Accountant Salary Negotiation
Negotiating your salary in accounting can be a tricky task, but VERY exciting! You also want to be aware of whether or not it is even possible to negotiate your salary before deciding to do so.
I once negotiated my salary as an intern at a company, but once I started my “real job," a salary negotiation would’ve been laughable - not because they didn’t think I deserved it, just because it wasn’t part of the company culture and policies. You receive raises and bonuses each year, not spot raises. Local management had minimal say in the process. They are just passing their marching orders along from corporate.
General Rule: The Big 4 Firms do not negotiate salaries for interns or during your first few years. For all I know, they may never negotiate salaries with employees.
Know something different? Reach out to me.
That doesn’t mean you don’t have control over the amount of money you make, you certainly do. If you meet certain performance criterion, you can be eligible for year-end bonuses, spot bonuses, and large raises (10-20% vs. 4-7%, even in the early years).
There can be some negotiation when you are going to be part of a larger project, like going overseas, moving to a new city, or working on a special project. However, as you move down to smaller firms/companies in public accounting, as well as private companies, the pay can be very negotiable.
In my experience, this is the trend based on the company size and make-up:
Likelihood Your Company is Open to Salary Negotiations
· Larger organization
· More bureaucratic
· Highly mechanized HR and recruiting system
= Less open to salary negotiations
· Smaller organization
· Local management makes decision on hiring and pay
· Minimal policy and procedures in place
= More open to salary negotiations
Note: This is just my own experience and what I see as the general trend. Ask trustworthy co-workers what they have seen and heard about in the past with your company.
When I worked in private accounting during my Masters work, I negotiated a 23% raise (albeit I wasn’t making a lot of money back then) and here is how I did it.
1) Define a need
Maybe you have student loans, are getting married, bought your first house, or are having kids. None, I repeat NONE (did I mention none), of these are reasons why the company should pay you more money. However, they are all reasons that will help make sense of why you are asking now and why you may be more motivated to take things to the next level and to become a more valuable asset to the company to earn the increase in pay.
2) Display that you have other options without telling them you will quit (even if you will)
If possible, try to obtain an offer for more money at another company. This will also be a good place to fall if you happen to have a terrible boss who for some reason is offended by the conversation (it's a red flag if that’s the case and you probably should leave). However, you can also use it in the conversation as I have below:
Hey Bill, thanks for taking this meeting.
Recently I received an offer from another company. The crazy part is I wasn’t even looking for other opportunities as I am very happy here. But since I was approached, I have entertained the idea due to some of the life changes I am going through (mention the need as discussed above).
I love working for you and with the team and I am excited about the upcoming projects we’re working on. But, having just gotten married, my husband and I are trying to pay off our student loans (or other need as shown in part 1). While I know that is no reason for you to increase my pay, it does have me considering this position.
To be honest, my first choice is to work here. Would you be willing to discuss the possibility of a raise?
See below for the remainder of the conversation.
3) Realize that you don’t necessarily deserve anything and they don’t owe you anything.
If you have the job, you previously accepted the offer based on the previously-defined terms. You were happy with it. It was probably the best offer you could have received compared to all other offers (total compensation for you considered, which includes non-$$ items). Be grateful for what you have received so far and talk about how this is part of your larger goal of being happier at work, being more productive, and staying with the company longer.
Here is a script for how you can start the meeting. Make sure you are alone in a room, preferably in the office and not at lunch. It can get awkward if you have to talk with the person for 30 minutes after the conversation.
Top 3 reasons to download this eBook:
- You're curious about the compensation and benefits of public accounting
- You want to know how many years it will take you to make 100K+
- You are curious about what effect living in different cities and going to companies of different sizes will have on your compensation
Hey Bill, thanks for having this meeting with me today. I really appreciate it.
I reached out to you as I have been reflecting on my experience here, which I have really enjoyed, and I thank you for that.
I’ve been thinking about my future and how this company and job plays in. I want to continue working here for the coming years, that is assuming you are interested in that as well (if you feel comfortable, you can make this a humble joke).
However, the reason for this meeting today is that I want to discuss my compensation and a potential re-assessment based on the valuable things I have brought to the team in the last few months/years.
(Note: if the person knows all that you’ve done, no need to repeat it. If you are actually good enough to ask for a raise, he or she will know what you’ve done. If you do need to mention a few things, do not mention more than 2-3.)
I want to stay here and I want to be happy and excited about the work that I do and the benefits I receive. I am not demanding an increase or saying that I will quit. I just want to have a discussion about the possibility of a compensation increase, or what I need to achieve in order to have my compensation increased.
(Note: let the other person talk and really listen to him or her. Be gracious with everything that is said and if he or she brings up objections, DO NOT get defensive. Listen, summarize what was said, and respond)
Scenario 1: He or she is open to the idea
I appreciate you being open to the idea, Bill, and I certainly don’t want something for nothing. I had some ideas about a potential increase that I would be satisfied with, but what do you think makes sense?
Note: If you have a number in mind, don’t be afraid to say it. Be gracious and humble in the delivery but aim a little higher than what you would be satisfied with in case you receive a counter offer.
Scenario 2: He or she is reserved about the idea
I appreciate you being honest and I know these are tough conversations to have. I don’t want something for nothing. If you don’t think an increase is warranted, I respect that, appreciate your honesty, and trust your judgment as my supervisor. I knew this would be a potential scenario going into this meeting. So let me ask you this question:
What circumstances would have to occur in the next 3-6 months for you to say, “You know what, this person deserves this raise/promotion?" What can I do to earn your confidence on this?
If the person says there is nothing you can do, you will get no raise, you know your answer. Be gracious, humble, and understanding. Then quietly prepare your exit if the money is important to you. From my experience, and talking with others who have gone through the same process, this rarely happens and almost never happens if you are a top performer.
Be humble, gracious, make sure you are asking and not demanding, and have the attitude that you aren’t owed anything. Most people (not all, and make sure you know who you are dealing with) can be persuaded by humility and grace rather than by arrogance and threats.
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