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Ernst & Young is one of the world's largest professional services firms. It is the product of a series of mergers involving smaller accounting firms, with the very first dating all the way back to an 1849. But over the past 25 years, Ernst & Young has been creating a unique identity all its own.
A company like Ernst & Young is recognized as one of America's best because it serves all of its stakeholders well, including (but not limited to) employees, customers, investors, the business community, and the broader financial markets. Let's take a closer look at how Ernst & Young stands out from the rest of the pack.
The case for Ernst & Young
To understand how Ernst & Young works, you need to be familiar with the world of accounting and business advisory services. By and large, this world is dominated by what are known as the "Big Four" accounting firms, as listed below:
- Ernst & Young
- Pricewaterhouse Coopers
The Big Four are like the "Ivy League" of the accounting field. Collectively, they provide audit and tax services to virtually all of the Fortune 500 companies. They wield impressive pricing power relative to their smaller peers and develop longstanding relationships that generate recurring revenue.
No matter the type, services are what Ernst & Young sells to clients, and clients trust that Ernst & Young's employees are high-caliber individuals. They are, in reality, Ernst & Young's most valuable assets. As a result, Ernst & Young strives to support and develop its talented workforce as much as possible. Here are just a few examples of the perks of working at Ernst & Young: To be sure, these are not strictly accounting organizations. Firms like Ernst & Young also offer consulting services in the areas of risk, litigation, and mergers, which combined to account for 31% of overall revenue in 2013.
- Employees receive a minimum of 15 days of vacation plus 10 holidays per year, and some attest to five weeks of paid time off on Glassdoor.
- Ernst & Young offers considerable support for working families, including low-cost back-up child care, six weeks of parental leave, and flexible work arrangements like telecommuting.
- Training and development are emphasized through a career advisor mentoring program, nearly two weeks of training per year with access to 16,000 different courses, and international placement opportunities.
Beyond the formalized benefits, employees point out that Ernst & Young encourages new hires to grow quickly in their roles, supports ongoing learning and certification, and instills a team-oriented culture. The company also happens to pay well, too, with newly hired associates or analysts receiving an average annual salary of roughly $60,000 plus health benefits, according to employee feedback.
When you crunch the numbers, these efforts add up quickly. On Glassdoor, for instance, the company receives an overall rating of 3.7 out of 5 stars based on nearly 4,400 employee reviews. At the same time, 80% of employees would recommend the company to a friend and 92% approve of the performance of Ernst & Young's CEO Mark Weinberger.
From the perspective of the customers, Ernst & Young scores high marks as well. Its professionals help companies understand regulations and risks, manage talent, and improve operations. Although most client-satisfaction surveys are kept confidential, a report by Big4.com (link opens a PDF) shows that customers continue to value the work performed by the Big Four: Revenue growth across every service line has increased in all but two years since 2005.
Because Ernst & Young is structured as a partnership, its "investors" are different from a public corporation. Ernst & Young is owned by its partners (typically long-term employees) and their personal compensation increases and decreases proportionately with Ernst & Young'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.
When it comes to social causes, Ernst & Young is a shining example of a philanthropy-focused company. On one hand, it's helping America's underserved high school students advance to college through a program known as College MAP (link opens a PDF). On the other, Ernst & Young is sending employees to Latin American countries to assist in environmental research and help local entrepreneurs through its Earthwatch Global Ambassadors program. Finally, in terms of promoting diversity, Ernst & Young's an overachiever as illustrated by its No. 3 ranking in DiversityInc's 50 top companies for diversity.
In a sense, accounting firms are the "scorekeepers" of the corporate world. The general public relies on their audit reports when it invests in a wide variety of stocks and bonds. In this wider context, Ernst & Young performs an absolutely vital role for the financial markets and society at-large.
Some complaints to consider
As described on Glassdoor, the long work hours required in this profession can be taxing (no pun intended). During busy seasons, audit and tax workers often log anywhere from 60 to 80 hours per week. This is the norm at most public accounting firms, however, and not solely specific to Ernst & Young.
There is growing concern about "scope creep" in terms of what services accounting firms should provide. Should Ernst & Young, for example, offer consulting services? Or does this pose a distraction and potential conflict of interest?
For now, consulting is on the upswing at the Big Four firms. At Ernst & Young, these services grew 13% versus the 3.4% growth rate of its audit business in 2012. But Big Four firms need to be careful not to overstep the boundaries in this regard. The investing public relies upon independent audit reports, and actual or perceived conflicts of interest erode their trust.
The bottom line
It should come as no surprise that Ernst & Young consistently finds itself near the top of the heap in "best of" lists. Ernst & Young's leadership emphasizes personal growth for its employees, reaches out to support communities, and goes the extra mile for clients. It's also evolved to become one of the most diverse companies in America.
In terms of employees' work-life balance, there's room for improvement. And Ernst & Young should strive to increase public transparency around the types of services it offers to its varying clients. On the whole, however, there's no shortage of reasons to commend this company as one of America's best.
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