American partners at KPMG will face a fifty percent reduction in their partner income for six months if they wish to leave for a competing firm. The measure is intended to deter the ambition to switch.
This was reported by the British financial newspaper Financial Times. The so-called ‘gardening leave’ refers to the standard six-month break from active duty when transitioning to a competitor in the United States. In recent years, various big four organizations have already imposed penalties to retain employees in the tight labor market.
However, these penalties were often applied as a reduction in partners’ equity at the end of the six-month notice period. KPMG is now taking a different approach by halving the income of departing partners right at the beginning of the ‘gardening leave.’ This makes it more challenging for partners to cover their expenses and may potentially help retain them within KPMG.
KPMG communicated this measure to its partners at the end of July through an email from the American management. According to a KPMG spokesperson, this approach aligns better with the practice and is in line with the fact that partners on gardening leave are “no longer working full-time.”
“Keeping people on the payroll while they’re on gardening leave keeps them out of the market, prevents them from activating their networks, and gives the company time to protect their team and clients,” said an American headhunter in response to the news.
About the author: Jeff Roper
Jeff Roper has been teaching journalism for more than five years. A theorist who nevertheless took up some practice. He is fond of the history of journalism and journalism.