The Compensation Puzzle
For accounting and finance managers, making the right job match involves knowing the market standards not just for salary, but for benefits as well.
By Anne Stuart
Want to cut to the chase with today’s finance and accounting salaries? Let the percentages tell the story.
Despite the otherwise sluggish economy, accounting and finance salaries continue to increase steadily: According to national industry estimates, starting salaries have risen an average of 3 to 5 percent annually for the past several years, with a few specialties—notably, regulatory-compliance or internal-audit expertise—sometimes racking up average increases of 10 percent or more.
But while it’s useful to know those national averages, it’s far more important for hiring managers to be familiar with the market rate—that is, the salary ranges that similar-size companies are paying for similar jobs both locally and in a particular industry.
For employers, such intelligence offers an added benefit: helping prevent turnover by making sure that they’re providing their existing accounting and finance employees with competitive compensation packages.
Gauging the Going Rates
The most effective way to find out who’s paying what: Ask.
Obtaining hard data on your own may require a big step: conducting or commissioning a market survey. The process—which involves asking HR representatives at other companies to answer a set of compensation-related questions—isn’t for the faint of heart. It requires:
preparing a comprehensive list of questions, customizing the models available in HR guides or online sources
contacting other employers and convincing them to share competitive information (often accomplished by offering to provide all participants with survey results in aggregate form)
actually conducting the survey via mail, e-mail or telephone, and
compiling and analyzing the results.
Understandably, many employers can’t justify the staff time needed to conduct a meaningful salary survey and they may be equally reluctant to hire an outside vendor to conduct the analysis due to the expense. To be sure that you are compensating your staff appropriately, please contact Hemphill Search Group. Dan Hemphill and the search executives on the Hemphill Search Group team are eager to provide insight regarding local market compensation. The Hemphill team is glad to assist their clients who have found that many national surveys often group positions into overly broad categories with equally wide salary ranges that just do not add value. The Hemphill Search Executives are able to provide current and accurate information based upon the specific position in question and the experience level of the person in the role today. All of this information is valuable as companies are making the necessary adjustments to ensure that salaries and total compensation packages are in-line with market rates as salaries in accounting and finance continue to escalate. Companies with national offices are also able to receive insight as Hemphill is able to leverage relationships with their fellow affiliates within AAFA, the oldest and largest alliance of executive search firms specializing in the recruitment and placement of finance and accounting professionals.
Employers who do not adjust the salaries of current employees for fear of the added expense often times experience the greatest cost and loss. Most end up increasing the salary levels after several valuable members of the team have resigned due to being underpaid. After all, the high caliber employees are typically in highest demand and therefore the first to go. The cost of losing high caliber employees is far greater than most imagine; so winning companies are reducing costs by making incremental adjustments on a proactive basis.
Beyond the Paycheck
No question: The base salary is typically the strongest negotiating tool for the employer and the biggest consideration for the candidate. The Society of Human Resource Management, an Alexandria, Va.-based professional association, cites numerous surveys in which employees rank compensation as their top priority (not surprisingly, it’s also the No. 1 source of worker complaints about their jobs).
But, of course, companies can sweeten their salary offers by combining them with other desirable benefits: bonus potential, profit-sharing and 401(k) plans and high-quality health insurance, to name the most obvious. Other popular perks include anything that helps employees advance in their careers—for instance, tuition reimbursement and on-the-job training--and anything that helps them better balance their work and personal lives: child care assistance, flexible scheduling, part-time opportunities and work-from-home options (with the last being particularly appealing in these days of high gasoline prices). In competitive situations where salary offers are roughly equal, the availability of those other perks may well tip the scales in a particular employer’s favor.
Reaching that happy conclusion requires asking both existing and potential employees what they value most—and, when possible, making the necessary changes to ensure that your firm has a competitive advantage.