PwC has warned its 25,000 UK staff to expect smaller pay rises and bonuses this year as Big Four accounting and consulting giants face a slowdown.
The firm said that “challenging” market conditions meant workers should not be anticipating major pay bumps despite inflation remaining stubbornly high.
In a memo to staff, seen by The Telegraph, Ian Elliott, PwC’s chief people officer, said: “While there are many parts of our business experiencing strong growth and we are continuing to invest for the future, the market has been challenging.
“As a result, whilst we’ll still be investing in salary uplifts this year, these won’t be at the same level as last year’s exceptional record level adjustment to salaries.
“In terms of bonuses, this year’s bonus pool is an increase on last year, but our higher headcount across the firm means on average bonuses per head will be lower.”
The firm gave out record pay rises last year in an effort to retain staff amid a red hot labour market and soaring inflation.
This year, some staff are expected to experience real-term pay cuts, with the firm’s junior auditors told last week that the pay band for one cohort would be frozen while others would increase by 3pc or 6pc, the Financial Times reported.
In May, inflation stood at 8.7pc.
The move is, however, likely to come as a relief to the Bank of England, after Andrew Bailey, the Bank’s Governor, last week blamed “unsustainable” pay rises for stoking inflation.
Rishi Sunak has also said he is prepared to make decisions which “people may not like” on public sector pay as he insisted that there was no alternative to clamping down on rising prices.
Last year, PwC handed its partners a record seven-figure payout. Average partner pay for 2022 came in at £920,000, up 15pc on the previous 12 months. The firm’s 950 top executive tier also shared a windfall of around £100,000 each following the sale of its global mobility services business, taking their average annual payout above £1m for the first time.
At the time, Kevin Ellis, PwC’s senior partner, said that pay increases would likely be lower in 2023 after half of the firm’s staff were given a 9pc raise last year.
A spokesman for PwC said: “Fair reward, career progression and professional development are core to our business. Following record pay increases last year, we have again invested in salary uplifts across our business.
“Our decisions are informed by the firm’s performance, external market conditions and the investments we make in response to client demand, such as our recent commitment to honouring all graduate roles for the year ahead.”
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