What Accounting Firms Need to Know About Updating Salaries and Giving Raises

Regular salary review

If you can’t remember the last time you reviewed your employees’ compensation, it’s been too long. Your staff members know what they’re worth and what the local job market is paying, and so should you. At least once a year, benchmark your firm’s salaries and benefits against what other firms and companies — i.e., your competition for top performers — offer.

Fortunately, there are a number of helpful tools available. The Salary Guide from Robert Half is an excellent resource, and you can use our Salary Calculator to localize the salary ranges. Other valuable research includes the U.S. Bureau of Labor Statistics’ Occupational Outlook Handbook and reports from industry associations.

If after reviewing these tools you find your superstars’ salaries are near the low end, raises are likely in order — and soon.

Attractive raises

Professionals moving from one company to another often receive significant salary jumps today. Rest assured, your employees know this, so you’ll need to proactively reward them to entice them to stay on at your firm.

The situation is especially challenging in accounting, where demand and talent shortages are combining to drive up compensation. Unemployment for accountants and auditors remains below the national average, while salary growth is outpacing inflation and cost-of-living adjustments.

If you can’t afford across-the-board raises, focus on your most talented and hardest-to-replace employees. Bump up their salaries until they’re in the higher end of the spectrum. It’s no longer enough to just be competitive with compensation.

Alternatives to higher salaries

Whether or not you can offer top salaries, there are steps your firm can — and should — take to hang on to your brightest stars, including:

• Show a commitment to internal progression. Recent research by Accountemps shows promotions are the number-one strategy for talent retention, a tactic used by 63 percent of executives surveyed. Your firm’s succession planning probably already calls for developing and promoting the best talent, and employees will be enthusiastic if they know such opportunities are available. During annual reviews, include a discussion of in-house career paths.
• Be proactive in assessing staff satisfaction. The best way to find out whether your workers are happy is to ask them. For instance, try stay interviews, which are like exit interviews — but before an employee has resigned. You can also conduct surveys (giving respondents the option to remain anonymous), as well as regular one-on-one check-ins. Let workers know you have an open-door policy and care about their professional trajectory.
• Use time as an employee perk. Flexible working is one of the most cost-effective ways of rewarding staff. By allowing people to telecommute, work flexible hours, earn additional paid time off or switch to a four-day workweek, you make it easier for them to balance their professional and personal commitments. Such latitude is always welcome and often still has a monetary value for staff — by reducing childcare and transportation costs, for example.

There is stiff competition for talented accountants, with public accounting firms and businesses vying for the same small pool of in-demand professionals. Don’t take chances that your best auditors and tax accountants will stay when their wages are subpar.

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Paul McDonald is senior executive director with Robert Half, the world’s first and largest specialized staffing firm. Over the course of his 30-year career with the company, he has spoken extensively on employment and management issues based on his work with thousands of companies and job seekers.