In partnership with Glassdoor, our investment analysts are taking a closer look at some of the most popular companies in Glassdoor's career community.
Accenture (NYSE:ACN) is a worldwide consulting, technology services, and outsourcing company. Its name is an abbreviation of the phrase, "accent on the future," a good fit for a company that refuses to look in the rearview mirror.
In 2001, Accenture pre-emptively (and fortuitously) cut ties with accounting firm Arthur Andersen before that firm's reputation was tarnished. Then it set out to create its own unique identity by hiring Tiger Woods to serve as the face of the company, only to cut the cord on that relationship when Woods' reputation took a nosedive as well.
Impressively, Accenture's brand in the business world remains rock-solid, as evidenced by the following statistic: It can claim 75% of the FORTUNE Global 500 companies as clients. Here's an in-depth look at what makes this consulting company great today.
The case for Accenture
In less than 15 years, Accenture has become a sought-after name in the corporate world. It's grown to nearly 300,000 employees who provide professional services like strategy consulting or IT support to other (mostly large) businesses.
Its biggest clients often want a little of everything, and they tend to develop long-term relationships that evolve over time. As of 2013, 91 of Accenture's 100 largest clients have worked with the company for at least 10 years.
All told, Accenture balances the mix between high- and low-profit services quite well, maintaining its reputable brand and holding onto those lucrative contracts that generate recurring revenue. This has translated into impressive stock market returns for shareholders: Shares of Accenture delivered average annual returns of 13.3% over the past decade, outpacing the S&P 500's return of 9.05%.
Consulting firms like Accenture do not require many assets to run their businesses. For the most part, they invest in their workforce of consultants and support personnel. This is an aspect of Accenture that gets recognized frequently in the business press and recruiting world. Here are some of its most recent achievements:
- Six straight years on FORTUNE's 100 Best Companies to Work For list
- A #12 ranking on DiversityInc's Top 50 Companies for Diversity list
- Seven consecutive years recognized among Ethisphere's World's Most Ethical Companies
To assess whether Accenture truly stands out as an employer, however, it's worthwhile to understand how employees view the company. On Glassdoor, Accenture's current and past employees give it a rating of 3.6 out of 5, which equates to a "Satisfied" overall review from a relatively large sample of 8,374 ratings. Further, 79% of employees say they would recommend Accenture to a friend, while an overwhelming 91% say they approve of the work done by CEO Pierre Nanterme.
On the whole, the pluses of working at Accenture -- which include compensation and benefits that employees estimate are 3.9% above average -- seem to outweigh the minuses -- which include a suboptimal work-life balance. And, regarding the latter, the issue of overworked employees is a recurring theme in the world of consulting, not one that's solely specific to Accenture.
From the perspective of customers, Accenture offers something that many of its competitors cannot. Because of its roots in "Big Four" accounting, it retained many of the best qualities of those firms, including a highly qualified workforce, international expertise, and a structure similar to a partnership that emphasizes long-term career development. On the flip side, it doesn't have the conflict of interest issues that limit the Big Four, all of which continue to perform independent audits while selling "consulting-like" services on the side. Further, Accenture has distinguished itself from IBM and Xerox since it has much deeper roots in consulting, instead of being a hardware giant-turned-services provider.
Despite its relatively short history, Accenture's brand value has steadily outpaced its peers according to Interbrand over the last decade. Satisfied clients -- especially those with their own recognizable brands -- are the driving force behind that trend.
As mentioned before, long-term investors have seen significant gains in their shares of Accenture over the last decade. From a financial perspective, Accenture has done well for these stakeholders. Further, Accenture is forward thinking in terms of transparency. One of the best corporate governance evaluation tools, GMI Ratings, ranked Accenture No. 12 among America's Most Trustworthy Large Cap Companies in 2014.
In the areas of philanthropy and social causes, Accenture is well known for its dedication to the "Skills to Succeed" program, which helps equip individuals all over the world with baseline skills for the workforce, or for their own business endeavors. This effort aligns well with Accenture's expertise, and thus it works on multiple levels: It engages employees through pro bono work, supports partnerships with nonprofits, and provides financial assistance.
Taking an even broader step back, Accenture plays a key role in helping large organizations make changes to be more competitive and adaptive. It also finds ways to streamline processes or functions that might be outside of a client's wheelhouse, per se, allowing the client to focus on what matters most to their customers.
Some complaints to consider
As shown in Glassdoor reviews, employees cite an undesirable "work life balance" and "long hours" as the most prominent complaints. This is a pattern observed across the consulting industry that can lead to high turnover, especially in entry-level positions.
Another ding against Accenture -- particularly in the media -- is that it stands as one of the most prominent examples of American "tax inversion" from this century. Inversion is where companies incorporate in an overseas country and thereby avoid paying the relatively high U.S. corporate income tax rate. Accenture, which has roots dating back to Andersen Consulting in Chicago, was incorporated in Bermuda in 2001 before relocating to Dublin, Ireland in 2009, when the U.S. government cracked down on "tax havens."
For perspective, 47% of Accenture's revenue came from the Americas in the third-quarter of 2014, but the company did not disclose the portion that came solely from the U.S.
The bottom line
Accenture stands out because of the attention it gives to all of its stakeholders, including employees, customers, investors, and the broader society it serves. Because of this, it's been commended repeatedly as an ethical organization, a supportive employer, and a transparent public company. It could do better by its workforce -- and perhaps its clients, too, in the long run -- if it focused on improving the work-life balance of consultants. This could ultimately reduce turnover within the company.
All things considered, however, Accenture's holistic approach to stakeholder satisfaction has made it one of America's best companies.
Isaac Pino, CPA, has no position in any stocks mentioned. The Motley Fool recommends Accenture. The Motley Fool owns shares of International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.