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Accenture Strengthens Its Competitive Edge as a "People Business"

Accenture's (NYSE: ACN) outstanding ability to attract top talent is setting it apart from the competition. In this video clip from "Beat & Raise," recorded on Sept. 24, Fool.com contributor Neil Patel takes a look at how Accenture is prioritizing its employees.

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Neil Patel: This business is different from any other business that I've looked at and because it's a people business. Their biggest cost I think 60, 70 percent of their operating costs go to they call it cost of service I think. That's obviously the salary, the bonuses for their employees. If you look at historically, their gross margin has pretty much been flat because it's a high variable cost. If you want to serve more clients, you have to hire more consultants and that kind of thing. But if they're able to raise billable hours or something like that, they can boost that but that operating margin has grown over time and I think a lot of that has to do with the maturity in North America which is more developed than other parts of the world.

Another thing with Accenture, because it is a people business. I think just the fact that they highlight all over their website how strong of a brand they have. I think just the name Accenture attracts top talent across the world from business schools or from other tech companies. That's really what this business is about, that's a competitive advantage for these businesses having the best and brightest people want to work for your company and then want to advise other businesses. They have that mode in stage compared to other companies. It served the company well over time and it looks like it's going to continue serving them for a while.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Accenture. The Motley Fool has a disclosure policy.


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