Increasing starting salaries is the key to recruiting and retaining more young people to the profession — but the first step is boosting salary transparency.
Accounting starting salaries have lagged behind those of neighboring professions and industries, and with the ongoing labor shortage, firms have no time to waste in making the profession more attractive. With that in mind, Accounting Today and its parent company Arizent conducted our first inaugural salary survey, collecting over 560 responses in May 2024 from accountants from firms of all sizes regarding their salaries, benefits and career trajectories.
"I wish I knew what I was worth and how to determine it," one respondent, an audit manager at a midsized firm, said. "I would say entry level is a different story as you are getting your foot in the door and exploring, but once you have experience it's hard to know what your worth is without asking around at other firms. Not many people are open about their salaries, so that makes it hard to see if you are being underpaid and undervalued or in a proper range."
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Another respondent, a senior manager at a midsized firm, said: "At every firm I have worked, the partners always allude to how much you can make as a partner, but they never actually tell you how much that is and the path to partner is never clearly defined."
Salary transparency is essential to telling a clear message of accountants' earning potential. In the traditional business model, low starting salaries were accepted because young accountants expected to make it up once they made partner.
"We don't make it clear how great the money is, and there are a lot of partners in this country making very good money," said Jennifer Wilson, partner and cofounder at ConvergenceCoaching. "There's nothing to be ashamed of from that and it should be clear to middle schoolers, high schoolers, college students and early-career people that you can take a lot of paths in this profession and make really good money."
But young accountants, especially those who are members of Generation Z (younger than age 28), may no longer be willing to stick at a firm at a lower starting salary on the promise of greater compensation down the line. According to the survey data, 47% of respondents said it takes between 10 and 20 years to make partner at their firm.
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"Given the demographic tendencies of the people entering the workforce now, they're not in a position where they feel like they can defer those big earnings that far out into their career," Lisa Simpson, vice chair of firm services at the American Institute of CPAs, said.
Promoting open conversation surrounding salary can be a fine line to walk, but doing so can enable accountants to make better informed decisions on their career moves and encourage them to stay in the profession until they reach the partner level.
"That's a really delicate balance, I get that," Simpson said. "But can we give bands? Can we give ranges? Can we give averages over the last three years? What kind of information can we provide that gives some of that transparency that they're looking for?"
