What is the right salary for today’s CAs?

It’s a question I am often asked when talking to partners or human resources managers in public accounting firms looking to hire. They might go to my recruiting web site (www.ifindcas.com) and download my free ‘Ontario public accounting salary survey’ and then I get the call: ‘Steve, your survey was published in March 2004, are there any changes since then?’ and ‘What do I have to pay to attract the best talent available?’ or so the conversation goes.

And they’re good questions.

The market is extraordinarily hot these days, and good talent is often quickly snapped up by employers eager to get ramped up for another busy season (which will soon be upon us).

Many of the bigger firms have given raises in the region of 5% to 7%, some even more to their brightest stars, and this has an inflationary effect on the ‘going rate’.

Add to this, the fact that fewer people are joining the accounting profession from university and that more and more are leaving public accounting, either to go into industry or simply through the demographics of our members, as our people reach retirement in greater numbers than ever before, and as the ‘commodity’ of qualified CAs, CGAs and CMAs becomes ever more scarce, the supply and demand process kicks in – in the form of increased salary levels.

So, to answer that question, look at the March 2004 salary levels in my survey and as a ‘rule of thumb’, add 6% to all the salaries published across the board and you won’t be too far off.

‘But how can I compete with the bigger firms?’ I am often asked at that point. Another good question.

The truth is that if you are competing purely on salary levels, then it’s a case of upping the ante and passing these costs on to clients in the fees that they pay. Not an easy pill to swallow for most.

Alternatively, one might try to create a better overall package by offering better conditions, more vacation, better benefits, earlier responsibility, more client contact, more staff mentoring, special skills training, higher job satisfaction, continuing professional education and many other fringe benefits (like a day off on your birthday) that need not cost the Earth to implement.

But the main reason why many prospective employers are disappointed when their best offer is turned down in favour of one from another firm, is the enthusiasm displayed about the firm by those interviewing the candidate.

Money is an issue, sure, but when all things are pretty equal, then the candidate often goes with the firm whose people seemed the most ‘pumped up’ or ‘enthusiastic’ about their firm in the interview process, and where the firm had a number of examples of promotion from within, especially to Partner level..

In recent months, with my clients planning for busy season, my staff and I have been exceptionally busy head-hunting for candidates with real partnership material. And this year I have noticed something different about candidates.

Individuals with real ‘spark’ and ‘partnership potential’ are fewer in number than ever before.

It’s a real dilemma that our profession faces. Where are the partners of tomorrow going to come from?

If we are sinking to the ‘lowest common denominator’ the future looks pretty bleak, but all is not lost.

There are still some very high-end people within our profession. But high-end individuals often come with high high-end salary requirements.

It’s a simple fact that we will have to face yet higher salaries for the best talent to be induced to join our firms and to stem the tide of newly qualified staff defecting to industry.

These higher salaries can, despite how you might first react, be passed onto our clients.

Have you noticed how the biggest, most successful accounting firms in your area are often also the most expensive?

Look in the car parks of any successful business and you’ll see Jaguars, Mercedes-Benz, BMWs and so on. If price were the only issue in our buying decisions, wouldn’t we all be driving Kias? Ask any driver of a Jaguar, Merceds or BMW and they’ll tell you that their vehicle is great value for money, despite the higher initial price of the car.

And so it follows that the biggest difference we can make that overcomes higher fees is creating awareness in our clients’ minds about the VALUE we add to their businesses.

Those firms who create the most value for their clients will be able to charge the highest fees, and that’s something I’ll be writing about in the next issue. See you then and happy new year to you all.

© 2004, MFA Group Inc