Esearch jobs - The Road to the Corner Office

The Compensation Puzzle
For accounting and finance professionals and hiring managers alike, 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 both parties in job negotiations 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.

For employers, obtaining hard data may require a much bigger 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; they may be equally reluctant to hire an outside agency to do the job. In those cases, it’s worth turning to professional recruiting companies such as those represented by the American Association of Finance & Accounting (see listing of members at www.aafa.com); because they’re on the front lines of employment, they can provide up-to-the-minute observations about market rates for all kinds of accounting and finance positions. As members of AAFA, our professional recruiters are equipped to provide sound advice on local market salary conditions.

As an aside, employers paying below-market salaries to their current employees may find themselves tempted to offer much higher paychecks to particularly promising new candidates. Industry experts advise against going that route because those existing accounting and finance employees will almost certainly discover the discrepancy—after all, thanks to the nature of their jobs, they often see confidential salary information.

Bottom line: Long-time employees are naturally going to resent a newcomer who commands more money than they do—and they’re likely to depart for greener pasture as a result. Given the difficulty of recruiting accounting and finance talent in the first place, it makes more sense to retain the people already on your payroll by boosting their salaries to match the levels you’re offering to attract new candidates.

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 and commission 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 $4-per-gallon 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.

For employers, reaching that happy conclusion requires asking both existing and potential employees what they value most—and, when possible, giving it to them. For candidates, it means taking the initiative to ask—and, when necessary—negotiate for what they want.

From both sides of the desk, it’s critical to think in terms of the total compensation package--and how what’s being offered in one situation compares to what’s available elsewhere. Ultimately, the salary offer will probably represent the biggest factor in any hiring decision—but it’s certainly not the only piece of the puzzle.