I hope everyone is surviving the last big compliance deadlines of the year. 2019 has been a real humdinger for a lot of tax professionals. In April I heard things like “I’ve never seen it like this before” or “busiest busy season we’ve ever had” and several other statements, many including words not usually heard from tax professionals. I get the sense that the summer and fall have been equally busy…. or maybe even busier for some people. I suspect this year is causing a lot of tax people to really look hard at their career options. If there is a bit of saving grace to all the hours people have been working, it may be that salaries have continued to trend upward at a pretty fast pace. Although most tax professionals aren’t motived entirely by money, it certainly helps ease the pain.
It’s been a little over a year since we released our last salary newsletter and salaries have shown ZERO signs of leveling out.
This is especially true for people with 1 to 4 year of experience. Although my understanding of economics is limited to what I was forced to learn my sophomore year of college (sorry Professor Zheng), I’m surprised we aren’t seeing any significant signs of inflation. The other thing I’m wondering is, why I don’t feel any “better off” at the end of the month despite the consistent increase in salaries and thus, our fees? Talking with staff and senior staff over the past year, it seems people are making 10-20% more than they would have 4 years ago; it seems like very few of them feel “better off” as well. My hunch is that living costs have also increased by 10-20%, or everyone is just grumpier because of tax reform. Rumblings are that rent and real estate prices may be leveling off. We’ll see if salaries also level off too.
Before I get into the specifics of what salaries are doing, let’s talk about the employment market for tax professionals. In general, unemployment across almost all professions, remains at historic lows. In accounting and specifically tax, the rates are virtually zero. Now, if you’re an unemployed Tax Director or Senior Tax Analyst with 20+ years of experience, you might want to argue with me, but please know that you are sometimes an exception to the rule (it’s not fair, but it’s true). In the Denver area, with the exception of Western Union; which laid a few people off recently, virtually every tax position that opens up get’s refilled. We’ve seen some growth in the size of corporate tax departments, but it’s been nominal. We’ve had a fairly steady year in terms of net gains/losses in corporate tax headcount. VF Corporation still has no plans to move their tax department here. Jacobs plans to keep headcount the same and it seems that CenturyLink will keep about the same number of tax people at the old Level 3 campus. We’ve had a few small tax departments pop up, but no big tax departments move to town in the past year. For those of you that geek out on statistics; another indicator of confidence in the job market and the presence of job opportunities, the quit rate, has remained strong at 2.4%. Again, this is a monthly statistic which measures the number of people voluntarily leaving employment, usually for a “better” opportunity.
On par with last year, public accounting seems to have been affected the most by the growth we’ve experienced in Colorado the past several years. Although I don’t know the exact numbers, I would guess that most firms have grown by at least 5-10% annually the past 5 years, or at least the way they’re hiring suggests this. Although many of them are trying to bring on additional people, a lot of firms are struggling to find the tax talent they need. This “war for talent” in the public accounting world has forced firms to pay more money and be creative with other benefits and their PTO and work flexibility. We’ve also seen an increase in counter-offers that come in very strong. Firms know how hard it is to find good people, so they are prepared to over-pay to keep the ones they have. In the end, however, virtually none of the firms I’m aware of have really done anything significant to reduce the total number of hours people work – although this is the biggest “complaint” I hear from candidates about working in public.
We are continuing to see the Big 4 firms lead the pack with salaries. Middle market and local firms are doing their best to compete but struggling in some cases. Corporate tax departments are also struggling to accept where salaries have gotten to. I’ve said this before, but the job market and salary increases we are seeing remind me of the Denver real estate market a couple of years ago. Also, I’m hesitant to put a salary range in writing because I’m afraid these numbers will be antiquated by the time you read this. That said, here is what we are seeing right now:
Please keep in mind these ranges are median numbers and there are outliers that we encounter. In general, these numbers are for above average performers. Also, keep in mind that these numbers are for income tax and do not include indirect tax or some other specialty areas of tax. If you want to know what those numbers look like, please feel free to reach out.
In today’s market, the background most employers are looking for includes a 4 year degree in accounting, a Master’s degree in accounting or tax (preferred), CPA or working on it. Denver is what I refer to as a “meat and potatoes market”, meaning that people with a generalist background usually do the best and have the most career opportunities available to them. A generalist background with a national firm and in the corporate tax world means you have C-corp compliance and provision experience. With middle market and local firms, a generalist background is usually flow-through entity and individual compliance and planning. Don’t get me wrong, specialist can do very well financially, but just have less jobs to choose from.
One final note, while salary is an easy gauge to use to compare career opportunities, we still find many tax professionals willing to forgo money for less hours and more flexibility. Comparing candidates and job opportunities can be difficult because each one is unique. Hours, flexibility, advancement potential and culture are hard to put a value on. Just as drive, people skills, willingness to learn and integrity are with candidates.
Given the tough year many tax professionals have been through, we expect 4th quarter to be a busy time for us. If you’re considering a change, please make sure you are on my radar screen.
To your success,