New accountants see the money

As firms and corporate finance teams compete to hire the best accounting talent and keep up with unprecedented demand, the 2022 Compensation & Benefits Survey reveals CPA firms are increasing newer accountants’ salaries and support for aspiring CPAs and exploring other solutions like offshoring and outsourcing.

In addition, the data showed little variance in salary for non-managing accountants working in corporate finance, government or nonprofit compared to public accounting.

The VSCPA conducted the biennial compensation and benefits survey to CPAs in Virginia in November and December 2022 in partnership with Whorton Marketing & Research. Findings included the mean and median salaries at all levels of employment, including breakdowns by geographic region, and investigated other issues related to benefits like paid leave and insurance. Other questions touched on remote work, outsourcing and offshoring solutions, and turnover. 

“The results are clear — firms are doing everything in their power to attract talent and explore innovative solutions to reduce employee stress,” said VSCPA President & CEO Stephanie R. Peters, CAE. 

“We’ve heard from leaders since the pandemic began that firm capacity challenges are their biggest concern, and the survey shows they are increasing base salaries and offering more benefits — even at the expense of partner salary increases.”

Respondents included 84 public firms, 17 sole practitioners, 133 accountants in corporate finance and industry, and 48 working in government and nonprofit. While a vast majority of firm respondents conduct tax services (95%), outsourced accounting or bookkeeping came in at 52%, audit at 45%, and consulting services 42%.

Overall, firms are not losing staff in frightening quantities. They report losing 5.2 staff and hiring 7.0, resulting in slight growth and a mean 12% staff turnover.

Key compensation findings

It’s a great time to be an accountant looking for an entry-level position. To attract more talent to the profession, firms now offer a mean salary of $59,022 — a 15.5% increase over 2020. Salaries increase from there, with first-level supervisors at a mean salary of $84,645 (a 12.7% growth) and senior managers at $118,635 (13.9% growth).

Partners report a mean of $211,733 — only a 0.5% increase, indicating that firm leaders are choosing to invest in the future of their companies by offering competitive salaries to younger staff at their own salary expense.

Unsurprisingly, several respondents commented that their firm increased its overall fees to cover higher wages and account for inflation. And as one respondent said, “Hiring new employees costs more; we don’t want employees to be poached away by other organizations because pay is uncompetitive.”

Support positions in CPA firms also saw large salary increases. Most notably, the finance and IT positions saw growth of 34.5% and 21.8%, respectively, with HR at 12.5%.

Salaries are similar for accountants working in the private sector. In corporate finance, accountants, managers and executives earned a mean salary of $74,349, $102,466, and $183,839, respectively. Those same positions earn a mean of $66,000, $105,180, and $188,423 in government/nonprofit.

Raises increased for everyone on the whole since the 2020 results. The average raise percentage was a mean of 4% between October 2019 and 2020, and firms now report a 7.6% mean raise in 2021–2022. (They anticipate 6.6% for 2022–2023.)

Staff who work in specialty areas do earn more than generalists, and CPAs earn a mean of 17% more than non-CPAs.

Key benefits findings

The majority of CPA firms are offering flexible work hours, with a full 71% employing flexibility year-round. Accountants in corporate and government/nonprofit settings have even more flexibility, with 95% of industry and 100% of government/nonprofit offering some type of flexible hours.

Despite firms stepping up compensation to attract young employees, the percentage offering medical insurance for employees dropped 5% from 76 to 71 — while insurance coverage for dependents/family grew 7% to 67. Corporate and government/nonprofit employers are more likely to offer medical insurance (88% and 77%, respectively).

Other firm benefits include matching contributions for retirement programs (79%), professional membership dues (71%), professional license/credential reimbursement, and bonuses for passing the CPA Exam. Among corporate and government/nonprofit employers, the most common are also matching retirement contributions, membership dues, and professional credential reimbursement.

Fitting with the profession’s national focus on attracting more talent to accounting, the number of public firms offering professional license/credential support increased by 12 percentage points over 2020, and tuition assistance increased 11 points.

Creative solutions

While the majority CPA firms are not yet outsourcing or offshoring to combat capacity challenges, the practices are in use — and growing. While 64% of CPA firms have never tried outsourcing and have no plans to, 18% are doing it and another 16% are exploring the approach. Those numbers increase when it comes to offshoring, with 20% of CPA firms already employing international help and 17% considering. 

Corporate finance teams, governments and nonprofits report very minimal outsourcing and offshoring (only 5% of industry and 11% of government/nonprofit are outsourcing).

What’s in the full report?

• An executive summary.
• Detailed compensation for each position level by geographic location, including salary, raises and bonuses.
• Information broken down by firm size: small (1–5 staff), medium (6–15) and large (more than 15 full-time employees).
• Demographic information on firms, including diversity programs and other recruitment and retention activities.
• Much more! 

All firms that participated in the survey will get the full report. Non-participants can purchase the survey results ($199 for members/$249 for nonmembers). Call the VSCPA at (800) 733-8272 to purchase.