PAY & COMPENSATION

Staff Need Good Pay and TLC

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table of responses

They’re scarce. Here’s how to keep them happy.

By CPA Trendlines Research

It’s no news to the accounting industry that staff and professionals are hard to find and hard to keep from wandering off to some other firm.

MORE: SURVEY: Accountants Economic Outlook Brightens | The 7 Categories of Cybersecurity Solutions Firms Need | Understanding the Full Cost of a Data Breach | Research: Accounting Pros Cautiously Optimistic about Generative AI | How Auditors Can Beat AI | Why the U.S. Must Act Now to Protect Our Online Privacy
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And the law of supply and demand hasn’t failed to rule, according to the Global Talent Trends 2023 survey of the Association of Chartered Certified Accountants: Scarce employees expect a good salary, good treatment and a chance to work outside the office.

Identifying and dealing with these employees’ expectations is essential to a continuous and successful flow of business. The survey found five challenges to that flow.
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Tax & Accounting Profession Grows, but Wages Don’t

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Total employment at tax, accounting, payroll, bookkeeping and related businesses hits a record high of 1,166,700 jobs.

Tax preparation and payroll services are exceptions.

By Beth Bellor

Are there really staffing shortages? Employment numbers in the accounting profession keep rising.

MORE on STAFFING and COMP: Tax and Accounting Pay Advancing at 5.9% Pace | Bill Penczak: Stop Forcing Smart People to Do Stupid Work | Sandra Wiley: Staffing Problem? Check Your Culture | Firms Rev Up Expansion Plans | Accounting Jobs Up 4% for Year | Research: Accounting Pros Cautiously Optimistic about Generative AI | How Auditors Can Beat AI | How Tax Practitioners Became Cybersecurity Risks | Why the U.S. Must Act Now to Protect Our Online Privacy | Top Tax Vendors Caught Red-Handed Selling Private Taxpayer Data
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Perhaps they could be rising even faster if the right people met the right spots – or the right incentives, according to a new CPA Trendlines analysis.

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How to Boost Profits by (OMG) Sharing the Upside

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Workers of the world unite.

By Bill Penczak

About a decade ago, the managing partner of our $100 million firm and I were discussing compensation and commission for our five business development professionals. He and I were in complete agreement that there should be no cap on commission or compensation – even if that compensation level with their base and commission was at par with or even exceeded that of the partner group.

MORE: 12 Points of a Good Compensation Plan | Rate Managing Partners in Six Areas | Eight Ways Managing Partners Make a Real Difference | Five Reasons That Leaders Fail | Eleven Things Partners Must Do | Seven Keys to Becoming an Equity Partner | How to Achieve Partner Unity | The Seven Building Blocks of a Great Partnership
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“If they’re making money, we’re making money,” he said. “Why would I want to limit that?”

Anyone who agrees with that premise should continue to read below. If not, feel free to move on to the next CPA Trendlines article or the NY Times short crossword.

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Bill Penczak: Stop Forcing Smart People to Do Stupid Work

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Challenge your people and keep the work interesting or risk losing them. 

Subscribe to CPA Trendlines podcasts anywhere: Apple, Google, Spotify, iHeart, Deezer, Amazon Music and Audible, Player FM, Audacy, Gaana (India), and Boomplay (Africa).

The Disruptors
With Liz Farr

Too many accounting firms have “smart people doing stupid work,” according to Bill Penczak, a veteran sales and marketing professional. The founder and chief insights officer for Mica Ventures said to think about the effort it takes to get an accounting degree and get your CPA, and contrast that with the years of mindless work that many new hires are required to do, especially if they go into audit, he said. “One of the reasons why there’s such a talent shortage is because the market has figured this out,” and no one wants to do that stupid work, Penczak said.

MORE PODCASTS and VIDEOS: Sandra Wiley: Staffing Problem? Check Your Culture | Scott Scarano: First, Grow People. Then Firm Growth Can Follow | Jody Padar: Build a Practice that Works for You, Not Vice-Versa | Ira Rosenbloom: With M&A, Nobody Wants a Fixer-Upper | Peter Margaritis: The Power Skills Every Accountant Needs | Joe Montgomery: Find the Sweet Spot of the Right Clients, Right Services and Right Prices | Marie Green: Your Bad Apples Are Ruining You | Megan Genest Tarnow: Hire for Curiosity Rather Than Compliance | Clayton Oates: One Way to Keep Clients for Life | Randy Crabtree: Follow These Three Rules to Keep Employees Happy | Erik Solbakken: Yes, You Can Work Less and Make More | Donny Shimamoto: Future Firm Growth Requires a Mindshift | Jennifer Wilson: Empower Young Workers to Build the Firm Everyone Loves | Mike Whitmire: Re-Think Your Hiring and Training Practices | Hector Garcia: Success Strategies of a Quickbooks YouTube Superstar | Blake Oliver: Why Tax Work Yearns To Be Free| Private Equity Explodes in U.K. | Brannon Poe: The Status Quo Must Go  | Accounting Nerds, Unlock Your Super Powers  | Disruptor: Jason Statts Shakes Up the Status Quo | Think Small to Think Big with Matt Wilkinson | When Financial Statements Go Extinct with Corey Schmidt | Can Geraldine Carter Save Accountants from Themselves? | Re-Inventing Accounting with Tyler Anderson

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Besides making smart people do stupid work, Penczak said many of the firms he works with are realizing that they need to do a better job with mentoring and career development, as well as simply having more conversations with their people.

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Tax and Accounting Pay Advancing at 5.9% Pace

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Payroll services hours take some wild swings.

By Beth Bellor

What would help recruit more people to the accounting profession? How about that trusty standby, more money?

Most accountants are bringing home more in hourly earnings, according to the latest available data.

MORE on JOBS: What an A.I.-Powered Workforce Means for Accountants | New Businesses Mean New Business | Accounting Jobs Up 4% for Year |

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For the accounting profession overall, hourly earnings hit a new high at $41.39, up 35 cents or 0.9 percent for the month and $2.32 or 5.9 percent for the year. Staff earnings hit a new top mark at $31.76, up 20 cents or 0.6 percent for the month and $1.64 or 5.4 percent for the year.
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11 Best Practices for Partner Compensation

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BONUS: Seven systems to allocate income … and who uses them.

By Marc Rosenberg
How to Bring in New Partners

It would take a book much longer than this post to properly explain the finer points of partner compensation, especially how each of the major compensation systems works. Oh, did I forget? We wrote such a book, “CPA Firm Partner Compensation: The Art and Science.”

MORE: Fifteen Steps to New Partner Buy-in | What Buying In Actually Means | How Partner and Staff Actions Impact Profits | Nuts and Bolts of Mentoring Staff | Nine Ways to Measure Staff Performance on the Path to Partner | Sixteen Duties of a Partner | Five People to Keep Out of Partnership
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Best Practices and Key Concepts

As is the case with all of my lists, no one firm incorporates all of these practices in its partner compensation policy. But I have observed all of the practices below in one or more of the best firms I’ve worked with over 20 years.

  1. Performance-based. There should be a strong link between pay and performance. When it comes to CPA firm performance and profitability: As the partners go, so goes the firm. The partners have a much greater impact on the firm’s success than professional staff and other personnel. If they perform at a high level, the firm will do the same. If partner performance lags, then the firm will suffer. Therefore, the firm needs to motivate the partners to produce at high levels and reward them accordingly. Compensation isn’t the best way to motivate anyone’s performance, but it is effective.

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Accounting Jobs Up 4% for Year

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Payroll services up over 7 percent.

By Beth Bellor
CPA Trendlines Research

Employment in the accounting profession continues to climb, according to the most recent federal jobs data. New highs were set in

  • employment overall and for staff, CPA firm staff, payroll, payroll staff, bookkeeping and women
  • earnings overall and for staff, and for payroll staff

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Total nonfarm payroll employment rose by 339,000 in May, with the unemployment rate ticking up by 0.3 percentage point to 3.7 percent. The professional and business services sector added 64,000 jobs, similar to April.
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Nine Standards for Partner Compensation

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Number 9 created by gaps between many small green plastic 9'sPlus six questions to ask about your plan.

By August J. Aquila
What Makes a Great Partnership

Ever wonder what the most appropriate partner compensation system is for your firm and how to assess partner performance?

MORE: 12 Points of a Good Compensation Plan | Rate Managing Partners in Six Areas | Five Ways to Keep Your Edge as a Leader | Managing Partner: The Toughest Job in the World | Why Partners Need Written Goals | Eight Criteria for Partnership | How You Can Get Partners to Change
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A firm’s compensation system is a reflection of its culture and external competitive factors. When was the last time you gave your partner compensation system a checkup?
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