Salaries in accounting are rising faster than ever thanks in part to the Sarbanes-Oxley law, and a dearth of qualified professionals, said industry sources.
The main reason for the rapid compensation hikes is plain old supply and demand.
“There are more jobs available than people,” said Michael Follin, the regional vice president for Burlingame-based Accountants Inc.’s local office.
Just about five years ago, the average accounting graduate could expect to obtain a salary ranging between the low to mid-$40,000 range, Follin said. These days, especially if a person has an advanced degree and is a certified public accountant, he or she can nearly double that, he said.
Yet where pay scales are really escalating are those paid to seasoned accounting veterans with about 10 years or more in auditing and at public finance, say many in the industry.
Megan Shirk, a recruiter for Accountants Direct, a local financial executive search firm, said accountants with five to 15 years of experience, particularly on the audit and attest side, and familiar with Sarbanes-Oxley requirements, can command much higher salaries than ever before. Sarbanes-Oxley is the accounting reform law passed by Congress in 2002 to address the surge of accounting scandals, including those at Enron and WorldCom.
The money is so good that many experienced accountants are leaving their full-time positions in favor of working as consultants on short-term projects that can last a few weeks to a year, Shirk said.
Tim Dixon, the owner of Dixon Consulting Inc., a San Diego-based accounting consultancy, said his firm was busier than ever in the past year, and there is no sign of any slowdown.
He declined to reveal sales figures, but said revenue was up tenfold from the prior year. He has 15 employees, most of whom possess more than 20 years’ experience in finance, accounting or information technology.
“We’re helping a lot of companies comply with Sarbanes-Oxley,” Dixon said. “We’re also doing a lot of work in helping companies in their ‘process improvements,’ helping them improve their operations and become more efficient.”
Dixon declined to say what he was paying his employees, but noted that his strategy was to pay more than what they were getting from the competition.
According to a 2006 salary guide compiled by Robert Half International, a Menlo Park-based staffing firm, the competition for skilled, experienced professionals in accounting is getting so fierce that companies are offering signing bonuses, flexible benefits options such as telecommuting, and doling out referral bonuses to employees who provide names of successfully hired new workers.
On the corporate accounting side, senior internal auditors for small companies with up to $25 million in sales were earning between $48,000 to $55,000 last year. This year, the same position compensation will increase 8.5 percent to $49,500 to $62,500, the survey states.
Internal auditors at large companies with more than $250 million in sales can expect a pay range between $58,500 to $76,250 this year, up 8 percent from last year.
“It’s so competitive. Salaries are increasing, and good CPAs have all sorts of opportunities, not only in public firms but in every facet of our industry,” said Joan Alleckson, the president of Profit Solutions Network, a financial consultancy based here.
Some of the methods employers are using to entice the best and the brightest to join their companies are flexible working hours, more vacation time and higher compensation, Alleckson said.
Salaries are most dependent on the position and the experience level of the person, but Shirk said she’s seen an average of about a 10 percent increase in total pay packages in the past year.
The lack of experienced personnel in some sectors has caused many companies to be flexible in their hiring, she said.
“Now is a good time for people who are considering changing their industries where they work (i.e., moving from telecommunications to biotechnology),” Shirk said.
“As long as they have the technical skills for the job, and some experience, many employers are more willing to hire a person even if they don’t have that experience in their particular industry.”