Wages offered to U.S. accountants and chartered accountants over the past year have not risen at the fastest pace in recent years, but industry watchers say the increase in wages alone may not be enough to address a nationwide shortage of accountants.
Fewer people are pursuing an accounting degree and starting new jobs in the field, leading to more open positions for related roles and longer searches. Accounting and auditing jobs have long been viewed by professionals as underpaid, undervalued, and less dynamic than positions in technology, investment banking, and private equity.
In addition to raising salaries and offering sign-on bonuses, companies are turning to a number of other avenues to address the growing shortage of accountants, including by relying more on temping and international transportation. In addition, industry groups and companies are courting college students, giving new entrants and younger accountants more responsibilities than ever before, and offering flexible work arrangements to new hires.
“It doesn’t get paid enough for what we do, the amount of work we put into it, and as critical as we are to the overall health of financial markets,” said Dane Dowell, an accounting and auditing consultant.
That could start to change as companies appear to be increasing their offerings, likely due to both wage inflation and the profession working to attract more talent to its ranks, accountants, academics and consultants said. On average, starting salaries offered by U.S. accountants and chartered accountants for entry-level positions increased 13% to nearly $61,000 in 2022 year over year, compared to increases of 4% in 2021 and 2% in 2020, according to one Review of job postings from Revelio Labs Inc., a workplace data provider. Starting salaries rose 21% to nearly $67,000 this year through February compared to prior-year periods.
Pay at five seniority levels, from entry level to vice president, has also increased. Those median salaries rose 12% to nearly $87,000 in 2022 and 9% to nearly $90,000 this year through February compared to previous periods, data from Revelio Labs showed. Entry-level employees hold positions such as accountant, accountant and financial auditor, while vice president-level workers hold positions such as chief audit officer, chief accountant and financial director, Revelio said. Accountants and CPAs at Big Four accounting firms and Fortune 200 companies, particularly in major cities, are typically paid at the higher end of the salary range.
“We haven’t kept up with what’s happening with other professions, and we’ve certainly had our eyes opened during the pandemic,” said Sue Coffey, chief executive of public accounting at the Association of International Certified Professional Accountants, a professional organization, and related focused on the technology industry and some financial niches with higher starting salaries.
Many companies have increased salaries several times throughout the year over the past year or two, among other changes in compensation, she said. “Could we pay more? Yes, probably. But I know that companies do all sorts of things, like B. Sign-up bonuses,” Ms. Coffey said.
At the University of Northern Iowa, accounting graduates are given more opportunities and choices in entry-level professional services positions than in previous years, such as advising on mergers and acquisitions, said Joseph Ugrin, chief of accounting at the school. A master’s candidate was offered a starting salary of $99,000 at the Denver office of a Big Four firm, a figure previously unknown, he said.
Young professionals also take on more responsibility in these roles, said Mr. Ugrin. “When I started, I couldn’t have imagined taking on so much responsibility for five or 10 years,” he said. “It’s just a sign of lack that you need bodies to work.”
According to a survey by Handshake, a platform for professionals, released in February, 80 percent of college-educated job seekers say a high starting salary makes them more likely to apply for a job, compared to 85 percent for job stability and 81 percent for benefits Networking and recruiting graduates. The survey found that respondents ranked at least $82,000 as a high starting salary.
The Center for Audit Quality, one of several professional organizations stepping up its outreach, launched an effort last year to raise awareness of accounting opportunities among high school students. The talent shortage in the accounting industry is a multifaceted problem, said Liz Barentzen, vice president of operations and talent initiatives at CAQ.
“While raises should help increase the attractiveness of available talent, we know that more needs to be done at earlier stages, years before young graduates are ready to consider job offers,” Ms. Barentzen said.
Some professionals say recent salary increases are not enough to strengthen the ranks of new entrants. The profession also presents a key barrier to entry — 150 college credit hours are required to become a certified public accountant, which is essentially the cost of a fifth year of high school.
promotion of the profession
To generate enthusiasm for the profession, companies, recruiters and professional organizations need to show accounting graduates that the work has a significant technological focus, sometimes involving blockchains, artificial intelligence and robotics, said Jim Brady, a former senior talent at Deloitte & Touche Officer and Chief Operating Officer at Grant Thornton. Automation can both enrich certain accounting and auditing roles and reduce the need for other roles to address the shortage, he said.
“I just don’t think tons of 25% pay increases across the board are going to reverse what has built up over the past two decades,” said Mr. Brady, who serves as chief executive of a talent services arm of alliantgroup, a tax consulting firm . “We can’t just buy our way out of getting more people into the CPA profession.”
Ginnie Carlier, Ernst & Young’s head of talent, said in a February post that EY values job candidates with an “adventurous mentality”. EY said its entry-level audit and tax pay has increased by an average of 23% since 2020. PricewaterhouseCoopers and Deloitte did not respond to requests for comment. Deloitte is a sponsor of the CFO Journal.
Still, attractive and competitive compensation is an important way for the industry to move up its ranks. KPMG has said it provided its largest pay rise in U.S. corporate history in 2021, an undisclosed “double-digit percentage,” and then in early 2022 said it would provide an additional $160 million in pay increases for its 35,000 employees in issues to the United States.
KPMG’s future salary plans will continue to be driven by talent demand, said Becky Sproul, KPMG’s US Talent and Culture Leader for Audit. “If things continue as they are today, then yes, we will continue to raise salaries in response to that,” Ms Sproul said.
Accounting firm Forvis LLP has focused on offering salaries needed to sustain its growth plans, chief executive Tom Watson said. Forvis, formed last June from a merger of BKD LLP and Dixon Hughes Goodman LLP, has grown by more than 500 employees since the transaction closed, taking its total number of partners and employees to over 5,700, he said.
“Salaries move and are driven by market demands,” said Mr. Watson, adding that as part of their hiring strategies, companies also need the right culture and advancement opportunities. “Every year we work to set salaries that will get us the number of people our profession needs, and if they’re too low, you have to raise them.”
Write to Mark Maurer at email@example.com
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