Title.
Let’s talk about starting salaries in public accounting.
Let’s assume a student has an undergraduate accounting degree, a MAcc degree, and has passed all 4 sections of CPA exam.
What do we think is a fair starting salary? #Accounting
— Dr. Josh McGowan, CPA (@Jmcgowan3838) September 19, 2022
Starting salaries in #accounting have gone from B school leaders to laggards. 1st year auditors today barely make more than an auditor who started in 2011 in nominal dollars and less in real dollars. The daily hours + 30 more credits + CPA demand fair compensation. $55K isn’t it. https://t.co/9Lc2hzELev
— Jack Castonguay, PhD, CPA (@profjackc) September 19, 2022
Well? Throw some numbers out. Original Twitter thread here.
I think we’d need to be starting our people around $75K / $85K / $100K / $120K in LCOL -> VHCOL respectively to be attracting good candidates and remaining competitive.
I think the key here is that starting salaries need to increase similar to average of increases across the levels each year, not based on inflation or any other statistic.
Public accounting is meant to be a training ground for 90% of those who enter. Much like legal/medical and other professional training, the idea is to get the training from the big 4 (best training in the world) and leave for the private sector. That’s the real payoff!
Yeah, but public pays so much lower now why even both starting at a public? and I’m saying this as someone who spent 7 years in audit, when I left earlier this year, there were entire classes below me who are just 100% gone, my office didn’t even have anyone they can promote to manager, meanwhile managers and senior managers are quitting at record levels. Public accounting sure wants to weed people out, but never at this 100% level, to the point where we’re having partners who are acting as in charges on jobs, because they don’t have SM, managers, or even a proper senior on a job, just a second year staff leading a couple interns and off shore staffs. That’s the reality, it’s long past the ‘people who want to make partner stay and put in the work for a future payoff, and everyone else fucks off after a few years for a better job in private’, it’s everyone is gone, let’s have this random person from India do some opening balance sheet testing by themselves 🙂
Salary compression is going to start to be a thing … it’s one thing to try to attract new entrants … but, as the salary increases at the lowest level start to bump up against the Seniors -> Managers -> Sr Mgrs/Directors -> it’ll start to get untenable for partner profitability … it’s not a problem until it is …
We’re long overdue for increases across the board in accounting. Its not right that I started at $55k back in 2010 and many firms aren’t much higher than that 12 years (and lots of inflation) later.
Its not like the partners at these firms couldn’t eat some of the cost too. They’ve been making out like bandits for years.
We should be more like commercial banks. Entry level is $40k per year, but they get a VP title.