SOX Compliance Pressures HR Sector

Public accounting new hires in the audit, tax and management services segment are getting paid about 10 percent more than they were in 2004, and those with one to three years of experience are seeing the same kind of increase. That’s according to a salary guide released by Robert Half Finance & Accounting.

Public accounting firms typically see higher turnover rates than private accounting practices, but the Sarbanes-Oxley Act of 2002 requirements have further tightened the market, said Keith Ekenseair, CPA and manager of Moore Stephens Frost’s Rogers office.

“As the industry has expanded, everyone is trying to hire more experienced people,” Ekenseair said.

He said the big four firms — Deloitte & Touche, KPMG, PriceWaterhouseCoopers and Ernst & Young — have dropped smaller accounts and more traditional accounting work because they are so busy with SOX compliance billings.

“In some of those organizations, they have a mandate to get rid of clients under a certain dollar level,” Ekenseair said.

The trickle-down result has expanded the entire accounting profession, he said.

The Institute of Management and Administration’s June report indicated audit costs for Fortune 1000 companies have ballooned in a year, up from $2.2 billion in 2003 to $3.6 billion in 2004.

“We really try to stress expectations up front,” said Cindy Boyle, a CPA and partner with BKD LLP in Little Rock. “We don’t want them to come to work and expect to work 40 hours per week year-round.”

Boyle’s path led her from private accounting into public accounting when she joined BKD eight years ago.

“Having worked other places, I knew that every place you work had positives and negatives,” Boyle said. “I think a lot of times students come out of college and work here and, as in many jobs, the pasture looks greener, or they just want to do something else. But I often wonder if they would make that decision if they had another experience first.”

Ekenseair said his firm decided to do something about its retention about a year ago.

“When we hire people out of school there is a natural tendency for people to leave into private accounting,” Ekenseair said.

He said at the end of the day, turnover is part of the business plan.

MSF hasn’t made changes to its benefits package or its pay scale, but it has put more energy and resources into its 12 employees. It hired the consulting firm, Seasons Venture International, about a year ago to help with its business.

Since then, the firm’s annual bonus plan has increased, although Ekenseair declined to say how much. The bonuses are related to client services and billings.

Ekenseair said his office has another two new hires joining the staff soon.

“In a lot of accounting firms, there is no reason to stay,” said Mike Thompson, owner of SVI. “If you get a dollar raise somewhere else you are doing the same job in the same kind of company for a dollar more, and so it becomes a salary battle or a compensation battle. At some point, that’s got to change.”

Thompson’s charge was to help MSF’s Rogers office establish a strategic vision to retain and hire the best employees.

Thompson said when the staff sees that their employer is interested in their professional development and personal growth, the level of trust increases.

He said SVI helps employees understand why they are necessary to the firm and how they fit.

The traditional billing model for accounting firms doesn’t always work in the current accounting environment, where firms are in such high demand, he said.