Understanding Probation and Layoff Practices in the Big Four Accounting Firms

When considering a career with the Big Four accounting firms—Deloitte, PwC, EY, and KPMG—it is crucial to understand the probationary period and layoff practices. This article provides insights into these practices, particularly during economic downturns, and highlights the specific case of PwC. While the other firms may have similar work cultures, this article aims to give a comprehensive overview of the situation.

Probation Period and Layoff Practices at the Big Four

The probationary period for new hires at the Big Four accounting firms typically lasts around six months. During this period, employees are assessed on their performance, their fit within the company culture, and their ability to meet the expectations of their roles. This article discusses the processes involved, including performance assessments, feedback and support, and the impact of market conditions on these practices.

Performance Assessments

New hires at the Big Four firms are usually evaluated through regular performance reviews. If an employee does not meet performance expectations or fails to adapt to the firm's culture, they may be let go at the end of the probation period. These assessments are designed to ensure that the employee is a good fit for the role and the firm.

Feedback and Support

Firms often provide feedback and support during the probationary period. This may include mentorship, training, and performance improvement plans. The aim is to give new hires an opportunity to improve before any decision is made regarding their employment. However, this support is not guaranteed and the firm maintains the right to make its own decisions based on the overall performance.

Turnover Rates and Market Conditions

The Big Four firms can experience high turnover rates, and layoffs during the probation period are not uncommon, especially during economic downturns or restructuring phases. External market conditions can significantly influence hiring and layoff decisions. If the firm is facing financial challenges or a downturn in demand for services, they may be more likely to let go of recent hires.

What about Recent Developments?

It is important to note that no major layoffs have occurred at the Big Four firms, even during the challenging times of the pandemic. PwC, for example, supported its employees during the worst phases of the pandemic by compensating for mental wellbeing issues and providing additional credit and extra paid leaves for those affected.

While this article focuses on PwC, similar practices can be expected from the other Big Four firms. PwC had a three-month probation period until 2018, although it is unclear if this has since been extended to six months. Unlike most service-based companies, the Big Four firms do not hire in bulk. If they are hiring, the candidate is typically already mapped to a project requirement, whether ongoing or pipeline. In most cases, a new hire starts on a project full-time immediately after the induction program. However, in some cases, the requirement may be no longer present or another existing employee may have been assigned to the same role, leading the new hire to go on bench.

Special Case of New Hires

For new hires at PwC, getting into a project is the employee's responsibility. Unlike other companies, PwC does not have a centralized project allocation HR team. The new hire has to go from manager to manager, which can be challenging. The managers may exploit these new hires if the opportunity arises. However, if you are lucky, there may be a situation where the new hire can still secure a project quickly.

Conclusion

In conclusion, while layoffs during the probationary period can occur, they are generally based on performance and fit rather than simply being a new hire. Firms typically aim to support new employees to ensure their success but also need to maintain a high standard of performance across their teams. The recent developments at the Big Four firms show a supportive approach to employees during challenging times, which can provide reassurance to potential new hires.