February 10, 2022

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Pay transparency

The movement toward more pay transparency has a lot of momentum right now, with new laws on the books in Nevada, Connecticut, and one coming to Rhode Island next year.

But those all pale in comparison to what’s coming in just a few months:

New York City will require employers to list the minimum and maximum salaries on job postings starting this spring, a mandate that is already drawing opposition from business groups.

Under a new city law that takes effect May 15, companies will need to disclose the expected salary range that an employer “in good faith” believes it would pay for each advertised job, promotion or transfer opportunity.

Nearly every employer hiring in the city would be covered by the law; only those with fewer than four employees or staffing firms hiring for temporary workers are excluded. 

[…]

Kathryn Wylde, chief executive of the Partnership for New York City, said the measure adds to the perception that New York is unfriendly to business.

Wait, there’s a perception that New York City is unfriendly to business? The U.S. city with the most people? One of the wealthiest U.S. cities where some of the world’s most valuable companies have thousands upon thousands of employees? The city countless people move to for business opportunities? The city that has small businesses on virtually every street? That New York City? Who has that perception? 

But never mind that. As we talked about last time, until quite recently if someone wanted to know if they were fairly paid for their job, they had to obsessively crawl an industry website or crowdsourced database. With some states and cities now requiring businesses to disclose pay ranges (either proactively or on request), job seekers in those places no longer need to wonder what a job pays or go through the whole interview process to find out. Not to mention that these laws will help eliminate entrenched pay inequities that have persisted for decades, and now in the largest job market in the U.S., no less. Things are definitely moving in a direction that gives job seekers and employees an advantage.

But, contrary to popular belief, these laws are not zero sum. They don’t have to be a disadvantage for businesses. With some wise counsel from a shrewd advisor like yourself, a business currently not subject to a pay transparency law could proactively disclose salary ranges for its job openings to test its current compensation offerings. It will take some trial and error, but eventually a business will find the right balance between paying the right amount for the right jobs, and that will attract the right candidates. Candidates that most other employers—that don’t disclose salary ranges—want. 

Do accountants need agents?

In my experience and observation, many accountants are always passively looking for another job. They may be perfectly happy in their current job; with the salary, the people, the work, their boss. But there’s a lot of interesting jobs with interesting companies doing interesting things that will catch an accountant’s eye. They may peruse a bit, but ultimately not do anything about it. Then a different interesting open position hits their inbox cold from some nameless recruiter that they’ve never heard of, and next thing you know, they’re in a tight conference room talking about their career path with a perfect stranger. (Or not. Email is easy enough to ignore. Just go with it.)

Now, what’s a little bewildering about this whole process is that recruiters will talk a lot about helping you land your dream job and listen sincerely to what you want to do with your career. It always sounds good, and you would be forgiven for thinking that they are working for you, the candidate. But they aren’t working for you, the candidate. This is fine. This is the arrangement. That’s how the recruiting firm gets paid. Some recruiters are very transparent about this, others less so. There may be occasional exceptions to this model, but most of the time, the candidate is not the client.

But now, for tech workers at least, there’s a firm that is making the candidates their clients: 

Free Agency, a startup co-founded by Sherveen Mashayekhi and Alex Rothberg in 2019, hopes to capitalize on the mania for startup talent. The startup thinks tech workers could benefit from the same kind of advocacy Hollywood or sports stars receive from their agents. Free Agency focuses on providing representation to mid to C-level candidates across product, engineering, marketing and design. To date, the company estimates that it has helped candidates set up 4,700 interviews and secure $200,000,000 in negotiated compensation for total salary offers.

As one example, Free Agency helped a client secure a senior director of Product role worth more than $900,000 in total compensation, a 53% jump over the client’s previous pay package. In the process, the company arranged 21 interviews with companies like Snapchat, Coinbase, and Lyft without requiring the client to send out a single application or email during his job search.

“We used our network and job search engine to get him interviews while he slept,” Mashayekhi wrote in an email.

For the trouble of getting the interviews while their client slept, Free Agency takes 5% to 10% of the candidate’s first-year salary. 

So, could this arrangement work for accountants? I think most accountants could benefit quite a bit from some career management and advocacy. I’d argue that most people struggle to advocate for themselves, especially when it comes to compensation. Plus, who wouldn’t want someone working for them whose sole purpose is to get the best opportunities and pay for you with no hesitation or shame? I could use someone like that. 

Anyway. This especially works if accountants remain a group of passive job seekers and/or continue to quit their jobs without hesitation; the superagents can always dangle something interesting hoping that their client wants to take a new job with a jump in salary, equity, and whatever else. 

Although. The circumstances might be a little too good right now. It’s unlikely that accountants—or tech workers, for that matter—will quit en masse forever. Feels like a short window. But a window nonetheless.

Mafia accountants

Now this is my kind of academic paper:

We investigate if organized crime groups (OCG) are able to hire good accountants. We use data about criminal records to identify Italian accountants with connections to OCG. While the work accountants do for the OCG ecosystem is not observable, we can determine if OCG hire “good” accountants by assessing the overall quality of their work as external monitors of legal businesses. We find that firms serviced by accountants with OCG connections have higher quality audited financial statements compared to a control group of firms serviced by accountants with no OCG connections. The findings provide evidence OCG are able to hire good accountants, despite the downside risk of OCG associations.

It makes sense. For starters, I have to imagine that OCG clients pay well. There are probably fun perks, too. But from a practical standpoint, the most successful accountants don’t simply crunch the numbers; they give clients what they want. 

We frequently talk about niches for accounting firms and I have to imagine there’s a sweet spot for the OCG niche. An OCG client wants an aggressive accountant but also a very discreet one. Knowing how to take advantage of accounting and tax rules and still fly below the radar (and not crow about your talents to the Wall Street Journal) is exactly the set of skills the members of the Legitimate Businessman’s Social Club are looking for.

Still. As the abstract mentions, there are downsides to the OCG niche. As anyone who’s seen The Untouchables knows, the accountant is probably the person who authorities can turn state’s witness. Proceed accordingly.

Fresh from Gusto

Gusto has launched a new product update series called the Quarterly Scoop. Join us Wednesday, February 23 at 11am PT for product updates, stories from our vibrant accounting community, and the latest industry trends. 

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Caleb Newquist Caleb is Editor-at-Large at Gusto. In 2009, he became the founding editor of Going Concern, the one-of-a-kind voice on the accounting profession, serving in the role for 9 years. Prior to Going Concern, Caleb worked as a CPA for nearly 6 years in New York and Denver. He lives in Denver with his wife, two daughters, and two cats.

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