Stephen Griggs, our UK Managing Partner, reflects on stewardship of the firm through COVID-19 and his expectations for the year ahead.
The firm achieved a strong set of financial results for FY21 despite the challenges posed by the pandemic. What were the key factors that led to this financial performance?
As stewards of the firm, it was the responsibility of the Executive team to ensure we emerged from the economic downturn inflicted by the pandemic in as strong a position as possible. Alongside capitalising on the market opportunities that Richard mentions in his foreword the way we managed costs became more critical than ever. Especially as we were playing such a significant part in the nation’s response to the pandemic.
We took clear action in key areas, including scaling back recruitment and making some difficult decisions that impacted our people – we reduced the number of promotions and cancelled our annual pay review process. We also reviewed our Clients & Industries investments to focus on supporting our clients through COVID and took the opportunity to review our real-estate portfolio.
In addition to this, there was significant reduction in travel in FY21, which impacted both costs and revenue. We are planning for this reduction to continue, despite the easing of lockdown measures, as we fulfil our WorldClimate commitments on sustainability.
Towards the end of FY21, as we looked to move beyond COVID-19, we chose to invest in our people – we issued a thank you payment to every person, substantially increased our FY21 bonus pot and offered every person £500 to cover home-working equipment costs.
Thanks to this positive performance, we are in a position to keep investing in our Responsible Business programme, as well as our purpose-led initiatives. For example – our commitment to achieving net-zero by 2030, converting 100% of our fleet to hybrid and electric vehicles, and dedicating resources to increasing access to skills, education and employment through our 5 Million Futures strategy.
What do you think the Future of Work looks like for the year ahead?
It’s essential that our ways of working in the future are underpinned by our commitment to provide an inclusive workplace, ensure the wellbeing of our people, digitise our firm and meet our WorldClimate promises.
This year, we introduced our vision for hybrid working - giving our people the flexibility and choice in when, where, and how they work. We are seeing this as an opportunity to design and implement strategies to create the best environment for our people, our clients, and our firm. Over the coming months, we will analyse how our office spaces are being used. This will help us identify opportunities to trial new technology that will support our hybrid working approach.
Looking ahead to FY22, how will the firm maintain the strong financial performance that you saw in FY21?
Despite the success of the vaccination programme, the economic risks stemming from the pandemic are likely to continue over the coming months.
However, our own forecasts remain optimistic suggesting very high GDP growth in Q2 and Q3 this year. A resurgence in M&A is predicted and we are expecting climate change and employee wellbeing to be firmly on the C-suite agenda.
This, teamed with our strong pipeline of work, gives us confidence that our financial performance will remain strong into FY22.
2021 was a year in which we adapted to the challenges of the pandemic, delivered strong leadership, took a number of decisions to strengthen our market and financial resilience, and continued to invest and make bold moves in the marketplace. We closed the year with revenue for the UK and Switzerland of £4.5 billion, up 4% on 2020.
Simon Kerton-Johnson, our UK Managing Partner for Transformation, reflects on how digital enhancements continue to be at the heart of our business transformation activity.
Over the course of the last two years, we have dialled up our focus on transformation. In FY21, we made significant progress on key priorities – including modernising our back-office functions. This included replacing our legacy systems with more intuitive technology that supports our people with the information they need, when they need it. As part of this, we have invested in Salesforce and SAP as our leading technologies to transform how we take on new work and established a Centralised Business Services function.
Looking ahead, digital enhancements will continue to be at the heart of our transformation activity, including the development of a common digital platform to scale our products, assets and run market offerings. We also have an important part to play in our WorldClimate commitments – for example establishing climate learning pathways to educate all of our employees and embedding a sustainable approach in all aspects of how we deliver our services more sustainably as part of our commitment to becoming NetZero by 2030.
Diversity and inclusion
Building towards inclusion: Deloitte pay report 2021
This report is an evolution of our gender and ethnicity pay reporting, reflecting our continued commitment to transparency. It includes our Black, Asian and other ethnic minority pay gaps and our CEO pay ratio, along with progress against our inclusion agenda and how we support employee wellbeing.Read more
Learning & development
5 Million Futures (5MF) is our social impact strategy, aiming to help five million people get to where they want to be through access to education and employment, empowering individuals with the skills needed to succeed in today’s economy.
Our people are making an impact that matters by using their skills and expertise through volunteering, amplifying the impact of our charities, schools and social enterprises partners. This is our Purpose in action.
Offering professional expertise - pro bono - to charities and social enterprises is a core feature of our programme. Our professionals serve our society partners like we do our clients, delivering projects to address their business challenges.
Transparent and accountable reporting against our climate targets continues to be a priority. All our disclosures are available within the Deloitte UK Performance Metrics, including links to our GHG statements for the UK and NSE, carbon reduction plans for Deloitte LLP and MCS, basis of reporting and our Global TCFD report.
As part of our commitment to drive responsible climate choices we have introduced a new default ESG pension fund that places a greater focus on sustainability for all 35,000 pension plan members.
By engaging and educating our employees on climate change impacts - decisions about what they consume, use, and buy - we will enable our people to make positive climate choices.