What’s Your Plan for Staff Pandemic Bonuses and Salaries?

MPs have been asking us with a high degree of frequency what CPA firms are doing for staff salary increases and bonuses. So, I polled a group of 27 firms that are members of a national, virtual roundtable that I co-manage with my consulting colleague, Art Kuesel. Twenty of the firms have annual revenue of $5-25M and the other 7 firms are between $2-5M. We asked them about what they did in 2020 as well as what they plan for 2021. Specifically, we asked them if salary increases and bonuses would be the same as before the pandemic or different.

What pandemic?

In a nutshell, the response can be summarized as “what pandemic”? Virtually all firms are handling their salary increases and bonuses in the pandemic the same as they did before the pandemic, with one notable exception: salary increases and bonuses will be higher than pre-pandemic times for those whose performance was truly excellent and/or those who put in an effort above and beyond what could be reasonably expected.

Our book CPA Firm Staff: Managing Your #1 Asset offers practical advice on ► talent management ► recruitment & retention ► flexibility ► importance of the boss ► mentoring ► leadership development ► performance feedback

Purchase your copy today!

During the first 4-5 months of the pandemic, firms were sort of in shock and feared the worst in terms of revenue retention, client bankruptcies, profitability and draw reductions. But as reality set in and firms got experience living with the pandemic, they found that their worst fears were largely unfounded. Firms stayed tried and true to their staff: firms understood all too well that their staff are critical to their firms’ success and whether there is a pandemic or not, firms need to have a laser focus on taking great care of their staff, including with salary increases and bonuses. Most firms made extra efforts to maintain communications and relationships with their staff due to everyone working remotely.

Noteworthy comments (each made by just one firm)

• “Our thinking was that the PPP loan we received enabled us to “normalize” our staff compensation awards.”
• “Our 2021 raises and bonuses will be bigger than normal.”
• “Those who made extra efforts will get larger bonuses.”
• “We gave our admin staff a little extra for being on the front line.”

Has your firm given higher raises or bonuses in 2020-2021? If so, were there any specific criteria you used in determining who would get them or how the bonus pool would be allocated?