitte's profits. This upside potential and downside risk is a rare but positive thing in today's corporate world, where management's interests are often misaligned.
In the areas of philanthropy and social causes, Deloitte has a long history of leading corporate America. The Deloitte Foundation was established 80 years ago and has donated $50 million to colleges and universities according to the company. Meanwhile, Deloitte conducted its 15th "IMPACT Day" in 2014, an annual event where 60,000 professionals give a day of service by volunteering in their communities. Finally, Deloitte walks the walk when it comes to diversifying its workforce: DiversityInc ranked Deloitte No. 11 in its list of 50 top companies for diversity.
Taking an even broader step back, it's important to realize the role that Deloitte's audit practice plays in the financial markets. Big Four firms are the "scorekeepers" of the corporate world. The general public relies on their reports when it invests in a wide variety of stocks and bonds. In this context, Deloitte performs a critical task for the markets and society at-large.
Some complaints to consider
The number one drawback of working at Deloitte, which is described in Glassdoor reviews, is the long work hours required of employees. During busy season, audit and tax workers often log anywhere from 60 to 80 hours per week. In this category, however, Deloitte is no exception: Professionals at all Big Four firms and many of the smaller competitors frequently burn the midnight oil.
Another concern involves potential conflicts of interest. As audit and tax revenue growth moderates, Deloitte is leaning into consulting services to bolster sales. In 2012, Deloitte's consulting practice grew 17.4% versus the 5.7% growth rate of its audit business.
The problem here is that providing consulting services can raise questions about the independence of accountants. Since independent, reliable audit reports are crucial for our financial markets to function, Big Four firms need to be careful not to overstep the boundaries when it comes to actual or perceived conflicts of interest.
The bottom line
Truth be told, this is not your grandfather's accounting firm. Deloitte is constantly looking for ways to commend and inspire its employees: "Applause" awards and "IMPACT Day" are just two prominent examples. Deloitte's many Fortune 500 clients admire this outside of the box thinking, even in the world of finance and accounting.
Deloitte should aim to improve employees' work-life balance going forward. What's good for its employees will be good for clients at the end of the day. Taken as a whole, however, it should come as no surprise that Deloitte is one of America's best companies.
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