EY's plan to increase starting salaries by 10% 'falls short for accountants' |
EY's plan to increase starting salaries by 10% for accountants is not enough to compete in the current marketplace, according to Jack Castonguay, an assistant professor of accounting at Hofstra University and vice president of content development at KnowFully Learning Group. Accounting and auditing firms need to do more to attract students to the profession. This includes raising salaries above other business fields, committing to work-life balance, and providing funding for students pursuing CPA licensure. While it's a positive step that firms like EY, KPMG, and PwC are boosting salaries, it's concerning that it took so long for them to take action. Other industries have already raised starting salaries to attract talent. Accounting salaries have been negative in real terms over the past decade, while other fields have seen raises beyond inflation. Accounting firms must compensate for the added education, work hours, and skills they demand from new hires. It remains to be seen if these salary increases are a one-time adjustment or a sustained commitment to improving the profession's attractiveness. EY's announcement does not specify how much of the $1bn will be distributed or if future hires can expect similar increases. The impact of these increases may not be seen for several years, as students have already chosen their majors. Pay increases must be higher and longer lasting to address the pipeline challenges and talent crunch in the accounting profession.