The Big 4 vs. Private Sector – Shoulda, Coulda, Woulda?
MoanDay Tuesday, everyone.
Last week’s post about Big 4 firms lowering the bar on starting salaries in order to project artificial pay raises was well discussed in the comments section. Thank you to everyone who commented, as that’s what makes this online community vocally vibrant and a joy to be a part of.
Part of the conversation included a debate about whether it is better to begin a career in accounting with a Big 4 firm or in the private sector; two very different career paths. The question is a legitimate case of shoulda coulda woulda. The following are a few comments from the peanut gallery:
• Guest said, “Even though I was offered $55k + $5k bonus out of college for a Big 4, I was VERY close to not accepting the offer and instead going with a private firm that was $60k starting and normal hours. The only reason I went to the Big 4 was because I fell for the trap of ‘the name recognition.’ If I could go back in time, I would have chosen the private firm.”
• Another Guest crunched the numbers, “In a Big 4, you’re overworked about 20-25% more than the private sector (if not, then more). Say a Big 4 offers you $55k starting. Your “REAL” salary relative to your peers would in fact be $55,000 / 1.25 = $44k. If you lower it to $50k for a first year, that equates to a real salary of $40k.”
• Finally, 2nd Year Associate chimed in with, “Plenty of my college pals are making upwards of $10k more than I am a year and they don’t even have their CPAs. I joined public accounting to get ahead over the next 5 to 10 years but if my pay was any less I’d have skipped this route completely.”
I think it all depends on where your career is at. If you graduated in 2007 or 2008, you might be less thrilled to be on the public accounting career. The double digit percentage raises for everyone on the team that were fiercely promoted by the Big 4 campus recruiting machines have yet to materialize for you, and now you find yourself lumped into the “just happy to have a job” group. Your classmates that went the private route have been cruising on decent pay and 45 hour work weeks. Nothing good to see here; move along.
If you’re 4-8 years into your career, you’re obviously in a different place. You’ve experienced the 15% raise, climbed the corporate shuffleboard to senior staff or manager, and utilize the phrase, “when I first started here…” all too often. You’ve earned your stripes after a number of busy seasons; your desire for a new job is to be better respected by your superiors. Pay isn’t everything, but it’s important.
Throughout all of this, you’ve benefited from the resources of working at a large firm (no, I’m not talking about free dinners). The training programs have been extensive, your CPA license is paid for, and you’ve been enjoying as much of your five weeks of vacation as the firm allowed you to take. And what about having the name on your resume? Having a pedigree firm on your resume can oftentimes land you the interview; earning the pay day is up to you.
So why did you enter into public accounting? Was it because the Big 4 had a strong presence on your campus? Were private companies not offering enough? Would you change anything about your career path to this point? Leave your thoughts below.