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PwC Reminds Us All to Be Realistic Come Raise Time

Posted on by Daniel Braddock

HERE. WE. GO.

With PricewaterhouseCoopers’ communication about raises behind us, the proverbial dam of anticipation, expectation, and hopefulness gets closer to cresting. From the sound of things though, disappointment and frustration might be joining the flooding the gates as well.

Debate all you want about how much gravy is (or isn’t) on the train, but the partners in your respective firm will tell you that times are still tight. And to be, they’re probably not stretching the truth too far. Here’s what we know:


Revenues were down in 2009 for everyone. Want a re-cap?

Professional service firms are lagging in the market. When Wall Street (and the rest of America) began melting in 2008, accounting firms were still collecting on contractually agreed upon procedures fees. Fees were slashed when contracts were negotiated over the course of the next year, and it was these cuts in services and fees that cost employees their raises, bonuses and sometimes even their jobs. Fees might be back on the uptick; you would know better than me. But the general consensus in staffing camps around the country is that teams are doing more work with less billable hours in the budget. Less billable hours means…less revenue. Less revenue means…double digit bonus season? Doesn’t add up.

Expenses were cut but will the savings make enough of a difference? Recruiting budgets, headcounts, national trainings, corporate donations, and holiday parties – all areas of cost-savings. The financial faucets to many of these areas were adjusted; how soon they’re opened up again is hard to gauge. “Slowly” is the first word that comes to mind.

Raises will be purpose-driven – The vast majority of – if not all – well performing employees will receive raises this year. The pot will be spread out, but don’t be surprised when more love is thrown at strategic groups. Sorry, healthcare auditor, you’re simply not generating as much revenue as your firm’s M&A tax group. Fatter raises will be given to those that the leadership thinks are vital to generating continued revenues and/or will be expensive to replace should they move into the private sector.

The one upside to raises, small as they may be, is that they will drive up your base salary. If you do decide to test the job market, the last two years of effort in public accounting will be mostly represented in your new target number which will lead to a higher base elsewhere.

Stay tuned as we learn more about the state of raises across public accounting. As always, share your thoughts in the comments.

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Read This Before Getting Excited About the Big 4 Announcing Raises Early

What was first a bold move by PricewaterhouseCoopers has now become a pattern for the Big 4 – announcing raises early!!! Woooo-hoooooo!

Or will it be more of a boo-hoo?

Never to be really subtle about anything, news of these promotions and raises is a clear indicator that the firms are trying to lock down their talent and keep the masses happy, and by happy, I mean remaining on the boat. Avoiding an exodus now is absolutely critical; too many people leave and the already short-staffed will be painfully crushed come fall interim work. But where is the balance between raises, bonuses, and promotions?


Early Promotions! – Ahh, the double-edged sword that cuts deep. Years of relentless work, 100 hour weeks, and passionate ass-kissing finally paid off and you’re bumped up ahead of schedule. Welcome to hell. Take the expectations dial and crank it to max; your boss just got free reign to play the, “Well you got skip promoted, no way you can handle this” card. And your peers? They’re no longer your peers because money and job titles make people finicky. Better focus on befriending the first year hires.

And speaking of money – because promotional raises are typically a smaller percentage for early promotes, there’s no tangible financial gain to being bumped up a year early. Why is this? Because you should be happy to be get promoted early. Last time I checked, warm and fuzzy feelings can’t be put towards the mortgage.

• Don’t waste time printing new business cards. – Some of you will soon be inheriting a new job title to slap on top of your newly polished resume. The firms run the risk of those moving up to manager might jump ship completely. Don’t be surprised if the senior-to-manager class is larger than expected. Because eenie meenie minie moe – you’re moving on. Remember, it’s expected.

• “That’s it?!” – Unless you were part of the 0.043% of those who received raises since 2008, you’ve been living in monetary stagnation for quite some time; many of you even complained about receiving the “you’re lucky to have a job” speech from your superiors. When you have the raise conversation this summer, keep in mind that it is a raise for two years of work. Two years; two busy seasons; two increases in monthly rent. Don’t let yourself get all giddy over seven percent.

KPMG’s Layoffs in Advisory May Have Made Room for Some Auditors

Happy Hangover Thursday, folks. Hopefully the green food coloring washed off easily this morning.

I was out networking with my Irish brothers last night in midtown New York, quite a few blocks north of my normal after-work locale. Second Avenue bars full of cold beer and burned out white collars, St. Patty’s Day was a welcomed Wednesday relief for those in busy season. The day was over, the night was turning late and, for once, shop talk was put on the back burner. That is, until I heard the phrase “Uncle Peat” used as the object of affection bitterness for a toast.

Obviously, I couldn’t resist.


DWB: “Are you guys auditors?”

Auditor 1: “Yeah, over at KPMG. Hopefully not for long, though.”

DWB: “Nice, nice. Moving on to better things?”

Auditor 2: “Hopefully.”

Auditor 1: “Not soon enough.”

A round of drinks later (toast to Uncle Peat not included) and these Irish-for-the-day gentlemen filled me in about an email circulating around KPMG’s NYC audit practice regarding a temporary rotation into the Transaction Services (TS) practice. TS specializes in mergers & acquisitions work and was — most likely — hit steeply by the rounds of the falling guillotine back in 2008 and 2009.

How does a practice that was hemorrhaging money and resources a year ago now have business blowing through the door at such a fierce rate? If you read anything beyond the usual busy season distractions, it’d come as no surprise to you that the markets are slowly picking up. But service firms typically lag in response, both on the positive (Woo-hoo, new business!) and negative (Sorry, this isn’t about you – this is about the numbers) sides of the equation. Nonetheless, Uncle Peat’s auditors should be leaping at this opportunity. A rotation out of audit can be refreshing, even in the quieter months of summer.

Did KPMG’s advisory shake up and realignment pay off? Is the firm’s leadership blowing smoke to perk up the down-trodden auditors currently drowning in busy season? Was a picture of a giant carrot on a string used in the email? If you received this email, I’d love to read the text. Last night’s informants promised to send it over, but they probably called in with emergency doctor “appointments” this morning.

Future Big 4 Associate Needs Help Choosing Between Commuting Hell and a Happy Marriage

Ed. Note: DWB was sober long enough today to pen this post for the Friday edition of Accounting Career Couch. If you’ve got a question for us email us at advice@goingconcern.com. We’ll dispense with further pleasantries and get right to it.

I just received three offers from two Big 4 firms in San Francisco (Deloitte and KPMG) for audit and one Big 4 firm for advisory internal audit in San Jose. I really like the idea of going into advisory but the problem is that I live in San Francisco and the advisory clients for this firm are all located around San Jose and the Silicon Valley. This would likely mean at least a one hour and 15 minute commute every day each way from SF to SJ and back againlients I would likely be working on from SF are all located within 20 minutes of my apartment in the city. Moving to San Jose is out of the question for me because my wife works in SF and I’m not ready for a divorce just yet. My question to you and Going Concern readers is should I take the advisory job despite the crazy commute or should I take one of the audit positions?

I’d still be very happy taking one of the audit positions but I’d be lying if I didn’t say that the more consistent working hours of advisory internal audit didn’t appeal to me much more than audit (no insane busy season in advisory). Much of this benefit would be negated by my much longer commute though. Also, if I choose advisory I would be likely getting reimbursed $0 for my commute since the job is based out of the SJ office and I am based in SF. Although $0.50 a mile doesn’t sound like a lot, it really does add up to several thousand dollars in missed reimbursement expenses for such a long commute (assuming 80 miles a day in reimbursable driving). Also, the advisory position pay is slightly less to begin with (approximately $1,500 less) than my audit offers. Other considerations that I am thinking about are that many people from the Deloitte office (mostly associates) have said that the Deloitte SF office is understaffed. To me this means more opportunity for advancement but also more hours of work. Also, I feel that if I started in audit I could do two years of audit and if I didn’t like it then could jump ship to advisory in SF rather than having to start at advisory in SJ and beg to get a transfer to the SF advisory practice in a year or two. So what should I do? Should the lengthy and costly commute for advisory versus audit be a deal breaker? Will I struggle to break into advisory after two years in audit if I decide to make the switch?

Hopefully I’ve given enough info about my choices so that DWBraddock will stop complaining about us not saying enough in our requests for advice.

Kudos to you and your detailed email. Peons of the accounting world – take note [Ed. note: but there is something to be said for brevity. Yeesh.].

First off, my advice is from the “this is usually how it works” camp. Are there exceptions? Of course, and I’m sure that commenters will point them out.

Are you sure you will be reimbursed for every single mile that you travel? The HR policy is typically the net difference between your home to the office and your home to the client site. For example if you live 50 miles from the office and the client site is 53 miles from your home, you are reimbursed for the three mile difference. I strongly encourage you to consult HR before you go re-adjusting the all-in value of the advisory offer with thousands of dollars of mileage.

Now that I crushed your dream of banking $1,000’s, let’s discuss the audit vs. internal audit battle. You make a lot of assumptions in your email, but I think these bullets cover everything you discussed:

• Internal audit should not be looked at as a green-lighted pass to jump around the advisory practice. Many advisory roles are target recruited and are very specialized from a work capacity point of view. The name “advisory” doesn’t mean the roles are similar; it’s simply a nicer way of saying “everything that’s not audit and tax.”

• You will not be fast-tracked at Deloitte just because they’re short staffed. You will work your ass off.

• It’s easier to go from internal audit to external audit, not the other way around (the way you mentioned).

• Don’t think a transfer is a simple process. There has to be a need in the office you want to transfer to, and considering you’re contemplating and office and practice switch-a-roo in one swift motion…really? This is not a game – this is business and not everyone gets what they want.

• PS – I forwarded this to your wife. She said you’re sleeping on the couch for the next week.