When Spain’s Labor Ministry revealed in January that government officials had hit the Big Four accounting firms’ Madrid offices in the Cuatro Torres business district with surprise inspections at the end of last year, as part of an investigation into alleged abusive work practices, it generated global headlines.
The Spanish arms of the world’s four largest professional services networks – Deloitte, EY, KPMG, and PwC – generate combined annual revenues above €700 million ($770 million), according to the Financial Times. The firms provide audit, assurance, taxation, management consulting, actuarial, corporate finance, and legal services and employ more than 20,000 people in Spain.
Given their revered position in the market, the Big Four tend to attract the brightest graduates, who often switch to other sectors after gaining their accountancy qualifications. To earn those credentials and climb the ranks there is a tacit understanding that employees will put in the hours, despite earning meager early career wages compared to contemporaries in other areas of the financial services industry.
For example, a junior analyst at an investment bank in Spain can expect €100,000 ($110,000) a year, whereas junior staff at the Big Four earn under €35,000 ($38,500). Meanwhile, trainees in the legal service divisions are handed only €14,000 ($15,280), research from executive search firm the IE Law School and Signium points out.
However, with the work-life balance swinging in favor of employees generally since the pandemic, the expected toiling on which the Big Four’s business models rely has been called out by employees in Spain. And now, in an unprecedented move, the government has stepped in. Labor Ministry sources said the investigators are going through all the firms’ contracts, including the provisions on mandatory social security payments.
Marathon working days – and nights
The list of complaints in Spain became too extensive to ignore. For example, in 2021, several junior auditors based in EY’s Barcelona office complained via a group email to their superiors about being forced to work an “unsustainable” 84 hours a week.
More recently, a Euronews article in January featured anonymized accounts from two employees – one at PwC in Madrid and another at Deloitte’s Valencia base – offered further evidence of how long hours were normalized.
The PwC worker said he and his colleagues were accustomed to working 12-hour days and, during hectic times, might not leave the office until the early hours of the following day. He revealed that every department was expected to complete “marathon” working days – and nights. By early 2020, it became too much, and he handed in his notice.
The Deloitte analyst’s story was similar. “My life was just working, then I got used to it,” he told Euronews when reflecting on his nine-month contract spanning late 2020 and 2021. “I didn’t realize it, but from Monday to Thursday, 80% of the time, I was in the office.”
The Labor Ministry took action due to concerns about the firms’ compliance with labor and security laws. “[The] main objective is to check whether there are any overtime hours for which employees have not been paid or received subsequent time off,” it announced.
Yolanda Díaz, labour minister and one of Spain’s deputy prime ministers, told the Financial Times: “The excesses and abuses of overtime hours are being investigated and the mandate is clear … No big company, no matter how big, is beyond the law.”
Rethink work policies
Díaz, who is a member of the communist party, has prioritized monitoring working hours following the introduction, in 2019, of a law that outlined new obligations for organizations to record the start and end times of workers’ days. In 2022, the Labor Ministry totted up over 11,000 infringements, which impacted almost 113,000 workers. In a bid to reduce such practices at firms that contravened the law, it imposed penalties close to €14 million ($15.3 million).
Could it be that after decades of flogging junior staff, in particular, the Big Four will have to transform their work policies – in Spain and elsewhere? And what will that mean for the rest of the financial services industry?
Research published last year by financial software company FloQast showed widespread burnout across the accountancy sector. “Unsustainable working hours fail to create a sustainable working culture,” said Adam Zoucha, the firm’s managing director in EMEA. “With 99% of accountants experiencing some level of burnout during their career, it is more than evident that the demands of the job, at times, can be unbearable.”
Zoucha conceded that the culture of overwork “is not new” for accountants but said the situation had been aggravated by “a tight labor market, the pandemic, and now recession.” Things must change, he urged.
“The myth that accountants must work unfathomable hours to reach the top needs a rethink,” Zoucha said. “Instead, leaders in the financial services industry must address the culture of long-working hours by providing employees with the tools they need to do their job accurately, efficiently, and to deadline.”
Pete Cooper, director of people partners and analytics at human resources software company Personio, agreed that in 2023 a job that demands marathon work stints is likely to result in a net negative. “The bottom line is that a poor or toxic workplace, characterized by excessively long hours and imbalance, will foster discontent, burnout, low productivity, and high employee turnover,” he said.
It’s here that leaders need to set the example, and ensure that real change comes directly from the top, said Cooper. “Companies that prioritize embedding their values into every aspect of their business, and investing in their employees, will foster effective change, boosting business success in the long run,” he added.