When I enter any new client relationship, I find that the accounting is typically a trainwreck. First, we have to fire the CPA firm doing the outsourced accounting because they have no earthly idea what they are doing, and then we have to find a competent accounting manager. In between, we have to clean up the mess the accounting firm created, replete with new processes and automation.
Finding and interviewing are easy. I’ve written about it before.
While the hiring process may be easy, knowing what to pay that person is the question I’m most asked. Accordingly, I will walk you through an overly-simplistic method of pricing an accounting manager.
Do You Have Any Other Questions?
As of the day I’m releasing this post, I interviewed five accounting manager candidates over three days last week. Three of the candidates were experienced, with more than ten years of accounting work on their resumes. The other two were both five years into their young careers.
In my process, ten candidates were interviewed by my client’s head administrator. She gave me her top five candidates. During my interviews, I focused on the work they will be responsible for, their cognitive competencies, and their communication skills to ensure they are a cultural fit.
I was surprised that none of the candidates brought up pay. For my favorite candidate, “Don’t you want to ask about pay?”
She had read that she was not supposed to discuss pay in an interview. I need to find her playbook and read it. I didn’t know that rule.
I permitted her to ask, but she still didn’t, so I asked the question for her. Here is how I responded:
My client believes in pay transparency. That is, we do our very best to pay for a position the way it’s priced across the country. We don’t pay on the top end of the scale, nor do we pay at the bottom. Our pay is either slightly above or below the median for the position.
You may think you are worth far more than the median salary for this position. That’s a fair comment. But we pay based on the role, not on the value the candidate places on themself.
If you live in a large city, our pay will take that into consideration. But if this position is remote (and it is), our bias will lean toward those in the rural Midwest unless the candidate blows us away with their skills and capabilitiesMark Gandy’s standard response for pay transparency for any position.
Unpacking Pay Transparency
Incidentally, there are several great definitions of pay transparency. In this context, it’s using readily available pricing data from a simple Google search to attach to any job description.
Now that you’ve seen how I respond to the pricing question for accounting managers let me provide a few bullet points on my imperfect method:
- My clients cannot afford expensive job salary surveys. Instead, we do comprehensive searches on Indeed, CareerBuilder, and other job board websites.
- When narrowing down the list in the search above, try to find close approximations to your job requirements for the accounting manager position. You’ll never find a perfect fit.
- In about 50 percent of your search results, you’ll find a pricing range vs. one salary number. That’s fine. Include it in your table of about 20-30 job matches.
- Once your list is complete, calculate a median and give that number a range of +10 percent / – 10 percent. That’s the range you’ll use for your new position.
- Yes, regionality impacts your range. For those living in LA, New York, Chicago, or other large cities, be prepared to add another $5k to $10k to the position.
- Your newly created pay range serves two purposes. The first is to establish a price for the position. The second reason is to give yourself some flexibility on the candidate you hire. Inexperienced but qualified candidates can be hired at the lower end of the range. You can use the higher end of the range for more experienced candidates.
Don’t Forget Your PEO
About half of my clients use PEOs for payroll and low-end HR services. My favorite PEOs have salary surveys by region for all types of positions. Take advantage of that service.
A few payroll firms also provide access to similar surveys at no extra cost.
I still prefer my non-scientific method for mining pay ranges for accounting managers. Plus, I can share my findings with job candidates should they ask how my client arrived at our numbers. That’s never happened in my twenty-plus years of consulting.
The Last Word
Most entrepreneurs I work with are creative and forward-thinking. I can hear them now saying, “I think I should follow this pricing process for all of my job candidates.”
They are correct. This process works for any position, not just for accounting managers.
Furthermore, consider following this pricing survey approach every 2-3 years and compare the results to every person you currently pay. A pricing bump may be needed for team members falling under the median.