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Why Higher Salaries Isn’t Enough to Recruit and Retain Early-Career Accountants

by | Jul 11, 2022 | The Great Reneging

Accounting firms across the country are raising salaries in order to compete in a candidate-hot labor market. And yet, it doesn’t seem to be enough to attract and retain top talent.

As reported in the Journal of Accountancy, job offers saw the largest spike among entry-level candidates, where salaries have remained stagnant for years. According to Bloomberg, accountants’ and auditors’ salaries saw a 17% pay bump in the past eight years, while starting salaries haven’t budged. 

Translation: Soaring salaries within the accounting space — with offers jumping as high as 25% in recent months — is long overdue. And yet, this industry-wide compensation reckoning may be too little, too late.

Within a sector infamous for brutal hours, high turnover, and early-career burnout, fed-up workers aren’t just searching for higher salaries and better benefits. Instead, they want increased job flexibility, improved work-life balance, and a larger emphasis placed on mental health. In other words, if you want a fighting chance at attracting today’s top early-career candidates, you don’t just need a larger payroll budget. You need a clear candidate engagement strategy to communicate how and why your firm is a better place to work than your competitors’. 

First Things First: Yes, You Need to Raise Salaries in Order to Attract Top Talent

Are today’s early-career candidates looking for more than a paycheck? Absolutely. Does that mean they’re willing to forego higher salaries for a better work-life balance? Not necessarily.

Attracting early-career top talent starts with getting competitive surrounding compensation — something accounting firms quickly learned over the past year. From the Big Four to independent firms, employers offered considerable pay bumps to attract and retain top talent. In early 2022, KPMG announced its second nationwide salary increase in a mere six-month span, spending an additional $160 million on payroll. In May, PwC followed suit, spending $2.4 billion to raise employee salaries by 5% across the U.S. 

The Great Resignation and current hiring crisis encouraged accountants to leave below-market-rate jobs in pursuit of better offers. However, there’s another key motivator behind the nationwide pay increase: There are far fewer incoming accountants to go around.

According to the 2021 Trends Report by the American Institute of Certified Public Accountants (AICPA), there’s been a steady decline of entry-level accountants in the U.S. In the 2019-2020 academic year, bachelor- and master-level accounting graduates decreased by 2.8% and 8.4%, respectively.

Today’s early-career accounting talent understands they are entering a field where they’ll likely receive multiple job offers. Therefore, your firm needs to position itself as a top choice — well before a candidate enters the interview process. 

3 Things Early-Career Accountants Look for From Future Employers

Recent grads are looking for more than a large paycheck when pursuing potential employers. To win the War for Talent, target accounting majors as early as their freshman or sophomore year of college, creating candidate-first experiences that highlights:

1. How You Make DEI Initiatives a Priority 

Today’s early-career candidates want to work for companies that create a diverse, inclusive working environment, yet only half are satisfied with their employer’s efforts. This may be especially true for the accounting sector.

Historically, the CPA profession was a white-washed field. According to the AICPA, 82% of partners at accounting firms are white, along with 77% of all CPAs in 2020. However, today’s early-career talent brings those figures closer to the 50/50 mark, with 41% of accounting grads and 35% of new grad hires being people of color.

If you want to attract the new generation of accountants, your firm will need to make your DEI initiatives clear to prospective candidates. Use a platform, like Scholars, to record a video from your CEO addressing your plan to become a more diverse, equitable workplace, or schedule a meet-and-greet between your HR team and prospective candidates.

2. How You Create a Flexible Workplace 

Accounting is widely accepted to be an industry prone to overwhelm and burnout, with a reported 90% of accounting professionals experiencing stress in their nine-to-five. Throughout the pandemic, exhausted workers called it quits, causing annual turnover rates in accounting firms to jump to 25%. 

Therefore, current accounting students and recent grads favor firms that pose a better work-life balance, offering more paid leave and a hybrid work structure. Why hybrid? As the first digitally-native generation, Gen Zers are used to learning (and working) remotely, and therefore crave a flexible work environment. With that being said, 2+ years of start-and-stop isolation has early-career candidates craving in-person interaction, with 72% stating face-to-face as their preferred communication method at work.

The solution? Offer the best of both options, allowing your early-career candidates to make the choice themselves. Throughout the candidate journey, organize in-person and virtual meetups within your talent community, and allow candidates to select their preferred mode (digital or in-person) of interviewing. In addition, make it crystal clear what their day-to-day life at your firm may look like, highlighting your hybrid work model, paid leave, and vacation time.

3. How You Prioritize Mental Health 

More so than any other generation, Gen Zers are looking for employers who value their well-being and mental health. Gen Z is more likely to report their mental health as fair or poor, and 90% say they’ve experienced physical or emotional symptoms of stress in the past month alone.

Let us be clear: If you don’t alleviate this stress throughout the interview process, candidates won’t trust your firm to value their mental health after they accept the role.

Leverage the Scholars platform to communicate to candidates how you address stress, fatigue, and anxiety at work. Organize a virtual town hall with company leadership, explaining how you support the mental health of employees during the busy season. Most importantly, use our personalized, automated software to prepare and follow up with candidates throughout every stage of the candidate journey, alleviating that pre-career anxiety. 

Early-Career Accountants Want More Than a Paycheck 

The accounting field is ridden with burnout and early-career turnover — now more so than ever before. Simultaneously, accounting graduates have dwindled in recent years, making it tougher to attract new top talent.

Increasing entry-level salaries and offering a competitive benefits package is just one step in winning the War for Talent. In addition, you need to create a candidate-first experience that clearly articulates how you prioritize mental health, execute DEI initiatives, and create a flexible workplace environment.

To communicate all of the above, use Scholars. Scholars is the automation platform created by Gen Z for Gen Z, allowing you to create a personalized experience for each candidate. To see how Scholars brings a level of humanity back to recruiting, schedule a demo.

About Scholars

Scholars helps companies build engaging candidate experiences at scale. Create personalized journeys for all of your candidates from application through onboarding.

About Scholars

Internships and early-career jobs are unlike any others. They are often accepted months, if not years, in advance of the start date leaving plenty of time for candidates to change their minds and decide to work elsewhere, costing your team time and money.

There are two ways that have been proven to decrease renege rates for any company: keeping candidates engaged by sharing personalized information and helping them make connections with their future teammates. Companies use Scholars to accomplish both of these at scale.