Using Big 4 Transparency for Better Compensation and Performance Discussions

Before we jump in, I want to give a big shoutout to the sponsor of this episode, Canopy. Canopy is the firm-wide operating system that helps accountants build a firm they'll actually enjoy working at. Canopy streamlines firm operations, from client management to managing your financials or your firm's performance, they've got you covered. And something I really like about them is you can actually demo their product with an interactive tour without having to sign up for a sales demo. They let the product do the talking because it is just so good. So if you're running a firm or in charge of improving the operations of a firm, go to getcanopy.com and click on the button that says take a tour to check out that interactive demo. Now one more thing before we jump into this episode, following the layoffs at PwC, the Aprio and PS Plus alliances, so PS Plus who got acquired by Aprio recently, got in touch with me bringing forward a whole ton of job openings to help job seekers land on their feet. The Big 4 Transparency talent pool has been very busy this week and I have been trying to make matches between as many candidates and roles as possible. We've already got a few interviews going for some folks who are let go from PwC, but there are a lot more opportunities available. So if you are a job seeker in accounting, go to big4transparency.com slash recruit, fill out the intake, it takes literally two minutes. And you'll only hear from me if there's a job matching your desired criteria. As a thank you for using the service, we've always paid out $1,000 for any successfully placed candidate. But for the next few months, at least we're going to double that for anyone who is seeking a new job as a result of a layoff at their firm. So we just want to help you land on your feet, give you that little bonus to get you going. So yeah, make sure you go check that out, big4transparency.com slash recruit. If you are a job seeker, I'm going to be honest with you, a lot of the jobs are for seniors and managers, but it doesn't hurt to try regardless. And now thank you very much and enjoy the episode. Hello and welcome to the Big 4 Transparency podcast. This week I am recording a solo episode and I want to take the opportunity to talk to you about how to have very effective compensation discussions that will be based on objectivity, on real data, not based on emotion and will actually lead to you having a performance plan and clarity on what you actually need to do to improve, to bridge the gap between your expectations, which should be rooted in reality and high quality data, and what you are kind of being offered. So first of all, you know, the first point of all of this is that you need to have realistic expectations and that's what Big 4 Transparency is here for, right? So first and foremost, what Big 4 Transparency is, is we are a crowdsourced database. I believe at this point we are the largest crowdsourced database of accounting salaries on the market and the whole purpose of this was so that we could get rid of the kind of information asymmetry where only the firm knows what salary benchmarking looks like and maybe employees don't. I think it's more beneficial for everyone that way as well as for firms because you can at that point move on from emotional discussions and have more objective data-driven discussions. So using Big 4 Transparency, if you're an employee, this might look like kind of browsing the spreadsheet that we have, which is a free offering. And for firms, this might look like, you know, getting in touch with me. We offer salary benchmarking for firms. It's going to save you a lot of time on that front. We have everything dashboarded out for you and it makes it a lot easier to get a view of the overall market and to run these discussions appropriately. But what you should be doing when you're looking at Big 4 Transparency is making sure that you are kind of basing your expectations on reality and on relevant benchmarks to you. So first of all, obviously people of your level in your stream, those are the inputs that you want to be looking at. If you're looking at a larger data set, if you're in like a big city or something, you have the benefit of being able to filter down to results in just your city. If you're maybe in a smaller city, what I recommend is looking at the cost of living classification. If you scroll right in that spreadsheet, we have cost of living classifications. And if you want more data points that are going to be relevant to you, you can actually look at those, you know, other cities within that cost of living classification. And so you should be looking at that data, you know, situating yourself within it, understanding like, you know, where, where do I think I am in terms of performance? If I think I'm a high performer, then maybe, you know, my hopes might be that I might find myself within the 50th or 75th percentile or somewhere around there of the relevant benchmarks to myself. And so at that point, once you have all of that data, I recommend kind of taking notes of like where, you know, where you stand right now, where you hope to be in terms of that relevant data. And when you're doing that, just make sure that you're, like I said, being realistic about, you know, similar cost of living areas. Don't compare yourself to someone with a JD if you don't. That's obviously a recipe for disaster as well. They're going to be paid significantly higher. So just make sure that you're taking the time to actually filter down appropriately to make sure you're looking at the right benchmarks for yourself. Once you know where you should be landing after this next kind of comp discussion, I think that it's a good idea to, you know, as much as possible, if you can have the discussion with like your people manager, if you can have that discussion with your coach at the firm or someone that you're close to, it would be great to kind of ask around and be like, hey, like, do you know where we're going to end up? I'm really hoping to be kind of at, you know, at this point and getting ahead of it. Because some places, once you get into the comp meeting, it might be too late. The decisions might already be pretty firm. I don't think that's a great way of operating. Unfortunately, some firms do operate that way. I think there should be maybe a little bit more of like an open conversation as you're going through it. Next up, I think in the comp discussion, ideally, like the ideal scenario is that both you, the candidate and the person who are, who are, who's running this kind of comp discussion and making the decision making should be both looking at objective datasets. And at that point, if you kind of receive a number, it would be great if you're able to situate that number and understand roughly where that brings you. Right. Like I wouldn't be too, too specific, but like if that puts you in the 25th percentile, that's a good thing to know, because that can then become a discussion of like, hey, you know, I've done a lot of research on this. I'm finding myself kind of in the lower, lower ends of where compensation is, and this should not be hostile, right? It can really just be, I'm finding myself kind of, you know, looking at, at similar salaries, looking at benchmarking, and I am sort of in the, in the lower echelons of this. Like, is this a reflection of my performance or is this basically like the firm philosophy and I shouldn't expect this to change? Or are we maybe just looking at different datasets and interpreting this differently? I think that being able to have that objective discussion can actually really open up really, really good dialogue around, you know, things like maybe if you are like a lower performer, that can actually become a real discussion. Whereas if they just offer you bad compensation and you're not talking about it, you know, the, some of the managers might not be super happy with your performance. You're not super happy with the firm, and that's going to cause a lot of discontent across the board. Whereas now, if you can actually have that discussion, say, Hey, I'm being paid in the 25th percentile or, you know, well below the 50th percentile, but I think I'm going above and beyond. I'm getting involved. I'm training new staff. I'm helping us with our recruiting initiatives. Maybe you're getting involved in business development, even things like that. Those are all things that you can bring forward. And if you're not happy with where you're placed in terms of, you know, percentiles of compensation, I think that that's a good opportunity to try and open up a discussion about having like an improvement plan. Right? So people talk about performance improvement plans, PIPs, basically just as things that are, you know, precursors to layoffs and that they're tracking your performance. And if you don't improve drastically quickly, you're going to be out of there. But I think that like, it is a good idea to have a performance plan without it being associated with what a PIP is, with your direct manager, with the person who's doing that evaluation, to understand what concretely needs to be done to be able to bridge that gap between what your expectations are and what the firm's expectations are to be able to get you at the comp that you believe would be fair. Right? I think again, too often, we don't want to have these discussions because it's just someone's anchored to a number based off of something they heard with their buddy. And they're not able to actually have this as a real discussion of like, why am I at X percentile when I think I'm a far greater performer than that? So I hope that being able to have some of these more objective discussions around compensation can take the emotion out of it. I do remember when I was at a big four firm, it was a very teary affair. A lot of people were very disappointed that day in office when comp meetings were happening. And I do want to caveat this advice with just letting you know that like, if you're at a top 50, top 100 firm, this might not be the case. It's still a really good idea to talk about like, is there any way that I would have been able to, you know, come up higher in the salary band if I had performed differently and understand what that looks like. But often in those kind of top 50, top 100 firms, I know in the big four anyways, it's a little bit more of a top down approach where they try to have everyone at a certain level kind of earning roughly the same thing. Which again, I think is a flawed system, but I do understand why it's that case at such large institutions. But if you're at a smaller firm, this is really kind of the benefit of being there is you're going to be looked at as a whole contributor to the firm, right? You can be looked at very individually. And you should take advantage of that and have those discussions just so you can both improve your own performance, align what you're doing with the firm's expectations. Like maybe you're too focused on one area and you're kind of dropping the ball on some of the key competencies of what they expect from you. And so again, once you're able to take the emotion out of these discussions, which I would say in my last job, I was kind of able to do. Like I found like I got a lot more out of these discussions than I ever did before because I was approaching them very, very objectively. And from a mission driven perspective where my goal from that meeting was to leave. And if I wasn't under, like if I wasn't okay with where I found myself within a given pay band, I wanted to understand exactly, exactly, exactly what was expected of me to move up within that pay band or either kind of qualify for whatever the next level or promotion would be. If you're a firm runner listening to this and you want to be able to have this type of objective discussions, you can actually also be the one bringing forward the data. Especially if you know that a discussion with a given employee is going to be very difficult. I think it's a good idea to come forward with objective data and talk to them about it. And again, that takes a lot of the emotion out of it. It just becomes here are the facts, here's where we think you land, and here's where most of the kind of comparable salaries are. And this is the reasoning behind it. So yeah, if you're a firm, I would really recommend trying to get the data to be able to have these objective discussions. You know, I would love to help Big Four Transparency. We specialize in salary benchmarking for accounting firms. And we'd be very happy to equip you to do all of this. And like I mentioned, we dashboard it all out. So it's not super labor intensive for you to be able to work with. So anyways, thank you very much. I think compensation and discussions around performance are very, very, very important. And I think they're a thing and an opportunity that is being missed at a lot of places to help align employees better with their firms. So if you have any thoughts on this, I would love to hear them. Shoot me an email at dom at bigfortransparency.com. But yeah, I hope that this will really contribute to much more productive discussions between employees and firm operators.