Former Staff Cry Foul Over Deloitte Australia Tactics

Photo credit: iStockphoto/SIphotography

It is well understood in today’s business environment that companies with strong brands attract the best talent, hire talent easier and faster, and tend to perform better than other businesses.

In a period like the COVID-19 pandemic, this takes on a slightly different meaning. It is because so many businesses are shedding staff all around the world.

In this environment, outplacement becomes even more critical. How redundancies are handled now will have an impact on the business in the future.

For employees, the reality is that how people leave organizations disproportionately influences the way they view their time there.

What that last day felt like is usually more important than all the experiences over the previous year.

If that last day was poorly handled, with insensitive and inconsistent communication and a lack of care, then an employee’s view of the organization is soured forever.

This is bad for the organization because these negative views are likely to be shared, and the company’s brand suffers as a result.

Given this context, it has been surprising to watch the Australian controversy, which has unfolded over job losses at consulting firm Deloitte.

The evidence

Like many companies, Deloitte has had to make staff redundant during the current downturn. The company made 7% of its 10,000-strong workforce redundant in June because of the slump in work caused by the pandemic.

Deloitte certainly is not alone when it comes to redundancy. Professional services have been particularly hard hit in the crisis.

But Deloitte is now at the center of claims that it has actively prevented redundant staff from taking jobs with clients.

The story broke recently, with claims that clients — among them Australia’s Department of Defence and the Victorian Ports Corporation — had sought to hire some of the sacked consultants directly after their redundancies, but that Deloitte had blocked this on non-compete grounds.

The company has also been forced to defend its job advertisement strategy against allegations that more than 80 roles advertised on LinkedIn were for the same roles which had just been made redundant.

So, the claim is that Deloitte sacked staff, stopped them getting jobs with the clients at the same time as re-advertising the same jobs.

One senior data analyst, for example, was reportedly made redundant while working on a governance project for a private sector client, which was supposed to run until October.

This person was reportedly offered a job by the client. But this was allegedly vetoed by Deloitte, and the job offer was withdrawn.

The defense

Deloitte has come out swinging after the initial reports and claims instead that it has been trying to actively connect clients with former staff.

The company has also denied that the LinkedIn jobs it has advertised were for the same contracts.

In a staff-wide email, Deloitte Australia chief executive officer Richard Deutsch said he wants staff to “be confident in the way that we went about the redundancy process and the treatment of our people.”

“From the moment we made the necessary decision to make redundancies, we ensured we did it with empathy and care for our people — and it goes without saying, ethically,” the email reads.

“150 of the approximately 700 people whose roles were made redundant have found new roles, and over half of them have signed up for our alumni program. We have referred more than 25 clients to our outplacement provider to connect them to our ex-employees for job opportunities.”

Tarnished image

All this sounds totally reasonable, but — regardless of the rights or wrongs — it is inevitable that some of this mud will stick to Deloitte.

It is already being contrasted with the experience at PwC, where some of the 250 staff made redundant in June have taken to LinkedIn to praise the company while at the same time telling employers they are open to job offers.

Some of these posts talked about the “modern mindset” at PwC and praised the “extremely talented people” at the firm.

The PwC experience demonstrates that younger people feel no stigma about redundancy if they think they have been treated with respect and dignity. They are also open about the fact they have left the firm.

The Deloitte experience, however, is a risk to the company’s brand, with suggestions that it values its non-compete clauses higher than future opportunities for former staff.

Whether talented professionals remember any of this when the economy picks up and firms start hiring again is a story for a later time. But in publicity terms, at least the optics are not that positive for Deloitte.

If this was a football game, the score would be PwC 1, Deloitte 0. Of course, the game is not over yet, but one team would seem to need a new game plan or at least one which changes the narrative.

Photo credit: iStockphoto/SIphotography