The Red Carpet Treatment

Employers are offering generous compensation and progressive benefits to entice—and keep—top accounting talent in today’s tight labor market.
BY ROBERT HALF INTERNATIONAL

  

 
 

 

EXECUTIVE SUMMARY

Statistics show strong job prospects for CPAs are likely to continue well into the next decade. The U.S. Department of Labor’s Bureau of Labor Statistics (BLS) anticipates employment for accountants and auditors to grow by at least 22% between 2004 and 2014.

Sarbanes-Oxley compliance, corporate governance regulations, and an overall desire to serve clients better is prompting many publicly traded companies to increase the size of their accounting departments—adding positions that did not exist five years ago.

Starting salaries for positions in public and corporate accounting are expected to see bigger increases than the overall national average of 3.8% for all industries—particularly at the senior level. Employers are also focusing on improving popular benefits such as training and education, health plans and flexible scheduling.

Robert Half International is the parent company of Robert Half Finance & Accounting, Accountemps and Robert Half Management Resources.

ndividuals with solid accounting and finance skills and experience are in great demand but short supply. It is clear that the current market favors job seekers, especially in the accounting profession. More than 50% of 1,000 hiring managers said they faced a shortage of qualified workers, making recruiting a year-round necessity, according to the Robert Half and Careerbuilder.com Employment Dynamics and Growth Expectations (EDGE) Report. As a result, many companies are rolling out the red carpet to attract the best and brightest, offering signing and performance bonuses, premium compensation, and in some instances, accelerated salary reviews.

In its 2005 report, Supply of Accounting Graduates and the Demand for Public Accounting Recruits, the AICPA estimated future hiring by public accounting firms of every size to remain high through 2009. The U.S. Department of Labor’s Bureau of Labor Statistics (BLS) supports these findings with an anticipated growth of at least 22% in employment for accountants and auditors between 2004 and 2014. This outpaces the engineering and law sectors, which are expected to grow an average of only 13%, but compares closely to the medical profession.

 

How Smaller CPA Firms Can Compete for Top Talent
CPA firms with fewer resources and less recognizable brand names face challenges competing for talent. How can smaller firms make themselves more appealing to prospective recruits?

Tout the Advantages of Your Work Environment
Emphasize the following on Web sites, at job fairs and during interviews:

  • “Family-like” atmosphere. Organizations that place a high value on camaraderie, collaboration and open-door communication can be very attractive to job candidates.
  • Advancement opportunities. Accountants in smaller firms have more visibility and are typically allowed to take on more responsibilities and make key decisions earlier in their careers than those at larger firms.
  • Little or no travel. Employees who don’t want to spend a lot of time on the road are often drawn to smaller firms where the need to travel long distances between offices or clients is limited.

COMPLIANCE REQUIREMENTS, BUSINESS EXPANSION
The variety and complexity of business changes in recent years present challenges and opportunities for accounting professionals. Sarbanes-Oxley compliance, corporate governance regulations and an overall desire to serve clients better are prompting many publicly traded companies to increase the size of their accounting departments—adding positions that did not exist five years ago. Businesses entering their third year of SOX compliance are focused on managing financial reporting activities, internal controls and audits, and financial systems and processes. An increased focus on preventing and detecting corporate fraud is also driving the demand for CPAs and forensic accountants.

Mergers and acquisitions are on the rise; expansion activities are widespread. Experienced accountants and auditors oversee the integration of accounting processes following a merger, advise on financial risk in international markets, and collaborate with IT departments on vital projects such as internal control automation. All these activities are driving up demand for qualified CPAs.

RISING SALARIES
The upward trend in pay for accountants is confirmed by data gathered for the 2007 Salary Guide, which represents all three Robert Half financial divisions (Accountemps, Robert Half Finance & Accounting and Robert Half Management Resources). A national average increase in base compensation of 3.8% has been projected for this year, although a wide range of positions in public and corporate accounting are expected to see bigger increases in starting salaries—particularly at the senior level. In a survey of 1,000 hiring managers, 21% said the inability to offer competitive compensation was a key obstacle to hiring qualified workers (see Exhibit 1).

  Obstacles to Hiring Qualified Workers

Senior managers and directors of large public accounting firms (more than $250 million in sales) expected to see national average starting salaries between $92,000 and $141,000, an increase of 8.1% over 2006 levels. Similarly, those at medium ($25 million to $250 million in sales) and small firms (up to $25 million in sales) could see gains of more than 7% in base pay. Other positions in public accounting are predicted to grow 4% to 5%.

Within corporate accounting, compliance executives are likely to see the biggest gains. The average starting salary for a chief compliance officer at a large company is $132,500 to $181,250—an increase of 14.4% from 2006. Meanwhile, at a medium-size organization, a chief compliance officer would typically earn a base salary between $111,000 and $145,500—a 9.3% increase over last year. Even small businesses are paying significantly more this year for executive talent: A chief compliance officer earns 6.3% more in base salary, or $90,500 to $116,000. Starting salaries in areas such as controller, internal audit, cost accounting, tax, financial analysis, and general accounting could rise by 5% or more.

CREATING VALUE THROUGH CREDENTIALS
Accountants who possess in-demand professional certifications, such as the CPA, an MBA or other pertinent graduate degree, can expect to earn up to 10% more in base salary than those who do not, according to Robert Half’s research.

The Salary Guide predicts the following types of accountants will see the most significant gains in base pay this year:

Public accountants, especially those with the CPA designation.

Compliance specialists with knowledge of SEC regulations.

Internal auditors, especially those who have earned the certified internal auditor (CIA) credential.

Financial analysts, particularly at the senior levels, who can assist companies pursuing new growth initiatives.

For some positions, certain professional certifications and specific types of knowledge are highly desirable and, as demonstrated above, can have a direct and positive impact on starting compensation. The CPA designation remains the most in-demand accreditation for a variety of public and corporate accounting positions. Other desirable credentials include the certified internal auditor (CIA), certified fraud examiner (CFE) and certified information technology professional (CITP).

 

Keeping Current Can Help Firms Overcome Recruitment and Retention Challenges
For today’s up-and-coming professionals, a paycheck isn’t enough. They want to do meaningful work in a stimulating environment. From a talent perspective, technology-savvy young professionals gravitate to firms that invest in the latest technology and provide the necessary resources, such as leading software solutions, to get the job done. For the firm, the return on investment in technology is significant. It helps recruit talent and provides a foundation for a firm to position itself as an employer of choice, as findings from the CCH Young Accounting Professionals Survey prove.

For example, at Birmingham, Ala.-based Lovoy, Summerville & Shelton, recommendations from the young hires led the firm’s shareholders to review new tax and accounting research solutions. The firm ultimately switched to the research tools the firm’s young CPAs recommended, according to Donald Howell, CPA, a shareholder in the firm, which has 13 employees.

Technology can promote a better work/life balance. It allows employees to work remotely and makes work hours more flexible. It enables the firm to implement knowledge management processes to help overcome the staffing challenges looming as the large and experienced baby boomer generation of professionals phases into retirement.

No firm can magically make the pool of eligible recruits larger, but they can understand the impact that investment—or lack of investment—in technology infrastructure can have on recruitment and retention. Infrastructure is not just an added expense; it is an investment in the firm that supports productivity and makes it a place that CPAs want to join and stay.

Survey your own professionals. Find out what’s important to them, how they would grade your infrastructure, and whether it meets their needs and expectations. Most importantly, act on what you learn.

By Bob Dias, vice president of product and segment management of CCH, a Wolters Kluwer business, www.CCHGroup.com. A white paper detailing the CCH Young Accounting Professionals Survey is available at www.CCHGroup.com/JOA .

EXPLORING PROGRESSIVE BENEFITS
In addition to raising base pay for certain positions and offering bonuses, many employers are enhancing compensation packages for accountants with an array of progressive benefits. The perks include on-site daycare services, health-club memberships and stock options. Based on anecdotal information gleaned from regular interviews by Robert Half staffing executives with companies and candidates, popular benefits include:

Training and education. Because certifications are particularly important to the career track of today’s accounting professionals, some employers are reimbursing employees for courses related to earning those credentials. A Robert Half survey found that less than half (46%) of companies today provide reimbursement to employees for relevant continuing education, but this number could grow. Progressive organizations recognize that employees want to keep learning and that training and professional development programs can help motivate and retain workers.

Health benefits. While medical and dental insurance may seem like an expected part of an employee compensation package, the promise of quality and affordable health coverage remains highly valued. In fact, workers surveyed for the EDGE Report cited health insurance as the most important job benefit.

Flexible scheduling. Flexible schedul­ing is one of today’s most desired employment benefits. Many accounting professionals are being offered options such as telecommuting and compressed or flexible workweeks. Generous portions of paid vacation days, as well as time off following particularly stressful times of year, such as tax season, are being provided by some employers.

With firms struggling to add enough staff to keep pace with business growth, it can be a financially rewarding time as well—especially for the most talented practitioners. Those who work to keep their skills current and take advantage of the best opportunities to use their experience will reap the greatest rewards .

 

Top Positions for Salary Growth
According to the Robert Half International 2007 Salary Guide, the following are the top-five high-growth positions for the year:

Internal auditors. Those who possess the certified internal auditor designation are needed to help improve internal controls and meet the compliance mandates of regulations such as the Sarbanes-Oxley Act. The national average starting salary at a large company is expected to climb 5.8% this year, to a range of $77,500 to $101,500.

Compliance executives. Companies are hiring compliance executives with SEC-reporting experience to help them meet ongoing corporate governance requirements. Starting salaries for chief compliance officers at medium-size companies are expected to rise 9.3% to a range of $111,000 to $145,500, and salaries at large companies are predicted to rise 14.4% to between $132,500 and $181,250.

Financial analysts. As firms expand, financial analysts are needed to assist with budgeting and forecasting initiatives and to identify how companies can become more profitable. Base pay is expected to rise 5% for managers with small companies to between $55,750 and $70,000, and 5.6% to between $58,250 and $73,750 at large companies.

Staff accountants. Accountants with at least three years experience, including in public accounting, are sought for projects related to general ledger-account maintenance, financial-statement preparation and budget development. Salaries at large companies are predicted to rise 5% to between $41,250 and $52,500.

External auditors. Public accounting firms are seeking more CPAs with seven years experience to meet rising client demand for audit services. Salaries at small firms are expected to rise 5.2% to between $48,750 and $63,000.

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