EY pushes back graduate start date as deals market slows
Approximately 200 graduate hires for EY's strategy arm, EY-Parthenon, in the US will see their start dates pushed back to mid-2024
Approximately 200 graduate hires for EY's strategy arm, EY-Parthenon, in the US will see their start dates pushed back to mid-2024
In a move reflecting the ongoing challenges in the consulting and advisory sectors, Big Four accounting firm Ernst & Young (EY) has announced delays in start dates for its new graduate recruits. This decision comes as the company grapples with a slowdown in business activity, particularly in mergers and acquisitions (M&A) and private equity.
According to reports in the Financial Times, EY-Parthenon leaders cited a disappointing market for M&A and private equity activity as the primary reason for sluggish advisory revenue growth since the start of the firm’s fiscal year in July. This slowdown is part of a broader trend affecting the consulting industry, which has seen a sharp drop in demand following the boom during the COVID-19 pandemic.
The global M&A market has been particularly affected, with deal numbers falling to a nine-year low in the first three quarters of 2024. However, some large deals among multinationals have recently emerged, potentially signaling a rebound in overall activity.
This marks the second year running that EY has delayed start dates for new hires, having previously pushed back start dates for its 2023 recruits. The firm stated that the decision was made “after careful consideration of the current M&A environment and our business needs” and aims to ensure that new joiners receive high-quality assignments for a successful start and strong professional trajectory.
EY’s decision reflects challenges faced by other major consulting firms. The Big Four — EY, PwC, KPMG, and Deloitte — along with specialist consultancies like McKinsey, continue to recruit graduates in large numbers, anticipating future growth. However, starting salaries have remained largely flat.
Fiona Czerniawska, chief executive of Source Global Research, noted that while the second half of 2024 has been less buoyant than hoped, many firms are seeing strong pipelines of future work, though it’s taking longer for this work to materialize.
Despite current challenges, consulting firm leaders remain optimistic about the year ahead. Paul Knopp, chief executive of KPMG US, expressed confidence in a strong economy in 2025, citing potential for increased activity in the private equity sector due to greater clarity around interest rates.
The situation at EY comes amid other challenges for consulting firms, including recommendations from the UK’s Institute for Government to reduce government dependence on management consultants. Additionally, competition is intensifying as non-Big Four firms report an increase in audit work across various market segments.
As the consulting industry navigates these challenges, firms like EY are carefully balancing their workforce to align with current market conditions while preparing for anticipated future growth.