Big 4 Transparency founder Dominic Piscopo makes featured appearance on Bloomberg.
By CPA Trendlines
Accounting firms are being forced to rebalance compensation structures—shifting pay and incentives away from entry-level staff and toward managers and reviewers—as artificial intelligence reshapes how work gets done, according to Dominic Piscopo, host of Big 4 Transparency on the CPA Trendlines Streaming Network.
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Piscopo’s full discussion on AI, compensation trends, and the future of accounting talent is available on Bloomberg Tax’s Talking Tax podcast. His ongoing analysis of salary data and workforce trends is featured on the Big 4 Transparency show, streaming on CPA Trendlines.
“Having transparency in those models and being willing to talk about it with people —not just have this very kind of cold process where a number is thrown out—can make all the difference, even if the number is exactly the same,” Piscopo tells Bloomberg Tax reporter Jorja Siemons.
The shift reflects a structural change in the accounting labor model, Piscopo tells Siemons.
AI tools are reducing the need for large numbers of junior staff performing routine tasks, while increasing demand for experienced professionals who can interpret, review, and manage AI-generated outputs. The result is a compression at the bottom of the traditional staffing pyramid and a premium on mid- and senior-level talent.
“We’re essentially seeing the pyramid reshape,” Piscopo says in the interview. “The base—interns and staff—becomes less labor-intensive, while the demand for managers who can review and manage that work increases.”
The Shift and Its Implications
Historically, accounting firms have relied on a leverage model built on large cohorts of junior staff supporting a smaller group of managers and partners. But AI-driven efficiencies are disrupting that equation. Tasks that once required hours of manual effort can now be completed faster and with fewer people, reducing the volume of entry-level work while increasing the importance of oversight.
That shift is already showing up in compensation data.
Piscopo points to new market trends showing disproportionate salary growth at the lower levels in 2024—intern and staff pay rising about 4% year-over-year, compared with roughly 1% to 1.5% for managers and senior managers. But early indicators suggest that trend is reversing as firms adjust to new operational realities.
“What we’re seeing now is a leading indicator that compensation is starting to move back up the chain,” Piscopo says. “Firms are realizing that the bottleneck isn’t execution anymore—it’s review, judgment, and client management.”
The implications extend beyond salary bands. Firms are increasingly rethinking how they attract and retain talent in a market where experienced professionals have more leverage.
Compensation vs. Workload
Piscopo says many firms are lagging in updating compensation structures to reflect current market conditions. That lag can create unintended incentives for employees to leave.
“In some cases, the only way to get paid at the top of the band is to leave and come back or go somewhere else,” he says. “That’s not a sustainable model.”
To address retention challenges, firms—particularly those backed by private equity—are experimenting with new incentive structures. These include equity or phantom equity grants, profit-sharing arrangements, and other long-term compensation mechanisms designed to align employee interests with firm growth.
The approach mirrors compensation strategies long used in the technology sector, where equity participation has proven effective in retaining high-value talent.
At the same time, Piscopo says compensation is only one part of the equation. Workplace expectations are also evolving, particularly at the manager and senior manager levels.
Many professionals are reassessing the trade-off between compensation and workload. With average workweeks at senior levels approaching 50 hours per year, incremental pay increases may no longer justify the additional time demands.
“There’s a point where the marginal utility of more money starts to decline,” Piscopo says. “People begin prioritizing work-life balance and overall lifestyle.”
Technology itself is also becoming a factor in retention decisions. Frequent changes in platforms and tools—often tied to rapid AI adoption—can create instability and frustration, prompting some professionals to seek more consistent environments.
Critical, but Overlooked
Underlying all of these trends is a broader shift in how firms think about performance and value.
AI is accelerating conversations about moving away from the traditional billable hour model. As efficiency improves, firms that continue to tie compensation strictly to hours worked risk misaligning incentives—rewarding time spent rather than outcomes delivered.
“If you’re more efficient but you’re just given more work instead of being rewarded, that becomes a problem,” Piscopo noted.
In that context, Piscopo says transparency is a critical but often overlooked lever in compensation strategy.
“Having transparency in those models and being willing to talk about it with people—not just have this very kind of cold process where a number is thrown out—can make all the difference, even if the number is exactly the same,” Piscopo says.