PwC tells junior auditors to expect smaller pay rises

PwC has reportedly informed some 25,000 junior auditors to expect smaller pay rises and bonuses, if not freezes this year, because of “challenging” market conditions despite industry calls to catch up with inflation, according to the Financial Times.

Insiders at the firm told the FT that junior auditors were made aware on a webcast last week that the pay band for one cohort would be frozen, while others will see increases by 3% or 6%, which will result in real-terms pay cuts. 

This webcast was reportedly followed by a memo to employees in which the firm’s chief people officer Ian Elliott said pay rises would be smaller than last year. 

This comes as the UK’s inflation reached 8.7% in May. 

As a result of this announcement, many senior associates in PwC’s audit division might quit, as most of them are paid between £26k and £34k a year depending on location, an insider at the firm told the FT. 

However, this news from the firm is at odds with an appeal earlier this month by the chair of the UK audit regulator for firms to increase junior employees’ pay to combat concerns that the profession is unattractive to prospective recruits. 

It comes as average profits for PwC’s UK partners, who own and run the business, soared to a record £1m last year. 

A spokesperson from PwC told the Financial Times: “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.” 

The FT said it understands that UK consulting firms generally cut jobs less drastically and more slowly than in the US.