Bullying, harassment, racism revealed at EY Oceania as culture review delivered

EY chief executive David Larocca accepts overworking is a problem at the firm after the death of a staff member, but says the solution is complex amid findings the firm faces a mass staff walkout.

A review into EY Oceania has found staff are unwilling to report bulling, harassment and racism, with few confident the firm could deal with issues of overwork. Picture: ChrisPavlich/The Australian

Almost two in five staff at audit and consulting giant EY Oceania are considering quitting as a report into the firm has revealed instances of bullying, sexual harassment, and racism, alongside a culture of overwork and stress.

In response to a report into its culture by former sex discrimination commissioner Elizabeth Broderick, EY has announced a total shake-up of its complaints handling system among 27 recommendations.

On top of this EY will also establish a number of “experimental pilot initiatives” to examine changing the way the firm manages projects and teams, after an exhaustive review identified serious shortcomings its work culture.

The 142-page report, prepared after the death of an EY staff member, found a “significant minority” or 26 percent of staff feel excluded from the workplace.

However, the report found many staff were included.

The report found 15 per cent of EY staff surveyed reported having experienced bullying, with 10 per cent reporting sexual harassment, and 8 per cent experiencing racism.

Ms Broderick’s review found most staff who experienced bullying, racism, or sexual harassment were unlikely to report it.

Staff reported they were confident EY could deal with issues around bullying, sexual harassment, and racism, but only 1 in 3 reported they thought EY could deal with issues of overwork.

However, the report noted these issues were identified as being present across the professional services landscape.

EY responds

EY chief executive David Larocca said overwork was a problem at the firm, but any solution required a “multifaceted” answer.

“There are very few people coming into this industry thinking it’s a 9-5 job,” Mr Larocca said. “This is about managing the peaks and the troughs. The report is clearly saying we’re falling short.”

Mr Larocca noted the report showed the heavy toll long working hours were taking on EY staff.

“It is critical that all our people have the opportunity to reflect on what this report has told us, and that they are able to contribute to the meaningful action we take in response to these findings,” he said.

“I’m heartened to know that the vast majority of people who participated want change, have confidence in our commitment to action this change and are keen to do what they can to accelerate cultural transformation”.

EY regional managing partner and CEO Oceania David Larocca.

Bigger picture

Ms Broderick said the findings of the report were important for other companies in professional services to see issues that may be present in their operations.

“An independent external review also exposes the hard truths about less positive aspects of culture,” she said.

Ms Broderick ran the recent review into the NSW parliament which found issues of bullying, harassment, and sexual misconduct.

In response to the report rival firm Deloitte’s chief people and purpose officer Pip Dexter noted the firm was making a “number of investments” in its workplace culture.

This comes after Deloitte also ran a review of its workforce looking at wellbeing.

Ms Dexter said Deloitte had set up a program to address issues in the business including leave and flexible work.

“We’re piloting new ways of working across the organisation with the intent of improving wellbeing and productivity, including series of focused reduced working week pilots across our organisation,” she said.

EY people, place and culture leader Kate Hillman said the firm would shake up its complaints handling system, outsourcing the system to external providers to ensure staff viewed it as independent.

Ms Hillman said the set up of an external ombudsman for EY complaints was already underway.

“We haven’t been waiting for the matters such as those we’ve picked up,” she said.

Ms Broderick’s report noted some staff members felt there would be winners and losers from an emphasis on diversity and including, noting “some Anglo-Celtic men, in particular, fearing that they may be losing opportunities, status and position in the organisation”.

Ms Hillman said EY was facing “a lot of social change”, which was leading to “a bit of anxiety” among some members of the firm.

Ms Broderick’s report found EY has a culture of long working hours and overwork, with these being highlighted as a “critical issue” for the firm.

Survey findings

The review found 46 per cent of staff reporting their health was negatively affected as a result of overwork, with two in five telling Ms Broderick’s review they were considering quitting EY.

Of the almost 4500 surveyed, many reported working 51 hours or more at least one week in every four, while one in 10 say they work more than 61 hours.

The review surveyed 4,171 staff, almost a third of EY’s local workforce, while a further 216 staff had confidential one-on-one consultations with Ms Broderick’s staff.

The report made 27 recommendations for EY, including revising its performance criteria, charging service lines a cost for churning staff, reducing overwork and long hours.

Ms Broderick’s report also proposed five “experimental pilot initiatives” for solving issues in the firm.

These include margin relief to assess partners on revenue measures, but not profit margins in a bid to resource client engagements without the need for long additional hours.

EY would also reduce targets for staff participating in any pilots.

EY tracks profitability across various parts of the business, including on a project specific level, which has been found to cause a crunch as demands are made on staff to ensure projects come in as cash positive.

Mr Larocca said the pilot project would be about solving issues of people charging for their time.

The firm also proposed enhancing time in lieu across the company in a bid to recognise extra hours, as well as allocating additional staff to increase capacity on jobs.

The report also proposed improving project management but increasing administrative and financial management support, as well as measuring and rewarding diversity and inclusion initiatives.

The findings of the report come days after EY briefed partners at the firm its findings would be uncomfortable, warning they should prepare themselves for discussions with staff about its findings.

Staff were briefed on the findings early on Thursday, before EY publicly released the report.

EY commissioned the review into its culture in September last year, as the firm faced down a potential probe by Safe Work NSW and the NSW Coroner over the death at its office.

Originally published as Bullying, harassment, racism revealed at EY Oceania as culture review delivered