London, 1 November 2022 - EY has announced record levels of growth for its UK business, with UK revenues up 17.2% and UK fee income increasing to £3.23bn from £2.75bn over the last financial year.
As Partners prepare to vote on whether to separate into two businesses – a global partnership and a new corporate - EY says that it is well-positioned to approach this industry defining move, with a strong UK business driven by long-term investments in its people, technology, sustainability and audit quality.
EY achieved revenue growth across all of its service lines in the UK. Consulting grew by 33%, followed by Tax, Assurance and Strategy and Transactions which generated growth of 15%, 11%, and 10% respectively. EY has also seen strong demand across all its industry sectors with stand-out performances from Consumer Products (26.4% growth), Private Equity (26.1%), Energy (21.3%) and Financial Services (13.6%).
Hywel Ball, EY UK Chair comments: “This has been a record year of growth in the UK, driven by the long-term investments we’ve made in our business and strong client demand. The decisions we’ve made in recent years, whether that’s continuing to recruit during the pandemic, expanding the Partnership, or the significant financial investments we’ve made in acquisitions and new technologies, have underpinned the extraordinary growth we’ve seen this financial year. These results also demonstrate the strength and resilience that we will continue to bring to navigating the current turbulent economic environment successfully.
“With companies facing a convergence of challenges, from climate change and the pandemic to economic uncertainty and shifting consumer habits, we’re investing in the talent, skills and services needed to help our clients transform, grow and build trust with their stakeholders.
“Over the last financial year alone we’ve recruited over 5,500 people across all parts of our business, with 37% of roles based outside of London, and appointed 120 new equity Partners. We’ve expanded our range of services in areas including technology consultancy and sustainability through acquisitions and the launch of EY Carbon. Plus, we’ve invested over $1bn globally in audit quality, supported by a refreshed investment strategy here in the UK.
“Our legacy as a single organisation has been exceptional and we’re in a strong period of growth for our business. I’m proud that, against this backdrop, we are taking the opportunity to review the shape of our business in the UK and globally to ensure we’re well positioned to build on this success into the future.”
Investing in People
EY hired over 5,500 people in the UK over the last financial year, with 37% of roles based outside of London. EY also welcomed a record intake of 1,269 graduates and 204 apprentices, which was up 35% on the previous year. As part of a commitment to social equity and targeted steps to close the recruitment gap by attracting talent from low-income backgrounds, around 13% of EY’s graduate and apprenticeship hires previously received free school meals.
The firm has also continued to expand its UK partnership with the internal promotion of 75 equity Partners and 45 external hires – its largest-ever cohort of equity Partners in the UK. The appointments reflect the firm’s increased investment in its sectors, service lines and regional business, including in areas such as Audit, Technology Consulting, EY-Parthenon, Financial Services, Sustainability, Energy and Consumer Products.
In addition, strong client demand has led to EY elevating the Associate Partner role title to Partner in the UK, recognising their expertise, client delivery and leadership. This change will create career opportunities for EY’s people and attract talent with the skills needed to win in an evolving market - particularly in fast-growing areas such as sustainability and technology. Combined, these appointments bring EY’s total UK Partner number to 1,534.
EY has also increased its investment into salaries and its variable pay bonus scheme as it continues to focus on recruiting and retaining the best talent to support EY’s future growth, sharing the firm’s wealth creation with all its people. EY is investing over £106m in salary increases for UK employees this year and has also increased the bonus pot by 55% to £110m in FY22. These investments reflect a strong business performance over the last financial year and recognise the impact of rising living costs and overall market conditions. EY has also increased starting salaries for its graduate, industrial placement and school leaver programmes by an average of 13%, 23% and 11% respectively.
The firm has enhanced its range of employee benefits this year, including private medical healthcare cover which has now been extended to all EY people in the UK. From 1 January 2023, EY employees will also be able to spend up to £500 (as taxable benefit) per year on a broad range of products or services that support their physical, mental, social or financial wellbeing - from fitness equipment and gym memberships to family days out and dental appointments.
In 2022, EY also delivered almost 700,000 hours of formal learning for UK people, equivalent to 40 hours per person.
Commitment to diversity, equity and inclusion
Diversity, equity and inclusion continue to be significant focus areas for EY. EY has ambitious UK targets around Gender, Ethnicity and Black representation and continues to invest in a range of targeted initiatives to support its goals. As of 1 July 2022, 27% of EY Partners in the UK were women and 15% were from ethnic minorities of which 18 Partners identify as Black or Mixed-Black. EY’s new student hires this year comprised of 41% women and 45% from ethnic minority backgrounds, of which 4% identify as Black or Mixed-Black heritage.
Earlier this year, EY launched its first Neuro-Diverse Centre of Excellence (NCoE) in the UK in Manchester. The centre is designed to fuel innovation in technology, bring a new dimension of creativity, and drive greater diversity and inclusion in the UK workplace. Recognising the value of thinking differently, EY already adapts its recruitment processes and working environment to support the talents of neurodivergent individuals. The NCoE goes a step further by accessing the largely untapped talents of people with neuro-cognitive differences and those that self-identify as requiring additional support to help them to apply their strengths and meet clients’ business needs in emerging technologies, such as: artificial intelligence, data science, automation, blockchain and cyber. EY plans to grow the UK NCoE’s and is expanding to further locations across the UK, including Glasgow this year.
EY has also committed to creating more inclusive workplaces by creating the CEO Action for Black Equality initiative, a CEO-driven business commitment to drive measurable action and meaningful change in advancing diversity, equity, and inclusiveness in the workplace. In addition, EY has also become one of the founding partners of the socio-economic diversity taskforce, Progress Together. The new, independent body will focus on boosting socio-economic diversity in UK financial and professional services.
Expanding EY’s services, skills and capabilities
EY has made a number of strategic acquisitions to further expand the range of services and skills the firm can provide to clients and to support EY’s growth strategy in the UK & Ireland.
The acquisitions of Digital Detox Venture Limited, Blackdot, PeakEPM Limited, Seaton Partners Limited and Lane4 will further strengthen EY’s technology capabilities in the UK, adding technical and specialist skills and over 200 people. They also follow the acquisitions of CMA Strategy Consulting and Frank Hirth Plc in FY21, with EY making more acquisitions over the last two years than it has over the last decade.
In April, EY announced that it planned to double the size of its UK and Ireland Consulting practice in the next four years, backed by £75m of investment. This is in addition to the £95m that the firm has already invested in its Consulting practice since 2020.
EY also continues to invest in building its sustainability services, solutions, and people capabilities and advising governments and regulators worldwide on ESG standards and the transition to a green future. In February, EY announced the launch of a new sustainability service – EY Carbon – to support listed businesses and financial institutions to meet a new requirement to publish their net zero plans by 2023. EY Carbon is backed by over £100m of investment in the UK with an ambition to recruit more than 1,300 professionals over the next three years. The team has also recently launched the EY Sustainability Transformation Hub - a net zero transformation progress tracker, powered by Microsoft within EY’s Tech hub, designed to help businesses plan, measure, and execute on their transition to net zero.
Investing in audit quality
Delivering sustainable, consistent high-quality audits is a priority for EY and the firm continues to make significant investments. EY was disappointed that this year’s FRC inspection results were out of line with its improved performance in recent years and is determined to do better and deliver the high-quality audits expected by its stakeholders.
Earlier this year, EY announced an additional $1bn investment globally in its audit technology and processes. The firm has also launched a refreshed Audit Quality Strategy in the UK, which emphasises the importance of a strong audit culture and professional scepticism.
In FY22, EY recruited more than 1,232 experienced auditors, graduates and apprentices into its UK audit teams. EY now audits 24 of the FTSE 100 and 73 of the FTSE 350, as well as a large number of private businesses and public sector bodies. In FY22 EY won a number of large audit tenders including BNP Paribas, Aviva and Aegon.
Commitment to environmental sustainability
As well as supporting clients to reduce their environmental impact, EY is also taking action in its own business. Last year, the firm announced that it had achieved its goal of becoming carbon negative in its UK operations and globally and is on track to meeting its pledge to become net zero in 2025.
This year, EY achieved a 24% reduction in energy consumption across its UK offices, compared to FY19. 100% of the firm’s UK’s energy consumption is now backed by renewable electricity / biogas certification.
To accelerate its progress on carbon reduction, diversity, and social mobility, EY has also secured an Environmental, Social and Governance linked Revolving Credit Facility. The new facility was the first of its kind in the UK to be secured by a member of the Big Four accountancy firms and is linked to three ESG targets. EY’s performance against these metrics will be verified annually by external auditors and will determine the interest rate applicable under the RCF – which can go both up or down.
EY, in association with Hult International Business School, has created a full accredited Masters in Sustainability, which is open to all of its people globally, free of charge. The master’s degree provides EY people with an opportunity to develop their knowledge and skills across multiple facets of sustainability, including inclusive business and climate change.
The firm has also expanded its internal Eco-Innovators network, led out of the UK, to over 2,900 people globally. The network is run by volunteers who use their creative thinking and technology to help drive change within EY and to help support clients to transition to low-carbon, sustainable organisations. Their work was recently recognised in the edie Sustainability Leaders Awards as part of the Employee Engagement and Behaviour Change Initiative of the Year category.
Supporting our communities
Over the last financial year, EY Ripples – the firm’s corporate responsibility programme – has contributed to a range of projects that positively impacted around 2.7m lives, with EY people taking part in 4,405 volunteering opportunities. As well as community projects, the programme supports the next generation workforce by promoting social mobility.
The EY Foundation – EY’s independent charity – supported a further 2,200 young people (all of whom qualified for free school meals) and over 40 social enterprises through its skills and work experience programmes. The EY Foundation works directly with young people from low-income backgrounds, employers and social entrepreneurs to create or support pathways into education, employment or enterprise.
Strategic review – looking ahead
In September, EY announced that the strategic review of its businesses has progressed, and that EY leaders have reached the decision to move forward with partner votes about whether to separate into two organisations. One would be a global network of multidisciplinary member firms committed to assurance, tax and advisory services with all the capabilities required to deliver high-quality audits, serve the public interest and focus on the CFO agenda and sustainability; and the other would be a new global corporate comprising Consulting, Strategy and Transactions, the majority of Tax, and managed services.
The creation of two strong, independent businesses would help EY to better meet the needs of clients; create compelling careers for EY people; and serve the public interest by providing greater choice in the market and a global response to regulatory concerns.
Concluding, Hywel Ball said: “The strategic rationale for our separation into two leading businesses is compelling. The environment we operate in is changing rapidly and it’s important that we continue to adapt to ensure that we maintain our strong sustainable growth and meet the needs of all our stakeholders.
“The long-term investments we’ve made in our business means that we are well positioned to take on a project of such complexity, whilst also navigating the current period of economic uncertainty facing the UK as a whole.
“We remain focussed on delivering value and quality for our clients, whilst building a successful legacy for future generations.”
- UK revenues grew by 17.2% for the financial year ended 1 July, while UK fee income grew to £3.23bn from £2.75bn the previous year.
- Distributable profits before tax increased to £634m, up from £533m in FY21.
- EY is re-investing profits into the business rather than just Partner distributions. Average distributable profit per Partner has increased 7% to £803,000 from £749,000 in FY21.
- EY is investing over £106m in salary increases for UK employees this year and has also increased the bonus pot by 55% to £110m in FY22.
- Total UK tax contribution for 2022 is more than £1.14bn.
- The firm has achieved revenue growth across all four service lines with the strongest being Consulting at 33%. This was followed by Taxation, Assurance and Strategy and Transactions which generated growth of 15%, 11%, and 10% respectively.
- Performance of EY’s largest sectors: Consumer products 26.4% growth; Private Equity 26.1%; Energy 21.3%; Financial Services 13.6%; Government and Infrastructure 12%.
- Hired over 5,500 people in FY22, with 37% of roles based outside of London.
- Recruited an additional 1269 graduates and 204 school leavers with almost 40% based in regional offices.
- Appointed 120 new UK equity Partners – EY’s largest ever cohort of equity partners in the UK.
- As of 1 July 2022, 27% of UK Partners were women and 15% were from ethnic minorities, of which 18 Partners identify as Black or Mixed-Black.
- Delivered almost 700,000 hours of formal learning for UK people.
- Achieved 24% reduction in energy consumption across UK offices, compared to FY19.
- Positively impacted over 2.7m lives through the EY Ripples corporate responsibility programme, with EY people taking part in 4,405 volunteering opportunities.
- The EY Foundation, EY’s independent charity, supported a further 2,200 young people through its programmes.