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Then you should have been an investment banker
The question you’re all getting down to is, “Why don’t the firms pay us more?”. I’m going to try to provide a really solid answer to that question. Ready? Here it is: They don’t have to. That’s really it. Why don’t they have to? Because you’re still here. Or to say it differently, your pay is clearly good enough to justify you sticking around. If it wasn’t, you would quit. If people are generally staying and not quitting (to the point that there is sufficient retention to meet staffing needs), then mission accomplished in the firms eyes. What added benefit would the firm get by paying you more? You being “happier”? You complaining less? News flash: the firm doesn’t exist to provide you with happiness, and they’re ok with the current level of complaining. This is a business, and the people running it are focused on the bottom line. As they should be. That’s how businesses work. And no, I’m not a partner. I’m a Senior 2 if you must know
PwC 3 - in that case, the firm probably will bend.
Again, you have to look at the overall economics of the types of firms you’re comparing big 4 to. Yes “Big” law firms (a small small fraction of the entry level positions out there) start their associates around 150k but you’re talking about firms where the average pay per partner is well over 2m. The average. Small firms with better economics and significantly lower overhead pay their people better, that shouldn’t be surprising.
Agreed EY9. I’ve worked for big, regional, and local firms, the Big 4 generally doesn’t dictate the pricing of our services, the marketplace does. From there, take a look at that MAP study to see what firms of all sizes do in economic terms. Additionally as an example: State of Texas has about about 54,000 CPAs. A smaller % of that is employed by the big 4 than is generally assumed.
We shouldn’t compare ourselves to investment banking, those jobs are very few to begin with, that’s what makes them competitive.
When? Oh boy 😂
Seniors - Manager are grossly underpaid. A Supervisor with CPA and over six years experience should be making at least 90K. I know many who aren't even scratching 80K.
There's not many places where the starting is as good as PA. In the end they overcorrect and want you to be thankful you even have a job after you start.
So by OP’s logic, when busy season rolls around, instead of 80 hour workweeks, we should expect 160 hr work weeks. That gives each employee 8 hrs a week for sleep. Love this logic. I wonder if they are actually a SM or just say they are on linkedin
Staff 1 not worth much lol
Ey14. Getting a mba from university of Phoenix should not mean you get paid more than me. Sliding scale is bs.
The other part that I love about OP's amazing theory is that our default revenue is based on rate per hour -- ie, each client-facing person is charging time. If we have fewer people charging time, we would need to raise rate to equalize the revenue. Or have less revenue? One thing I hear our clients say all the time is that our rates are too low.
^Get real. We rarely are reimbursed based on actual rates and hours. Most audit and tax jobs are a fixed fee. This is why accrual rates of our time are so set so low.
i always wondered why audit fees increase every year while staff salary for each level remains the same year after year. what happened to inflation?
Fees are based on competition for audit services. And compensation is based on competition for labor. Sometimes those go in same direction. Sometimes they do not.
Staff salary isn’t the same year after year? Lol
EY16 not sure how that equation works at the partner level lol. Their hourly rate should always be great.
As a SM, it makes me sad a SM is this delusional and out of touch with reality.
That would be a start. Must be certified before you can practice. But still need to bring down the supply. You looking at 3 years post-degree or more like 8? We would then require a residency where we work people 120 hours a week for minimum wage.
EY 10 calling him a Berner is ridiculous. Wanting a market rate wage for your work doesn't make you a socialist especially when the Big 4 has preferential treatment for hiring from schools and has a oligopoly over public company audits (therefore F500 positions are routinely staffed by B4 alumni). Those who are hired showed bias and favoritism to staffing other Big 4 employees the cycle continues.
I am willing to postulate and wager if it was still the Big 8, pay would be A LOT better. Better competition is sorely needed in this industry.
Honestly CPAs in non major metros do well. Major metros you don't be able to afford an apartment until you're manager which is absurd.
We ain't MDs 🤦♂️