Compensation and Experience

Software. Marketing. Training. Running your business.
#1
Posts:
17
Joined:
28-Oct-2020 7:51pm
Location:
California
Hello to all,

I have a question regarding my current level of experience and compensation. A bit of background, I was hired during the pandemic in mid 2020 and compensation was lower based on Salary guides at AICPA and RH company. However, now the compensation rate has increased and so has my experience and certification as a CPA. This creates a dilemma. According to AICPA and RH I should be making 19k more than my current salary.

The question is, because I was hired during an unusual time and at a low compensation level, and now industry compensation is higher on average, how would you suggest going about renegotiating? Keep in mind, this is not greed-driven, it's simply about compensation comparable to my industry and location as well as experience.

Best regards
TaxNewbie
CPA 2 years experience
 

#2
Posts:
844
Joined:
1-Sep-2020 2:47pm
Location:
845-NY
Always keep pushing the raises, or else you get left behind. It might take leaving your job to get the money you are worth.

Keep in mind that those salary guides are a baseline. Sometimes your salary will be higher or lower, and often the guides don't include bonuses etc.

In order to apply these numbers to your situation, you should come prepared, including how much they currently after able to bill out for you, both on an hourly basis, as well as how much you produce the firm. It also helps if you are bringing in new clients to help firm growth, and not just working on their client base. If you are able to determine overhead rates, that will help you make your case in how much they are making off of you.

How many people are at your firm, and how easily could you jump ship in your market if you needed to? 2 years experience likely means you are still learning a lot and need a reasonable amount of hand holding and guidance unless you are working on simple returns.

Step 1 gather your research and numbers.
Step 2 ask for your yearly review, or ask for a raise and outline what you've said here.

That is a very large gap and you should be prepared to leave if they won't get you closer to market rate.
 

#3
Posts:
737
Joined:
28-May-2014 12:04pm
Location:
Arkansas
Make sure you are thinking about your market.

For example I’m in Arkansas where I would expect our numbers to be well below the national average. But our area of the state is booming so it’s much better than our neighboring cities.
 

#4
Posts:
10
Joined:
25-Jul-2021 10:27am
Location:
IA
For starters, pretty know that the RH guide is usually high. As they have a vested interest in getting employees to jump ship (usually due to perception of being underpaid). However, in my experience, sometimes their guide is high and sometimes on target (like now, with the large changes in the employment market I've seen over the past year). If you go on indeed and look at comparable jobs in your area, what are they paying (what RH says, less or more), as that will give you a better market rate.

That all said, I would be curious as to what you are currently paid, as outside of some of the big 4 this year, I've not hear many people getting raises over 10%, and for most lower level staff, a 19k raise would be 20%+.

As far getting a raise, for starters, are you happy at your current employer? And are there any benefits that you aren't taking into account that you may have to give up if you do change (short commute, a true 40 hr work week, great benefits, etc)? As if you don't want to play hardball (with the potential for actual jumping ship, you are somewhat limited, as in you can present your case, but take what they give you). When I've had to make my case as an employee, I've usually done two things:

1. Pointed out where the market is, to the point of potentially having proof of other jobs with the salary you desire printed out. If your employer has posted other job ads with the salary listed and it is higher, that can be used as well.

2. Made the case based upon what you have done for your employer for the year, such as had great realization, billed XX, brought in clients paying Y, worked 2500 hours (When the stated goal is 2200 or something), etc. And some of these you have to work around (or just toot your own horn) if there is some sort of bonus program as well.
 

#5
novacpa  
Posts:
1233
Joined:
28-Apr-2014 1:16pm
Location:
McLean, Virginia 22101
Respond to other firms advertising for CPAs, interview - get firms offers in hand, before making demands.
If your demands are ignored or met with arrogance (you're lucking to be working here), resign and move on.
 

#6
Posts:
17
Joined:
28-Oct-2020 7:51pm
Location:
California
recked CPAEA

Thank you for your feedback! Can you clarify on the following points

1. How would I go about finding how much they build for my time?
2. How to go about determining their overhead rate?
3. Yes I still need guidance when working on new areas but prepare medium level returns find on my own
4. Is'nt it aggressive to go in with overhead numbers? it seems like snooping
5. Any tips on how to present that question in a non threatening way?
 

#7
Posts:
17
Joined:
28-Oct-2020 7:51pm
Location:
California
thank you to all who took the time to give me advice. It's invaluable and am taking notes.

I have a career goal question but I'm going to start another topic to keep things organized.
 

#8
smtcpa  
Posts:
522
Joined:
28-Jul-2014 5:16am
Location:
Richmond, VA
I disagree with the advice to go in with overhead rates, and it might even be aggressive to go in with what you bill for the firm. The only thing that matters is your market value. What they bill you at and their overhead rates won't mean a thing if they bill too low and can't manage their overhead. Again, only your market value is important here. Research it and use other sources than RH which I always found unreasonable.

I suggest requesting a meeting and asking them for a roadmap as to what you can expect for the progression of your role in the firm, responsibilities (value) salary increases, and what it will take to get to a fair compensation rate. They might have measurements as to your productivity they haven't shared. The important thing is to open up a professional conversation with them. My biggest gripe as an employer is when staff don't communicate and then just leave, instead of talking through things and coming up with an equitable solution.

TaxNewbie wrote:recked CPAEA

Thank you for your feedback! Can you clarify on the following points

1. How would I go about finding how much they build for my time?
2. How to go about determining their overhead rate?
3. Yes I still need guidance when working on new areas but prepare medium level returns find on my own
4. Is'nt it aggressive to go in with overhead numbers? it seems like snooping
5. Any tips on how to present that question in a non threatening way?
 


Return to Business Operations and Development



Who is online

Users browsing this forum: cpambt22, ItDepends, MilesR and 28 guests