Raises in Corporate America - Accounting

[iamtheflash]

Hello all!  First time poster, long time lurker.  I wanted to see if any of you had some knowledge to share regarding your experiences with raises in the corporate world.  I'm an accountant at a large publicly traded company in the midwest.  I spent 4 years doing public accounting at a small firm and have been doing the corporate thing for almost 3 years now.  I perform well according to my reviews, but my raises have been less than 1.5% each of my first two years and this year I got no raise at all.  I was wondering if this typical in the industry?

[Sibley]

In general, my experience is companies are very short sighted in how they do raises. They hire at market rates, but don't give raises to keep people at market rates. Thus, people have an incentive to change jobs.

What's market rate? If you're not happy with your current salary vs. market rate, then either talk to your boss about a raise or find a new job.

Askamanager.org will help you out.

[iamtheflash]

I appreciate the response.  I'll check out the website, thanks!

[lbmustache]

Hmm, 1.5% seems quite low. My brother works for one of the "big 4" and his raises are about 5-7% per year.

If he moved to a different company, same or similar role, he could see his salary jump by a minimum of $10k or so.

[wbranch]

I worked at a local CPA firm in the midwest for 6 busy seasons. Average base pay raise over that time was 8% a year. Ranged from 4% at lowest to 16% in best year. Bonuses were additional 4%-6%. There was some turnover and some big engagements I took initiative on, 2nd year I exceeded billing goal by over 50%. I did bring in some individual clients and was on a partner path. I know a couple people at big 4 firms who were mid-top rated and averaged 6-8% in non-promotion years and 12-15%+ when promoted.

Only talked to one coworker at the local firm about wages who was there 4 of those busy seasons and he had received about 4% average over the 4 busy seasons. But he did not pass CPA exam and was as interested in the work as much, which he openly admitted to me.

Currently at a mega-corp in accounting/finance department and received a 2% raise after 7 months when the regular raises were given. They said they typically don't give raises when someone only has <1 yr but I was exceeding expectations. I never asked about typical performance type raises, which I probably should have. But my understanding is most raises are in that 2-3% range at corporate jobs unless it is a promotion/job title change that might be 10%+. But changing companies can get you 15-20%.

I have also talked to friends in engineering/supply chain/construction management at mega-corps about this and most received 2-3% in non-promotion years at a mega-corp but 8-10% in promotion years. Changes were always much bigger when switching companies.

[The_Pretender]

A finance role in a corporate setting.  You can expect 1.5-3% year "COLA" increase.  The company may not call this a COLA, but this essentially covers inflation.  A lot of "raises" come from taking on new roles/titles.  So in finance, raises are usually rewarded for job hopping within the company every 18-24 months.   Each company culture is different, but this is a broad generalization for large corp.

Recommendations:
You most likely complete goals with mid-year and year-end reviews.  You most likely have a discussion with your manager during these times.  This is the time to 1.) point out all you accomplished on your goals documented in the HR System.  2.) You can ask for more goals if you have accomplished all and 3.) you can also take this time to ask your manager what it will take for you to get to the next level or next role.  Document your career here...  So when you go to lobby for a raise, you can refer to this documented performance.  Your manager can also reference this when they lobby HR for your raise.  Corporations are very structured with red-tape.  Understand how raises are awarded.  Does it take 3 levels of manager approval with a final sign-off from HR?

Work to find or strengthen mentors in your company.  They usually can provide advise on how to manage raises/promotions and be an advocate for you within the company.

Understand your corporate culture.  Do they give "raises through promotion"? or are the more inclined to give raises in role (unlikely noted above)?

Understand your incentive bonus pay.  The big Corps. I have worked for in the past try to use their incentive/bonus payments to reward outstanding rising stars while also trying to push under-achievers to look for new roles.

One company I worked at hired a gal from a big-4 firm with 3 years of experience.  Her salary was 10K more than a senior analyst who had been with the company for 25 years.  This is a good lesson for all to understand your current value in the market you live in.  If the current company is not compensating for you skill set, it is time to look at other opportunities in said market.

[Calvawt]

Those raises are low.  I spent 10+ years in Kansas City and the last 8 in California.  All in corporate finance but in 3 different industries.  Somewhere around 2-4% is more typical depending on profits and the business environment each year.  High performers usually get a bit more.

A promotion is the best way to juice your salary.  If one of those is not on the horizon, consider looking somewhere else and you will probably get a 10-15% raise for the same level position.  Be wary that moving laterally can come back to haunt you when looking for the next level as employers sometime draw hasty conclusions from looking at tenure on your resume.

If you are not a manager yet, with 7 years of experience you should be able to make that jump by working with a headhunter.  I would strongly advise that.

[bognish]

2-4% would be normal for corporate raises. If I got a good review without a good raise I would ask why the disconnect. Depending on how hard you want to push either ask for it to be adjusted to a good raise, and/or as what you can do in the current year to get a higher raise. Depending on the answer to that you decide if you want to stick around. Its helpful to keep your resume up to date and be a good worker if you are going to push.

[maginvizIZ]

I worked at a finance finance firm for 2 years.  Not one raise.  I switched jobs and got a 50% raise.

I've worked at my current corporate finance job for 2 years.  6% the first year (not normal in the current company I'm at).  2nd year I received 4% (which I was a little bummed because I did some very outstanding things).


The standard is 3% from what I hear.

I plan to interview every 2-3 years, just to check what my market value is worth.  I"ll probably take any offer 15%+.  Speaking of which... I'll go ahead and apply to a couple jobs right now.

[Raymond Reddington]

I used to work at a big 4 accounting firm. Got a 0% raise one year, because pay was "frozen" for everyone except the partners, who took a pay cut. Quit, took a low paying job to have some hakuna matata time and learn some skills (and this was well worth it!), before joining my current employer. Within 4 years, my pay had very nearly doubled from what I was making at the accounting firm.

Had I stayed in accounting, I would have had to promote to the Manager level to look forward to that kind of compensation. And my healthcare would have been more expensive, and no pension.

A good chunk of my pay increases at my job now have been overtime, however, as annual raises have typically been 2-3%. But I've always tried to take on higher paying assignments where possible, and while I don't chase overtime, I don't shy away from it or say no to it very often either. I've also sought out promotions, since joining this job. I'm due minimum 2% raises for the next few years, and once they decide what they're going to do re: raises with my job title, will get that percentage in addition. So I'm hoping for AT LEAST 4%/yr for the next few.

No raise is atypical in this kind of economy, unless your business is facing major headwinds. Corporate profits are at record highs, companies should be able to find a raise in their budgets, especially for strong performers as identified by peer/performance reviews.

[MaaS]

In general, my experience is companies are very short sighted in how they do raises. They hire at market rates, but don't give raises to keep people at market rates. Thus, people have an incentive to change jobs.

What's market rate? If you're not happy with your current salary vs. market rate, then either talk to your boss about a raise or find a new job.

Askamanager.org will help you out.

Yep. New talent is treated as an investment, existing talent as an expense.  Illogical, but seems to often be the case.

[marty998]

I would be happy with 2%, but that is our accounting market here. The good times are well and truly over for now.

[chasesfish]

I work for a big public company in finance.  The non-revenue producing roles end up having pay progressions that look like 1-2% per year, then they earn a level/job change promotion and get 5-15% if they're staying in the same role.

If they're moving to a different role/manager group and specifically if its a geographic relocation, that's their opportunity to get paid.   I went through this for my first seven years, I only got two meaningful raises, one with a level change and one with a geographic location before my pay really started rising as my value increased to the company.

However, what you're dealing with is still common.  I got over a 50% raise in the span of 18 months because of a lot of sacrifices I made for the company and have since received three of "merit pool" style raises.   Where it gets really frustrating is when the market moves faster than your internal level moves.  I have a newer boss who is nice, but kind of oblivious to this.  After seven months of doing it the nice way, I had to push the issue pretty hard with him.  We'll see what the results are

[iamtheflash]

Thanks for all of the insight everyone, I definitely appreciate it.  Looks like I have some thinking to do.

[Proud Foot]

I think the 1.5% seems low for annual raises.  Throughout my career in public accounting and industry I have gotten raises of 2-5% each year.  How big of a company do you work at and how is the bottom line looking for year and compared to budget? Was the no raise a company wide thing or was it just select few.  Similarly how did the 1.5% previous raises compare company wide? I would suggest to start with talking with your supervisor and finding out why you didn't receive a raise and what you need to do to get a raise larger than 1.5%.  Whatever the response go ahead and keep your eyes out for a new job that you can move to and get a significant raise.