HUMAN RESOURCE ALLOCATION

Human Resource Allocation

Human Resource Allocation

Introduction

PricewaterhouseCoopers (PwC) was formed by the merger between Coopers & Lybrand and Price Waterhouse in 1998. The merger created the largest company in the accounting industry at the time. Today, PwC is the third largest of the Big 4 accounting firms. Globally, it employs about 169,000 people in member firms across 158 countries. Half of PwC's clients have sales of more than $10 billion per year. Its clients include American Express, 3M and Kraft Foods. In the five years to 2011, PwC revenue has increased at an average annualized rate of approximately 5.8% to $29.2 billion.

PwC's accounting and auditing business represents half of the company's revenue. While PwC's global revenue increased 1.5% in 2010, revenue from its auditing services declined 1.3% over 2009. Following the recession, pricing competition has affected many operators in this industry. In spite of the fact that the company experienced a rise in demand in 2010, pricing pressures caused an overall fall in revenue during the year. In 2011, increased demand caused the company's revenue from global audit and accounting practice to rise 7.0% despite downward pricing pressures.

Approximately 28.2% of PwC's revenue is generated in the United States; in 2009, the firm generated $7.4 billion domestically. This represents a decline of 2.8% over PwC's domestic revenue in 2008. Like most operators in the industry, 2009 was a difficult year. Each of the company's segments experienced diminished demand; the advisory segment was the most severely affected, with revenue declining 11.4%. In spite of this, advisory has continued to grow during the current period- a trend that has occurred nationwide as firms offer more services to clients. In 2009, revenue from advisory services was approximately 23%, an increase of 14% from 2007 (Stephen, 2009, 56 - 90).

In 2008, PwC experienced relatively strong growth as global revenue increased 11.9%. However, the majority of this growth was overseas. In the Asia region, revenue rose 21%, while for the Middle East and Africa regions grew 20%. Its firms in China, India, the Middle East and Central and Eastern Europe reported particularly strong growth. On the other hand, revenue from North America grew by only 2.0%, reflecting the economic difficulties in the region. The firm also announced that it was to restructure the organization into three clusters, the east, west and central clusters.

In 2007, PwC's global advisory services segment posted revenue growth of 14.6% to $5.7 billion, driven by the large volume of deals-based activity and strategic emphasis on priority services and clients. Global tax revenue rose 15.1% to $6.3 billion, as a result of growth in merger and acquisition activity. Lower demand for International Financial Reporting Standards (IFRS) and from Sarbanes-Oxley-related activity resulted in 6.7% growth in revenue to $13.1 billion. Developing markets continued to expand, with revenue up 22.4% from branches in Central and Eastern Europe; 19.1% growth in South and Central America; and 20.8% growth in Africa and the Middle East. Many member firms achieved double-digit revenue growth for the third consecutive year, ...