Big 4 vs Regional Accounting Firm Salary
Choosing between the Big 4 and a Regional or National firm can leave you with a lot of things to consider and one of those should be compensation.
The first thing you need to think about if you are actually making the decision is not just the up-front compensation boost you would get by choosing one firm over the other, but also take into consideration your long term earnings. There are a lot of factors that go into short term and long term earnings with each of the firms.
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Big 4 Compensation
The Big 4 are constantly doing market research and rarely fall below the average compensation for that geographic area. The HR team does a good job of scouting out who is paying what and trying to make sure the firm is competitive.
Your income increases pretty rapidly. There are a few professions where you can be a mediocre employee and break 100k before you’re 30 – and Big 4 Audit/Tax is one of them. If you can manage to not get fired, perform at expectations, and put up with the long hours, you will probably make at or above $100k after about 5-7 years with the firm.
Offices in high cost of living areas do not compensate their employees nearly enough. For example – based on the research I gathered for the Big 4 Compensation Reportt I found that 1st year audit associates in NYC were making $57,000 while those who started in Charlotte brought in $53,000. Obviously this $4,000 difference does not begin to cover the additional costs of living in that area. The compensation does begin to reflect the COL at about the manager level.
Another thing that could hurt your compensation is if you actually lose it. Big 4 is notorious for going on post-busy season layoffs. They don’t happen to every office, every year, but those about to be promoted to senior or manager may see that not only the promotion isn’t going to happen, but they have to pack their bags (and turn in their laptop).
You will likely work less hours, and your “hourly rate” will likely be higher than at a Big 4 firm. The national and regional firms tend to be more reasonable with working long hours. Every firm in public accounting will have busy periods, but it is less likely for the smaller firms to have you working 90+ hours a week.
The smaller firms often tend to offer competitive salaries to new hires, sometimes up to $4,000 more than the big 4 firms in the area are offering. I have also heard of interns getting paid $30/hour while the rate for the big 4 firms was $25.
It is possible at some of the smaller firms to actually get paid overtime. This is a crazy thought to those already in a Big 4 firm, but it is definitely something that exists. At the smaller and the regional firms where they may have 10 offices or so, there are programs that allow you to either get paid for the overtime worked, or take paid time off (PTO) for the hours worked. I haven’t heard of the national firms (Grant Thornton, McGladrey, BDO ect) offering this incentive, however.
Over the long run, the salary and bonus will be (slightly) less than the Big 4 counterparts. Although this is a generalization and not guaranteed, it is pretty understood that the Big 4 employees will surpass any boost in starting salary from the smaller firms by the time they hit senior associate.