Poll Results: 2022 Planned Year End Salary Increases
We polled our audience of partners to find out what CPA firms are doing when it comes to 2022 pay adjustments for employees. Based on 137 responses, the most common average percentage increase planned for year-end staff salary adjustments was 10%–13%, followed closely by 6%–9%.
Not surprisingly, larger accounting firms are making larger adjustments. That often poses a challenge to smaller firms: a lack of leverage to recruit staff with high and in some cases gargantuan increases. I heard recently of a firm offering an additional $80k to a non-equity partner to jump ship.
There are many ways to offer a competitive workplace (perks, flexibility, challenging work, etc.), but compensation must be in line with the market. What benefits of working at your firm would overcome an offer of an additional $80k (or even $8k!)?
Many firms do their annual adjustments mid-year, so some of these increases reflect what has already happened.
Noteworthy comments about increases and timing:
- “We gave our staff an across-the-board increase/adjustment of 10% in October. We plan additional increases for high performers at year-end.”
- “We did collective increases averaging 15%–18% in Dec of 2021 and June of 2022.”
- “Range was from 8% to 25% with an overall average of 12%.”
- “While we normally only adjust pay at year-end, this year we did an across-the-board increase of 5% in June. We are planning pay adjustments at year-end of an additional 5%–10%.”
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- “We are setting up a bonus pool of 6% comp based on hitting chargeable hours and realization.”
- “We increased wages by about 20% for 2022 and expect that we may need to increase by a large percentage again this year. We are in the Midwest and are finding larger firms offering our staff wages that are higher than the area average for remote work. We can’t compete with that.”
- “The team has performed well, but hours – both admin and charge – are down overall. People are protecting their balance more than ever. We believe a 10%–12% with inflation will be about avg increase with high performers above that.”
- “I’ve given 2 raises over 18% in the past 12 months, and am still getting complaints about working at McDonald’s or Chipotle for $23–$28 or even $30 per hour. For all the stress of running a risk-laden business, I can’t wait for robots to limit those jobs, so I don’t go take one myself!”
What are your plans for increasing compensation for team members this year? Have you found your adjustments over the past 1–2 years have helped reduce turnover or improve morale?
Some partners struggle with paying staff more for “doing nothing more” than they were doing before the adjustment. The challenge with this mindset is that if you want to keep those same people even at their same level of contribution, inflation combined with lack of capacity across the industry requires above-average pay increases. If you can stand to lose them, no need to provide the raise. But not many firms are in that position.
Bottom line: Stay competitive on pay and enhance retention by offering other benefits your team wants. And keep in mind your pricing needs to adjust to provide the same exceptional client service you have given our marketplace in the past.
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