How Much Should Public Accounting Starting Salaries Be to Make Public Accounting Starting Salaries Less Awful?

Posted on by Adrienne Gonzalez
a concept photo of a man seeking money

Title.

Well? Throw some numbers out. Original Twitter thread here.

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Lowering the Bar – How the Big 4 Can Raise Morale by Reducing Starting Salaries

Last Friday’s post by Caleb surrounding the Bonus Watch at Deloitte sparked a handful of intuitive comments from GC readers.

In case you didn’t read the post and subsequent commentary, Commenter Anon51 responded to the question “what do readers suggest firms do to retain practitioners” with the following:

1. treat every team member with respect

2. you can’t just force your team to work harder year after year with fewer people and a smaller budget

3. pay 4-7 year people more, pay new hires less, so it seems there is an incentive to working harder

4. reward your people with an extra day off without having to utilize vacation time, especially after a really busy month/audit

Point 3 is bolded because it resulted in the following comment from Guest:

“That’s a really good idea, and I’m not being sarcastic. There is no reason why new hires fresh out of college need to make $59k ($55k + $4k sign-on bonus), when they would happily work for $50k. Then, a $5k bump every year would be a reward, with maybe a higher bump during promotion years…Pay disparity is a bigger issue than actual pay.”

Well said, Guest and Anon51.

I’ve said it before and I’ll say it again – the Big 4 are constantly in cahoots with one another with regards to hiring benchmarks. So I propose that TBig4PTB get together and reassess their starting salaries. Behold, a template for all Big Wigs to follow:

1. Decrease starting total packages (salary + sign on) by seven percent. Lower the bar from the get-go.

2. Now is the time – blame the decrease on “a firm wide strategic response to the economic risks of being a major player in the professional services industry. Unofficial response – did you see the DOW sink like the Titanic the other day?!”

3. Spread gap created by initial decrease in salary over the next two years. This will create an artificial sense of accomplishment and praise.

4. Send internal emails stressing the “increase in raises for well deserving employees.” Everyone cheers.

5. In three years college graduates will not know the difference; this “decrease” becomes a non-issue.

Guest’s comment that “pay disparity is a bigger issue than actual pay” can become a non-issue with very little effort. Is this fair or ethical? Mehhhhh. I personally think it would be a slap in the face to those of you who have busted your humps and sacrificed career and personal opportunities all in the name of KPDeloitterhouseErnstMG. But it certainly wouldn’t be the most desperate attempt made by one of the firms in recent memory.

Raising morale – hardly. What are your thoughts?

7 thoughts on “How Much Should Public Accounting Starting Salaries Be to Make Public Accounting Starting Salaries Less Awful?”

  1. 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.

    1. 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.

  2. 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!

    1. 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 🙂

  3. 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 …

  4. 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.

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