Sunday

Recession has affected almost all of the industries in India. Big 4 firms  despite their might have been having a tough time dealing with the recession.

One chain of thought argues that big 4 firms should, to some extent, be sheltered from the current crisis. Their type of client, the large private and public multinational company, will invariably have a legal requirement for an audit. This type of client is usually large enough to withstand economic downturns so audit fees from such companies should, in general, remain stable.

However, a large chunk of the revenue for the big 4 firms come from the non audit services such as risk advisory, transaction advisory etc. On one hand transaction advisory services are facing a major crisis since the number of transactions in the Indian markets have gone down significantly, on the other hand, other advisory services under the risk advisory/business advisory umbrella are not selling, since most of the client are postponing their decision to hire big 4’s or for that matter any consulting firm for such services. Many of these services are being considered a luxury  by prospective clients in these recessionary times.

PwC has been affected even further due to their alleged involvement in the Satyam scandal, many of the PwC clients are reportedly seeking services of other big 4 biggies, Deloitte and KPMG are speculated to have grabbed a number of PwC clients.

Most of the big 4 firms have frozen or deferred hiring and are adopting a “wait-and-watch” policy.

However, there is always an opportunity in adversity, from a human resource prospective, the recession provides big 4 firms an opportunity to build their brand equity and tackle high attrition problem by supporting their employees in these tough times and passing on the least amount of pain on them. Employee oriented moves during recessionary times could help big 4 firms to build their brand and attract quality talent in the long run.  However, how big 4 firms respond to the human resource aspect in this recession will only become clear in the coming months.

Most of the Big 4 firms have stepped up their business development activities and are aggressively pursing prospective clients. These may be classified as challenging times for the big 4 firms, but at the same time recession is forcing many big 4 employees to hone their existing skills and acquire new skills.

To summarize, there is unrest in the sea, and how will the big fish respond? This question will only be answered in time.

Views presented in this article are those of the author and author alone and in no way reflect the views of the author’s employer or any connected parties.

You can reach the author on mohit.kant@consultingnetwork.co.in or contactus@consultingnetwork.co.in

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