Yahoo Finance ‘What do you actually do?’: Redditors scratch heads at consulting firms
KPMG. Deloitte. PwC. EY.
Those working in the professional services sector know these names and acronyms refer to Australia’s most prestigious consulting companies, and some of the most highly coveted employers where business and commerce university graduates are concerned.
But for ordinary Australians, the work of these firms is shrouded in mystery.
“I’ve always wondered this,” one user asked recently in the /r/AusFinance Reddit forum. “Particularly for those working at the big 4 … what kind of consulting work do you do?”
“I struggle to see what these large organisations would need to bring in highly paid consultants for. Shouldn’t they have the expertise internally?”
The Redditor asked others to share examples of work they had been a part of.
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Subsequent comments ranged from earnest replies about the work they did, to poking fun at corporate jargon.
“Let me circle the wagon and loop back with you on that deliverable,” one user stated in a reply that has since been voted the top comment. The user said they were a former consultant at a big four firm in the areas of “people/performance, human capital” and “strategy/operations”.
Another said they were not an employee of a big four consulting firm themselves, but had “worked with quite a few in my time”.
“Spreadsheets and PowerPoint presentations. Some even write reports.”
One Redditor with a more earnest answer categorised the work into three key categories: ‘capability’, ‘capacity’ and ‘confirmation’.
It’s definitely not the first and last time people have taken to social media to voice their confusion about what exactly consulting firms do.
So what DO Big Four consulting firms do?
The confusion is understandable.
The ‘about us’ pages of PwC and KPMG’s websites, for instance, describe the work they do in rather general, broad terms.
“PwC is a powerful multiplier of connections and innovation. It’s what we do best: connecting people, businesses, technology and ideas to solve important problems,” the company states.
It also said it delivered “audit, assurance, consulting and tax” services to more than 5,000 clients.
KPMG Australia describes itself as, “a global network of professional services firms providing Audit, Tax and Advisory services”.
“In Australia, KPMG has a long tradition of professionalism and integrity, combined with our dynamic approach to advising clients in a digital-driven world.”
Australia’s largest consulting giants in question first started out as primarily accounting firms, but have grown to deliver much more than that.
Broadly, consulting firms work with clients to help them solve business problems. This might relate to any and every aspect of the business; from finance to HR to IT to cybersecurity, and may help clients identify areas where they can cut costs and make savings.
There are consultants for businesses in every industry, spanning banking and financial services, agriculture, media, the Defence sector, and everything in between.
Australian taxpayers paid consulting firms over $1 billion in 2020
It’s certainly not just companies in the private sector who call upon the services of consulting firms. Contracts with government departments and agencies often deliver hefty paydays for these giants.
The Federal Government splashed more than $1 billion of taxpayer money on what’s considered the world’s seven biggest consulting firms (the big four as well as McKinsey, Boston Consulting and Accenture) in 2020 alone, according to Consultancy.com.au.
The Government increased their spend on every single one of the big four firms by 20 per cent or more, bar PwC, where spending grew by 1 per cent. (But don’t feel too sorry for them – the Government still spent $190 million on them last year.)
Services Australia – in charge of Centrelink – awarded KPMG a $6.2 million contract to provide “business advisory services”, the AFR reported.
Independent think tank Australia Institute has pushed for greater transparency of the advice and reports provided by these consultancies and commissioned by the Government.
“Governments frequently call upon research and advice from consultancies to justify their decisions. However, this research and advice is rarely made public,” wrote Australia Institute Democracy & Accountability Program senior researcher Bill Browne in a recent discussion paper.
He pointed to the recent Australia Post scandal, where the Federal Government refused to release a report into the parcel delivery service on the grounds of “Cabinet confidentiality”, but was critical to former CEO Christine Holgate’s claims about how she was treated.
“Reports by consultancies are paid for by the public, influence government decision making and contain information that citizens should be informed of. They should be made public by default, and to the maximum extent possible,” Browne said.
“The Senate could issue a continuing order for the production of documents, covering all requests for tender/contracts for consultancy work and all reports and written advice provided by consultancies.”
Yahoo Finance has reached out to Deloitte, PwC, KPMG and EY for further comment.
PwC declined to comment.
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