We reflect on a year of profound change for our clients, our markets and our people
Where next?
As the pandemic eased and we returned to our offices across the UK, much of what we saw may have looked familiar, but the environment in which we were operating was profoundly different. As a result, our business, like so many others, found itself at an inflection point. Driven by external forces such as the pandemic, the cost of living crisis, and the war in Ukraine, we have seen a fundamental transformation across society, business and government that has challenged how we think, act and operate.
Empowered flexibility
Hybrid working is reshaping our towns and cities. It is creating new operating models, and providing opportunities for localised growth and investment across the UK. We called on our previous investments in collaboration technologies, alliances and digital upskilling to adapt to this model wholeheartedly.
Importantly, our commitment to hybrid working means we’ve been able to service client requests directly through a workforce that is able to collaborate regardless of where it is based. Over the year, our client satisfaction scores increased to 9.11/10, up from 8.9/10 in 2021. We’ve also won some Awards along the way.
Our approach to empowered flexibility and initiatives such as summer working hours have landed well, generating our highest ever employee engagement score of 80%.
But we want to build on these gains in the longer term. We can now better tap into new and diverse talent pools across the country, and ensure that the people we employ and upskill reflect our clients. Taking a lead on transparency over the past five years has focussed our attention on the diversity of our employee base, while widening access to people from all socio-economic backgrounds.
Space-based services are already pivotal in our day-to-day lives. Satellites orbiting the earth keep us connected to family, friends and colleagues. They help us navigate the roads and seas, help us monitor the climate and forecast the weather, and play a critical role in our security. A new generation of lower-cost satellites will enable a wide range of additional services, for example supporting agriculture, the insurance industry, homeland security, and monitoring emissions.
Last year, the UK government published its first ever National Space Strategy (NSS). The Strategy was produced by the UK Space Agency (UKSA), Department for Business, Energy & Industrial Strategy (BEIS), and the Ministry of Defence (MOD). It outlined how the UK will become a leading player in Space and capitalise on the growth opportunity, with the global space economy projected to grow from an estimated £270 billion in 2019 to £490 billion by 2030.
The ambition includes building one of the most innovative and attractive space economies in the world, by establishing global leadership in current and future high-growth areas, such as satellite broadband operations, in-orbit servicing and space debris removal, enhancing satellite manufacturing and communications, and working with British companies at the cutting edge of the latest advances in space technologies.
PwC supported UKSA in turning strategy to execution, both by understanding the barriers that constrain greater investment into the sector and by helping UKSA to define its delivery portfolio and governance to deliver on the range of space missions and capabilities.
Harnessing global investment
The UK is well placed to become a global leader in space, due to its heritage, deep expertise in academia and key sub-sectors, SME’s operating in nascent growth areas, and the business-friendly environment. However, there is a great deal of competition for space investment around the world. A multidisciplinary PwC working group from Strategy&, Deals, and Economics worked collaboratively with UKSA’s Strategy Team to help understand the barriers to further investment into the UK Space industry.
Extensive research, including interviews with over 50 leading figures from across the space ecosystem, helped us to understand the reasons investments are made in the sector and the decisions behind recent success, as well as the barriers that the UK faces in attracting this investment and potential solutions to address them. The UKSA is focussed on catalysing investment by deploying funding and resources to multiply the value of non-government contracts and private capital secured by UK space organisations, and to maximise the sector’s long-term growth.
“There are huge opportunities to catalyse investment into the UK space sector and establish ourselves as a global leader in high-growth space technology markets. Our work with PwC has ensured we are match-fit to deliver the ambition of the National Space Strategy to make the UK one of the world’s most innovative and attractive space economies.”
Defining the delivery portfolio and establishing governance
In light of the space missions and capabilities set out in the NSS, PwC worked closely with the UKSA to define how it delivers its priorities, and to identify the programmes and projects to be progressed over the next three years. This included establishing the internal governance required to provide oversight of delivery, and the tools and processes for making sure the right information was collated to monitor performance. Our work has set the UKSA leadership team up to make informed and timely management decisions to support successful delivery.
External forces
All of this has played out against a backdrop of increased geopolitical instability. The immediate effects for us were felt in March when we announced the departure of the Russian and Belarussian firms from the global PwC network, following the invasion of Ukraine. A move that ultimately reinforced the importance of detailed local market knowledge, which is at the heart of our interconnected model.
A new approach
We articulated these fundamental changes through The New Equation. Our global strategy, rolled out last summer, recognises that we often take a convenor role in a multi-stakeholder world, where we are in a great position to work collaboratively to both frame, and help solve, client problems. In doing so, we build trust in both the market and those client brands, and create sustained outcomes.
This approach informed our decision to create a tech hub in Manchester, our commitment to sustainable offices (including our new Belfast office, which opened at the start of the financial year), and our continued work to improve social mobility. We launched a new work experience programme ring-fenced for students from low income backgrounds, and joined a consortium of businesses to support Ukrainian refugees into skilled work.
Investment and impact
The combined effect of this period of profound disruption has been a huge growth in demand for insight and advice, as well as our services, from clients. Our multidisciplinary approach makes us agile, allowing us to configure teams of experts to deal with any business challenge.
With revenues of over £5bn, delivering a 31% increase in total consolidated profit of £1,535m, we’ve seen strong demand right across our Lines of Service and industry groups.
Key Performance Indicators
contribution
engagement scores
per partner*
This performance provided the stability that has allowed us to make the biggest investment in UK staff salaries for a decade, with an extra £165m increase on the prior year. Salaries for many of our entry programmes are also increasing, with starting salaries in audit rising by 10%. A further £138m was allocated to UK staff bonuses in FY22, up £10m on the prior year.
Continuing to invest in growing our teams remains a priority - applications for jobs at the firm topped 300,000 across the year, which constitutes nearly 1% of the working population of the UK.
From these applications, we recruited more than 550 experienced audit professionals and invested further in audit technology in support of our continued focus on improving quality. This year, the Financial Reporting Council gave 83% of PwC audits it inspected the highest rating.
Despite the challenges we’ve faced, the underlying resilience of our business means we plan to continue to grow sustainably and play our part in strengthening the UK’s economic prosperity.
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