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MarketScreener Homepage  >  Equities  >  Nyse  >  Accenture    ACN   IE00B4BNMY34

ACCENTURE

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Accenture : Retrains Its Workers as Technology Upends Their Jobs

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06/23/2019 | 03:43pm EDT

By Lauren Weber

Five months after Dorian Twiggs packed up her life in Detroit and moved to Charlotte, N.C., to work as a mortgage underwriter for Accenture PLC, a manager pulled her and some colleagues into an office and told them their jobs were disappearing. Instead of getting laid off, they would be retrained for software roles.

"I'm like, 'This is a joke,' " said Ms. Twiggs, age 36. "I can barely use my cellphone properly."

Within days, she found herself in a six-week course on software testing.

The acceleration of automation across industries has thrown Accenture and its workforce into an identity crisis. The consulting company, which counts 92 of the Fortune 100 companies as clients, touts what it calls a people-first culture. Yet it has become one of the world's largest providers of outsourced labor and has a growing business helping clients automate their own work. This year, Accenture began selling a software known as SynOps that automates actions such as paying invoices. SynOps took five years to develop.

Meanwhile, Accenture's own head count has grown, often in jobs also subject to automation. Since 2003, the firm's workforce has risen more than fivefold, from 83,000 employees to more than 470,000 today. Nearly half of the consulting and outsourcing giant's revenue comes from selling business services such as procurement, transaction processing and call-center operations. But those business lines are increasingly being taken over by machines.

About four years ago, Accenture executives faced a decision: lay off a swath of the firm's workforce, or train employees to deliver new, higher-value services.

Late Chief Executive Pierre Nanterme, who died this year, chose the latter path. The firm has promised to retrain nearly every worker at risk of losing a job to automation, at a cost of nearly $1 billion a year. About 60% of what it saves through taking work from men and women and giving it to machines gets reinvested in training; the other 40% flows to other parts of the business, said Ellyn Shook, Accenture's human-resources chief.

As companies grapple with skills shortages and pressure to transform into digital enterprises, Accenture's experience illustrates how expensive, time-consuming, complicated -- and rewarding -- a mass retraining of workers can be.

"You can't take 200,000 employees and send them to a classroom for a week and think you've solved the problem," said Omar Abbosh, Accenture's former chief strategy officer who now leads its communications, media and technology business. "It's a nonending thing."

Accenture's pledge to invest as much as $1 billion a year in training is one of the largest in the corporate world but actually represents a per-capita decline, to about $2,127 per employee. In 2003, the firm spent $391 million on employee training, or an average of $4,710 per person, based on data in Accenture's annual reports.

A representative for Accenture said the company changed its training approach five years ago to deliver "more effective, highly specialized opportunities" through a combination of internet-connected classrooms around the world, digital learning activities and mobile access. "This has enabled us to become more effective and efficient while simultaneously offering more ways for our people to access and experience learning," he said.

Across the corporate landscape, there is evidence to suggest companies and investors see automation as creating shareholder value largely by reducing labor costs. According to Accenture's research, 74% of executives in 2017 said they planned to use artificial intelligence to automate many tasks over the next three years. Yet 3% said they were going to significantly increase their investment in training workers over that period.

"I don't think we've looked closely at how the incentives drive decisions about technology adoption versus reskilling," Mr. Abbosh said.

Ms. Twiggs, who was introduced to The Wall Street Journal by Accenture, is one of thousands of Accenture employees who have completed retraining and moved into new roles. After the course in 2017, she became a software tester, making sure websites operate as designed -- for example, that a "submit" button on an online form sends information to the right place. Ms. Twiggs was soon moved to a job coordinating tasks between coders and software-testing teams and helping to implement automated testing.

Her new job requires her to be an adviser to clients, not just toil in a back office. "I had been doing mortgages for so long and you kind of get stuck in, like, this is what I do," said Ms. Twiggs, who says she now has skills she can apply to any industry.

Not every story ends like hers. Accenture has laid off some employees when contracts petered out, according to several former employees. "Our options are sometimes limited by client demand for services in specific locations," an Accenture representative said.

And some people decide they don't want to learn a new job. Accenture's annual voluntary turnover ticked up in 2018 to 15% after staying steady at 14% from 2015 to 2017, according to the firm's annual reports.

Lauren Stegen was processing mortgages in Charlotte when Accenture said her assignment was ending. The 29-year-old was offered the chance to retrain for a software-development job. But a month into the course, she decided it wasn't for her.

"It felt a little risky to me," she said. She worried she would travel a lot. She also didn't feel passion for the career, and thought that might hinder her ambition. She quit Accenture in 2017 and took a paralegal role in Buffalo, N.Y.

Ms. Shook says that retraining people for new jobs requires a human touch from managers, from encouraging individuals to imagine new careers to then matching newly trained workers to assignments. That is why Accenture has invested in counselors and specialists to assist in the matching process.

"There is light at the end of the tunnel, but the tunnel is long and dark," she said.

Write to Lauren Weber at lauren.weber@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
ACCENTURE 0.00% 174 Delayed Quote.41.46%
ACCENTURE -0.78% 193.71 Delayed Quote.38.52%
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Financials (USD)
Sales 2019 43 200 M
EBIT 2019 6 313 M
Net income 2019 4 766 M
Finance 2019 5 494 M
Yield 2019 1,51%
P/E ratio 2019 26,6x
P/E ratio 2020 24,3x
EV / Sales2019 2,75x
EV / Sales2020 2,56x
Capitalization 124 B
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Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 191,57  $
Last Close Price 195,32  $
Spread / Highest target 12,6%
Spread / Average Target -1,92%
Spread / Lowest Target -25,8%
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Managers
NameTitle
David P. Rowland Chief Executive Officer & Director
Marjorie Magner Non-Executive Chairman
Johan G. Deblaere COO & Chief Executive-Europe
KC McClure Chief Financial Officer
Paul R. Daugherty Chief Technology & Innovation Officer
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