Firm goes from biggest per cent cut in its sector to only one to make all salaries whole
Consulting giant Deloitte will repay the equivalent of two-and-a-half months of pandemic-related employee pay cuts after posting better-than-expected results in the first half of its 2021 fiscal year, according to The Australian Financial Review.
The decision comes after the firm announced 10 extra days of COVID-19 leave for its employees, meaning staff at the big four firm will be completely compensated for the COVID-related pay cut, and receive four days of extra leave in addition to that. The move also means that Deloitte has gone from being the big four firm that cut staff pay by the highest percentage at the outset of the pandemic to being the only big four firm to repay the entire amount, according to AFR.
The big four firms – along with many other companies – temporarily cut pay at the outset of the pandemic. The firms told staff that the move was intended to preserve jobs, but the cuts also offset the reduction in partner profits caused by the recession, AFR reported.
Deloitte CEO Richard Deutsch told employees about the repayment Wednesday in a pre-recorded message.
“Our half-year results are strong and we are optimistic about 2021,” Deutsch said. “I am so proud of the hard work, dedication and focus of our people to help clients navigate through the crisis. Our continued better-than-planned performance is a testament to our market-leading skills and capabilities.
“We promised our people that we would continuously review our performance and recognise their hard work and contribution. It is to that end that we can announce that we will return a payment equal to six weeks of forgone pay to our staff who accepted the pay variation proposal.”
Deloitte originally announced a 20% pay cut for five months, which was reduced to four months in September. The repayment further reduces this to a 20% cut for 1.5 months – equivalent to about six days of unpaid work, AFR said. Combined with the extra 10 days of pandemic leave, staff will be repaid the entire six days of cuts and have four extra days of leave.
Deloitte’s announcement leaves KPMG as the only big four firm that has cut pay amid the pandemic without cutting hours, AFR said. PwC and Ernst & Young cut staff pay and hours together.
Deloitte’s pay cut applied only to employees earning more than $65,000 per year and came with an extra 10 days of annual leave. The company said the cut was necessary to minimise redundancies, prompting staff protests when more than 700 positions were made redundant in June, AFR reported.
