Starting salaries have lagged behind those of neighboring professions and industries, and accounting firms should be concerned enough to raise starting salaries, Accounting Today concluded after it and parent company Arizent conducted their inaugural salary survey in May 2024.

College students are able to graduate into higher-paying jobs in finance or technology with the same level of education or less than is required for accountants. With fewer college students studying accounting, fewer graduates completing 150 credit hours, fewer accountants achieving CPA licensure, and even fewer staying in the profession until they make partner, the labor shortage is continuing, Accounting Today reported. 

Collecting over 560 responses from accountants from firms of all sizes regarding their salaries, benefits and career trajectories, the survey found that the median base salary for a staff accountant nationwide is $65,000. For comparison, in Pennsylvania, entry-level CPAs earn a median of $68,000, compared to entry-level finance consultants at $71,000, management consultants at $87,000, and supply chain managers at $91,000, according to a recent talent retention report by the Pennsylvania Institute of CPAs. In addition, graduates who majored in engineering, computer science and math are all expected to earn starting salaries above $70,000, according to nationwide projections from the National Association of Colleges and Employees ($76,736, $74,778 and $71,076 respectively).

"There's a mindset that this is an apprentice business. There's a huge investment that firms make in people in the early years and as they get skilled they earn more," said Jennifer Wilson, partner and co-founder at ConvergenceCoaching, in explaining why firms are slow to increase salaries. "But that model is a mindset that's no longer valid because most young people out of school expect that they're going to have big investment by their employers, regardless of their chosen profession, and they're not willing to pay dues by making less and learning more. They're figuring, 'I'm going to get that anywhere.'"

Younger generations no longer believe in staying in one company or one industry, various studies and reporting have found. Forty-seven percent of respondents to the Accounting Today's survey said that it takes between 10 and 20 years to make partner at their firm. "That idea of delayed gratification is an old-fashioned idea, and it still lives inside our profession," said Wilson.

Another contributor to low salaries is the interests of aging partners nearing retirement, said Wilson. "The average partner comp has continued to increase over time when starting salaries have not, and that is a lack of redistribution of that wealth. I would say it's because partners feel like, 'I paid my dues and I deserve this.'"

"Look out for yourself,” said one survey respondent, a chief operating officer at a midsized firm. “Partners are greedy. Public accounting is a giant pyramid scheme."

An individual's number of years of experience does not have an appreciable impact on aggregate salary ranges for each job level, the survey data revealed. "Tenure means nothing anymore," said Sandra Wiley, shareholder and president at Boomer Consulting. "The number of years you've been sitting in the seat at whatever firm you're at has a lot less to do with your salary than what you bring to the table, how fast you learn it, and how fast you apply it."

Among the consequences for young accountants is a poor work-life balance and low salaries.  The potential payoff of raises and promotions in the future may not be enough of a tradeoff when one works 80 hours a week during tax season now.

"You're going to wish you were paid hourly during busy season," said one senior tax associate at a large firm. "I wish I knew that public accounting firms don't value their employees the way that they say they do,” said a tax accountant at a midsized firm. “What is said and what is done does not match … low pay, long hours, grueling work, no internal onboarding or training to support staff. It's a sink-or-swim mentality."

But firms can mitigate these necessities of accounting life with strategies such as carefully considering the services they're offering, whom they're offering them to, and how they're delivering them, said Lisa Simpson, vice chair of firm services at the AICPA. "We can control that tax season by managing our client load, by managing our client expectations, and putting in processes and key metrics and keep the workflow moving throughout the year, rather than just in these crunch periods, April 15 and October 15."

Three-quarters of the respondents know what qualifications they need to be promoted. Roughly one-third of staff, seniors and managers say they feel the need to jump to another job in order to make a meaningful increase in salary.

"If making as much money as possible is the goal, be prepared to jump firms every few years," said a tax manager at a small firm. "Many firms do not reward long-term loyalty with appropriate salary increases after two to three years."

It's an employees' market now, Wiley told Accounting Today. "Senior leadership has figured out, 'If you don't give me what I want here, I can go tomorrow and find the job that I want out there.'"

Higher starting salaries are key to making the accounting profession more attractive to young people, but the solution is complicated. It starts with salary transparency for both lower-level employees and partners. Then the next step is raising starting salaries. In addition, the time it takes to make partner will also need to shorten, said Wiley, and firms will have to start teaching and training differently.

Another factor is culture, which “is greater than salary," said a manager at a large firm. "I could jump somewhere for maybe $10,000 to $20,000 more, but I do not think I can replicate the culture of my firm. A lot of people I talk with have moved jobs for more money and almost immediately regretted it due to the work environment. I would rather take a steady, reasonable paycheck, with job security and ethical bosses, than move to a higher paying job where I'm constantly fearing retaliation or being fired."

Wilson uses the word “stewardship” to describe how the profession needs to raise starting salaries to attract young talent, be transparent about their earning potential in each role, and meet their demands in order to retain that talent.

"'I should be a steward of my firm and careful to make sure that I am investing in it as much as I am taking out of it,'” she said. “I do think sometimes we lose sight of our stewardship."