“The future is technology and you’ve got to lean in and embrace that,” says Enda McDonagh, managing partner of PwC Ireland, one of the Big Four accounting firms in the State.
We’re speaking in his office overlooking the Liffey in Dublin’s north Docklands. The impressive double aspect view stretches down to Liberty Hall on one side and up towards Capital Dock the other way.
“It’s a great view all right, but I usually have my back to it working on the computer,” he says.
Technology is at the heart of the change that has been taking place on McDonagh’s watch since he took over the reins at PwC almost two years ago.
“The big thing we’re trying to get after is a much better focus on the technology part of what we can bring to our clients,” he says, adding that PwC has long had a good reputation in that area.
Artificial intelligence is the latest technology taking centre stage, particularly generative AI. “We’ve got stuck into AI in a big way in the past couple of years,” he says.
The firm converted to Microsoft M365, which brings Copilot capability with it. As part of a global collaboration with OpenAI, it has created Chat PwC to undertake tasks that “previously would have been done by people manually researching, and helps speed up the productivity on a day-to-day basis”.
Can he trust its accuracy?
“You always have validation checks, but because it’s pulling from our own materials, it’s very reliable,” he says. PwC is also using Harvey, a tax and legal tool, generating first-level content to use in the practice.
McDonagh says AI is not replacing jobs at the firm.
“There hasn’t really been any net replacement of our people with AI. We’re trying to take tasks from our people in the administrative space and repurpose what they do,” he says.
“We’re not seeing AI replacing humans, we’re just seeing it changing what the human does in the dynamic.”
Last year, PwC added 1,028 staff, including 383 graduates, to bring its headcount to 3,566. McDonagh says a similar number will be added in 2025, with “broadly similar numbers” employed by the firm overall, reflecting the significant annual churn at professional services firms.
PwC Ireland reported a 2.8 per cent increase in net revenue last year to €469 million.
In gross terms, revenue was €569 million, up 9.6 per cent on 2023, but its “expenses and disbursements on client engagements” rose by 59 per cent to €100 million.
All the figures exclude VAT and relate to income generated by PwC’s firms in the Republic and Northern Ireland. But it does not include the firm’s advisory and consulting activities in the North, which are part of the UK firm and employ about 3,000 people.
Advisory services was the big drag on PwC Ireland’s numbers, declining by €16 million to €107 million. This included €63 million (up from €59 million a year earlier) in revenue from permitted non-audit services to entities that are audited by the Republic of Ireland firm of PwC.
Its assurance and tax units recorded revenue increases of 9 per cent and 7.4 per cent respectively.
McDonagh says the slowing down in its advisory business was a combination of fewer deals and more prudence from clients in terms of discretionary spend.
“What we’ve entered into a period of now is uncertainty, which is the worst possible thing for businesses,” he says by way of reference to US president Donald Trump and his flip-flops on tariffs.
“This ebb and flow period of going to bed at night and waking up in the morning and the goalposts have shifted again is the really tricky part. We are seeing a real slowdown in new investment allocations, M&A is on pause and there’s a period of stasis.”
Setting Trump aside, McDonagh says now is the time for Ireland to tackle its “competitiveness issues”, particularly around infrastructure, to “stay agile” and continue to attract new investment.
“We’re going to have to work harder than we have done in a while on the Irish story in the context of what’s going on. The question for all of us where does the whole tariff debate land,” he says.
In spite of the market being a “bit more challenging”, McDonagh says PwC’s ambition is to “keep growing” the firm, hiring in the right skills rather than making acquisitions.
“M&A would take place at a [global] network level more than a local level,” he says.
PwC is the smallest of the Irish Big Four firms. EY is the clear leader with annual revenues last reported at €772 million for the island. KPMG’s income was €625 million and Deloitte’s €517 million.
“We just focus on what we’re doing in terms of our own strategy. There are lots of apples and oranges in those numbers. We’re happy with our own numbers ... when one of your businesses [advisory] is down by double digits and you’re still able to grow and trade through, that’s a good result for the year,” he says.
In terms of this year’s revenues, McDonagh is “hopeful” of beating the 3 per cent growth achieved last time, while recognising the global economic uncertainty that exists.
He declines to comment on the trends in pay and profits for Irish partners, amid reports that UK partner pay last year fell by 5 per cent on average while the firm’s profits declined by 14 per cent.
In the US, the firm has been laying off thousands of staff while profits in Asia-Pacific fell as scandals in China and Australia affected the firm.
“If your revenue is growing at less than it did before, that obviously has an impact, but I’m not getting into it beyond the revenue figure.”
The Irish firm was itself dragged into a scandal last year involving PwC in Australia when it was revealed that a partner in its Australian tax practice had used confidential information from government meetings to assist colleagues in winning new business from multinational technology companies.
It emerged that former PwC Australia tax partner Peter-John Collins, who was banned from practising as a tax agent after sharing secret information, sought in 2015 to tap PwC Ireland’s contacts with technology companies in the United States to share his insights.
PwC Ireland repeatedly declined to disclose the identity of the individual in its firm who received the email. McDonagh declined to comment on the Australia issue, saying it had been dealt with “at international level” by the firm and there was no issue for the Irish business.
Back to the day-to-day business at home, PwC last September enforced a three-day-a-week policy for staff attendance in its offices (it has bases in Dublin, Belfast, Cork, Galway, Kilkenny, Limerick, Waterford and Wexford).
“The reason we looked for a three-day commitment is because our business is about people and one of our core philosophies is about high-performing teams and people being together in that team environment so they can learn and grow and foster. Getting that three days in the office is the right balance for us at the moment,” he says.
McDonagh says attendance at its headquarters in Dublin peaks at about 1,600 staff on days midweek, a similar level to pre-Covid days. “Fridays are a lost day to the city centre,” he says.
“Like most everybody else, we went into Covid not thinking a business like ours could operate remotely. The business was incredibly resilient. But a huge amount of how you develop as a professional is the learned experience of being in a team environment and learning from interactions. It’s working well for us now.”
Born in Southend in southeast England, his family returned to Ireland when he was two and McDonagh grew up in Tallaght, southwest Dublin. This was a time before the M50 and the Square shopping centre when there was a lot of farmland in the area.
“A lot of football and other games would have been played on those spaces back then,” he says.
His late father hailed from Enniskillen, Co Fermanagh, his mother from Clones, Co Monaghan. “I’m a big GAA fan and I probably went to more Ulster finals [in Clones] as a kid growing up by dint of spending time with my mother’s family in the summer,” he says.
In spite of that childhood experience, he is a “diehard Dubs fan, there’s no ambiguity when it comes to that”, but he always has a “soft spot” for Ulster teams in the championship.
His father worked in Irish Rail while his mother’s family was behind a hardware store in Clones called Morgans.
He attended Templeogue College for secondary school before taking a BComm business degree in University College Dublin and joining Craig Gardner Price Waterhouse (one half of what later became PwC) in 1994 via the annual milk-round recruitment sweep of universities that the big accounting firms all do.
He later followed that with a master’s degree in accounting, sponsored by the firm.
Why accounting?
“I had a fantastic accounting teacher in the way that, in schools, you can get. That’s what fostered the interest in accounting,” he says.
He worked as an auditor, making his way up the ranks to manager level, at which point he took advantage of PwC’s international transfer system to take a role in Boston in 2000, spending three years in the US city.
“I wanted to do something different. So I applied to go to the US and Boston came out of the hopper,” McDonagh says.
“Being Irish there is not culturally a shock to the system. Boston is one of the more European American cities if that’s an appropriate analogy. The downtown area is not the block model of a lot of American cities. In terms of quality of life and opportunity, Boston at that time was brilliant.
“I also worked a lot with the pharmaceutical industry over there, so when I came back, with the growth in pharma here, it worked out very well for me.”
In 2006, McDonagh became a partner in the firm, led the assurance practice and served eight years on the leadership team of his predecessor as managing partner, Feargal O’Rourke.
He was chosen to lead the firm two years ago, taking over from O’Rourke in July 2023 for a four-year term.
Will he go again for second term?
“That will be for the [146] partners to decide,” he says with a smile. “I’m really enjoying the role. It’s a privilege to lead a firm like this. As long as people want me around, I’m happy to stay.
“If you’d asked me in 1994 did I ever think I’d be sitting in a chair like this, I’d never have thought that in a million years. But there’s an innate part of me that thinks I want to be the best that I can be.”
CV
Name: Enda McDonagh
Job: Managing partner, PwC
Age: 52
Lives: Blackrock, Co Dublin
Family: Married, with three children: a 17-year-old son and 15-year-old twins (one boy, one girl).
Hobbies: Big fan of American sports, having lived and worked in Boston for three years. Also a Manchester United season ticket holder and a “diehard” Dublin GAA fan.
Something we might expect: “I’m a great believer in the importance of team. The highlight of any week is when I get a call from a client to tell me the team we have working with them have gone above and beyond to deliver for them.”
Something that might surprise: “Notwithstanding my well-known support of Irish sporting teams, I was actually born in England.”
