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Counting on Engagement at Ernst & Young

By Ed Frauenheim

Dec. 2, 2009

This recession, professional services firm Ernst & Young has tried to preserve its reputation as a best-place-to-work employer. And employees, it seems, have returned the favor.


As of mid-October, the audit and consulting company had not finished compiling the results of a formal employee engagement survey. But anecdotal evidence suggests that the firm is on the right track with its 144,000 workers, says Kevin Kelly, Ernst & Young’s director of the people team for the Americas.


“People are actually feeling more engaged,” Kelly says. “People feel more loyal.”


Business results indicate Ernst & Young is holding its own in tough times. For the year ended June 30, the London-based company reported worldwide revenue of $21.4 billion, a drop of 6.8 percent year over year in U.S. dollar terms. One of its Big Four accounting firm rivals, PricewaterhouseCoopers, posted global revenue for the same period of $26.2 billion, down 7.1 percent in U.S. dollar terms.


Another global competitor, Deloitte, reported a 4.9 percent drop in U.S. dollar revenue for the year ended in May. Engagement has become central for companies eager to rebound from the recession and deter defections once hiring picks up. Some experts argue that a more engaged workforce requires revamping the arm’s-length, layoff-prone relationship many firms have had with employees for decades.


Ernst & Young, though, has bucked the trend of mere transactional ties with workers. The firm has prioritized workplace flexibility, sought out employee views and stood out for strong training investments. It has made Fortune’s “100 Best Companies to Work For” list 11 years running. And it ranked fifth in a list of the world’s most attractive employers for business students published in October by employer branding specialist Universum.


The recession, however, has tested Ernst & Young’s reputation as an employer of choice. The firm gave out pink slips during the past year, sparking criticism. Industry tabloid Going Concern reported that “it sounds like it has been a bloodbath at E&Y,” and an anonymous posting at an online message board accused the firm of treating people as “disposable items.”


Ernst & Young declined to say what percentage of the workforce was cut, but it called the reductions “targeted” and defended its employee separation process.


“Every separation requires a written business case and a team of business unit leaders and HR professionals review each individual situation,” the company said in a statement.


The firm also has sought to retain its employee-friendly culture. For example, Kelly says the company “didn’t back off at all on learning and development” investments, which are slated to total $450 million for the year ended June 2010.


One program Ernst & Young has maintained is Milestone Week, an annual gathering of some 1,200 leaders to train and recognize newly promoted managers and executives. Greg Chapman, senior manager in Ernst & Young’s transaction advisory services group, attended the four-day event in Orlando, Florida, last fall. Chapman had expected Milestone Week to be canceled amid the panic gripping the economy.


“Everyone down there was pretty blown away by what the firm did for us, given the environment,” he says.

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Ed Frauenheim is a former Associate Editorial Director at Human Capital Media and currently works as Senior Director of Content at Great Place to Work. He is a co-author of A Great Place to Work For All.

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