Managed services News
Accenture CEO: We Continue To Excel In A Tight Labor Market
‘Technology is at the core of strategy and so we‘re expecting to have a continued tight labor market and we’re continuing… to really excel,’ says Julie Sweet, Accenture CEO. ‘Despite that market, even this last year we added 100,000 people so the fact that there‘s been some layoffs in certain markets isn’t really, I think, going to change much.’
Despite the macroeconomic environment, inflation and hiring shortages, Accenture CEO Julie Sweet said the Dublin-based solutions provider continues to excel when it comes to the talent supply chain.
“Technology is at the core of strategy and so we’re expecting to have a continued tight labor market and we’re continuing… to really excel,” Sweet said during Accenture’s FY22 fourth quarter earnings call Thursday. “Despite that market, even this last year we added 100,000 people so the fact that there’s been some layoffs in certain markets isn’t really, I think, going to change much.”
Accenture has, what Sweet called, an integrated talent control tower that is able to predict earlier and earlier in their sales cycle where the skills will be needed and what type of skills.
“For us, this is just normal business,” she said. “Technology demand is really incredible. All strategies lead to technology and we‘re super pleased with not only our performance there but what we’re seeing ahead as clients continue to build the digital core as fundamental to all of their other strategic needs. Our talent supply chain is able to see that, predict it, understand the skills and keep moving forward.”
Accenture reported a revenue increase of 15 percent to $15.4 billion for the fourth quarter. For the full fiscal year, Accenture reported revenues of $61.6 billion, a record increase of 22 percent.
KC McClure, Accenture’s chief financial officer, said the company was able to grow and scale profitably while managing the wage inflation throughout the year.
“We do expect wage inflation to continue and we have factored that into our guidance,” McClure said during the earnings call.
During the Q&A portion of the call, a question was asked about inflation, macroeconomics and how it will affect Accenture going forward.
McClure said the company continues to see “really strong demand” for services.
“The most recent estimate for IT services continues to show the growth for our industry will be about five percent,” she said. “We’re calling for double-digit growth at the top part of our range and another year of double-digit growth which would have us adding significant scale, yet again, on top of our current $62 billion business.”
Sweet said when Accenture thinks about the macroeconomic climate, the company thinks about what clients need.
“This environment affects different industries differently,” she said. “You’ve got those who are really tied to the supply chain disruption and the inflation and continuing to focus on cost. It makes all clients really think about, ‘OK, what‘s my resilience? Is there more than I can do? Can I take advantage of the environment to push through deeper cost cuts that require you to change behaviors?’”
That makes Accenture think about what they need to pivot to help client needs, similarly to what they did during the pandemic, she said.
“It’s always an opportunity to better serve our clients,” she added.
For its fourth quarter, EPS increased by 17 percent, to $10.71, for the full fiscal year. Free cash flow was $3.6 billion for the fourth quarter and a record $8.8 billion for the full year.
New bookings were $18.4 billion for the fourth quarter and a record $71.7 billion for the full year, a 21 percent increase from the previous year.
For fiscal year 2023, Accenture expects revenue growth of 8 percent to 11 percent in local currency. The company’s fiscal year ends on Aug. 31.
Accenture has also been on an acquiring spree since the summer. Its most recent acquisition came Thursday with the acquisition of Inspirage, a Bellevue, Wash.-based IT services company. Inspirage will bring along its 710 employees to join the Accenture Oracle Business Group to further enhance Oracle’s supply chain skills and expand its capabilities to help product-centric clients create intelligent and innovative supply chain networks. Terms of the deal were not disclosed.