Accounting firms are in a period of greater transformation than ever before. Prior to Covid, firms were already moving to more flexibility in remote work, and the pandemic obviously increased that. Dramatically. Many accounting firm staff (all in some areas of the country) moved to home-based work models for at least a few months. Some staff continued to do so for a year or more.
After more than a year of implementing these new, virtually 100% remote practices, many firms are deciding that it will continue to be at least a part of their workflows even post-pandemic. Yes, many workers are ready to go back to office environments, or have done so for several months already. But even these staff have realized they can be just as productive remotely, and want to have that option as an option when necessary, for work-life balance. Others have taken advantage of being able to work remotely to avoid long commutes, or to move to regions with less expensive real estate or states with lower taxes.
What Will Happen to Salaries Post-Covid?
If more employees are working from remote offices, generally at home, this can allow some firms to reduce the office space that they need, thus reducing overhead costs. Will this result in the ability to pay more to attract and retain highly-skilled staff, who are now able to work for firm’s anywhere in the country because of remote work policies? Or will this higher number of available workers cause a decrease or stagnation in salaries? And does a Chicago or New York-based firm need to pay the same salary to an employee who moved to Idaho as an equal-level staffer working in the home office?
During the first several months of the pandemic, many larger accounting firm staff saw pay cut of 5%-15%s, partner pay cuts of up to 25%, or furloughs or layoffs, according to GoingConcern. But as we moved into 2021 and the vaccines emerged as successful, firms eliminated those reductions. And those with additional specialties, such as CPAs, CMAs and CMGAs, were less likely to have seen pay cuts, according to an AccountingToday survey that should CMAs “were more confident in their job performance” compared to non-CMAs and CPAs.
So, what will happen to salaries post-covid? Probably a return to normal annual salary growth, with some short-term stagnation for remote workers, according to ZipRecruiter. “Theoretically, lower living costs and fewer work-related expenses for remote workers could translate to wage stagnation going forward.”
In an article in Forbes, Zenefits “Chief People Officer” Tracy Cote says she expects an adjustment in pay is coming for remote workers who have moved to a lower cost region. Cote also offers advice to firms on how to develop, manage and move forward with new pay strategies.
2021 Accounting Salary Ranges
Professional accounting staffing firms like Robert Half, Randstad and Accounting Principals perform annual reviews and projections of what professionals in the field can make, depending on role, type of employer and many other factors including region. That information is useful, but must be viewed as part of a larger picture: A junior CPA at a smaller midwestern firm may not make much more, or even may be at par, with what a non-credentialled bookkeeper with years of experience makes in New York. And a partner at a firm with one office and two principals may have strong earning power even compared to a partner at a 20-partner top-100 firm. It’s all relative to firm revenue and region.
That disclaimer said, here are some highlights from Robert Half’s 2021 Salary Guide for Accountants. It is free, but you have to register with your email. Note: The salary guide was released in late 2020.
These are the starting salaries for accounting professionals in varying roles according to Robert Half (or other citation), who are assessed to be in the average of experience range (50th percentile). The guide also shows ranges for professionals in low, above average, and high achiever experience levels.
- Finance Executive (CFO): $203,750
- Accounting Director/Controller $147,000-$178,000
- Sr. Financial Analyst 5+ years: $86,000
- Internal Audit Manager: $116,750
- External Audit Manager: $93,500
- Entry Level/Staff Bookkeeper: $38,000
- Accounts Payable/Receivables Clerk: $38,000
