PwC's 2023 annual report: What you need to know

PwC’s annual report is a story of a firm embracing a human-led, tech-powered strategy.

Dubbed The New Equation, PwC’s 2023 strategy has led the top tier firm to experience growth despite a tumultuous year marked by economic, political, and social disruptions. The firm reports a 16% increase in revenue to £5.8bn, attributing this growth to a long-term focus on quality, training, and adoption of new technologies.

The report also underscores their employment of over 25,000 people in the UK, significant investments in Generative AI, and acquisition of HR software firm PeopleForce. It also mentions their involvement in sectors critical to the UK’s sustainable economic growth and their successful launch of new ESG services.

Despite the economic challenges, including high inflation and geopolitical instability, PwC has managed to maintain and expand its client base in 2023, emphasising the firm’s adaptability and commitment to supporting clients through changing strategies and operational models. The report also discusses the firm’s contribution to the health industry, their approach to solving industry problems, and their commitment to social mobility and community contributions.

Devils in the details

The firm’s Group gross revenue increased by 16% to £5.8 billion, with growth observed across all key industry sectors, attributed to solid performances in the UK, Channel Islands, and the dynamic Middle East advisory market.

The Audit practice experienced a notable 19% revenue increase, while the Consulting practice grew by 30%, driven by demands in the Middle East and UK for energy diversification and sustainability projects. The Tax practice also saw a 19% growth, and there was an overall increase in demand for Execution Managed Services.

Investments in technology, particularly Generative AI and Next Generation Audit technology, are a strategic focus, aiming to enhance client outcomes and business performance. PwC is partnering with over 30 technology organisations, growing transformation and managed services offerings, and emphasizing its strong financial services proficiency.

Community engagement is significant, with 28% of employees volunteering, surpassing the 50,000-hour target and contributing over £10 million in cash, time, and support. The PwC Foundation has raised over £1m for various causes since July 2020, and the firm is committed to social value projects, support for refugees, water safety initiatives, and expanding its partnerships for social and environmental impact. The report reflects PwC’s dedication to delivering profitable growth while investing in technology, people, and community engagement.

Under the hood

PwC UK’s People strategy in 2023 aimed at creating an environment where everyone can thrive. The firm has made considerable progress in fostering an inclusive culture; pay gaps have been recorded across different demographics, with a general trend of reduction, although there’s an increase in the gap for sexual orientation.

Pay Gap Data (Median as of 5 April 2023) Excluding Partners:

• Gender Pay Gap: Down to 4.3% from 6.8% in 2022.
• Ethnicity Pay Gap: -2.8%, up from -6.4% in 2022.
• Socio-economic Background Pay Gap: Down to 13.2% from 13.3% in 2022.
• Disability Pay Gap: Down to 12.6% from 16.3% in 2022.
• Sexual Orientation Pay Gap: Increased to 17.5% from 15.4% in 2022

The report details enhanced benefits, including expanded medical benefits, increased support for parents and carers, and financial wellbeing initiatives in response to rising living costs. There’s a focus on flexible working arrangements, including summer working hours and international remote working options, while maintaining a balance with in-office presence for its benefits.

PwC remains committed to learning and growth, with considerable investment in development and progression, including a new GenAI upskilling program and flagship leadership programs. They have launched an international talent mobility program, “Gateway,” enhancing their staff’s global acumen. Despite this, the average hours of training per employee decreased to 49.9 (down from 50.7 in FY22). The gender split was 51.7 hours for male employees and 47.9 hours for women. Spend on learning and development per full time employee rose to £2,273 (up from £1,899 in FY22).

The firm has continued efforts to create fairer access to opportunities by removing certain academic requirements for their roles, broadening their reach to a more diverse student population, and ensuring entry-level wages are competitive. Health and wellbeing remain a priority with various measures to support staff wellbeing.

Putting their green foot forward

The 2023 report also showcased the firm’s commitment to addressing climate change and enhancing sustainability practices across its operations, client services, and wider community engagements. PwC is advancing its human-led, tech-powered approach to meet the increasing demand for ESG assurance and advisory services, particularly in areas of sustainability reporting, supply chain, and climate change.

The firm has upskilled its staff with an extensive ESG learning curriculum and external training opportunities, reflecting a 70% increase in personnel delivering ESG-related work compared to the previous year. PwC’s dedicated Sustainability practice has seen increased demand, and the firm has engaged in significant projects like verifying Unilever’s sustainability data, working with SBTi on emissions reduction targets, and examining the household impact of climate transition in the UK.

Additionally, PwC has focused on reducing Scope 3 emissions, collaborating with suppliers on net zero initiatives, and conducting research on climate tech, carbon offsetting, and nature investment. They also encourage sustainable behaviours among employees through various initiatives, including an edible garden, the Global Centre for Nature Positive Business, and an annual Veganuary Workplace Challenge.

Investing in the digital

PwC also invested heavily in 2023, notably within its tech stack – both infrastructure and skills.  Significant focus was given to Generative AI (GenAI), where PwC has partnered with AI startup Harvey for exclusive access to an AI platform enhancing legal business solutions.

PwC plans to further develop and train proprietary AI models with Harvey. This is alongside a major upskilling initiative in GenAI and continued investment in cloud, data, analytics, and developer capabilities, including a partnership with Microsoft for scalable offerings using OpenAI’s GPT-4 and Azure OpenAI Service.

To showcase these investments, PwC has opened two immersive client experiences in Manchester (Frictionless Futures) and London (focused on sustainability). These spaces are designed to demonstrate how technology can transform business processes and address sustainability challenges, featuring interactive and collaborative elements to engage clients directly with the technology.