As you spend more time in public accounting, you’re almost guaranteed to hear from a recruiter working for a rival firm looking to poach you. Over the course of a five-year career, I’ve jumped firms twice, entertained around ten offers from competitors, and held dozens of chats with recruiters. This makes me something of a job-hopper (and my resume most certainly paints me as a “mercenary,” for better or worse), but I’m a proponent of having conversations with competitors, even if you’re happy in your current role.
In my experience, these offers start trickling in via LinkedIn after you’ve spent about a year in the industry. After two or three years, you’ll likely be inundated with recruiters trying to convince you to switch to their team. On top of being a nice ego boost, these offers can help benchmark your salary and keep your interviewing skills sharp. While simple chats with recruiters are generally risk-free, those actually willing to jump ship to a rival firm should be aware of the common pitfalls and proper way to execute the transition.
Pros of Switching Firms
Salary and title bumps
The most consistent benefit to switching to a competing public accounting firm is that the move includes a bump in salary, a bump in title, or both. There are some nuances that we need to unpack, especially as it relates to title bumps, but for those looking to maximize their salary in the shortest time, changing firms every two years or so provides the highest likelihood of success.
One rule of thumb on switching firms for salary states that the new firm should offer you roughly 20% more than your current salary. This is dependent on location (Is your local market in dire need of accountants, or are you in a saturated market?); market dynamics (Are firms shrinking or expanding? Do employees or employers have more control over market price?); and you individually (Do you have connections at the new firm? Is your resume more or less competitive than your peers’? Are you in a position to negotiate or are you in a position of need?). Considering all of the variables, I would suggest most people not move to a competitor for less than 15%. I’ll explain in more detail in the Cons section below, but in short, you want to consider your entire benefits package rather than just the base salary. Offers below a 15% bump in salary generally won’t compensate you enough for what you give up by moving.
As for title bumps, we need to first understand the hierarchy of prestige among public accounting firms. At the top, we have the Big 4 firms (Deloitte, EY, KPMG, and PwC), which are considered the most prestigious and earn revenues well over $10 billion annually. Below the Big 4 are the Mid-Tier firms (GT, RSM, Forvis Mazars, BDO), which are still well-known and respected, and earn revenues over $2 billion annually. Below this are the large Regional firms, the small Regional firms, and the Local firms. Regional and Local firms are generally only known to people within the industry, and have annual revenues below $2 billion. You can reference the Inside Public Accounting rankings here.*
When it comes to title bumps, hierarchy matters. You are much more likely to receive a title bump if you’re moving down the hierarchy (i.e. from a Big 4 firm to a Regional firm) than if you’re moving up the hierarchy (i.e. from a Regional firm to a Mid-Tier firm). For better or worse, recruiters and hiring managers generally believe that those working in more prestigious firms have better training and more experience with complex situations. If you’re looking to switch public accounting firms, it’s important to remember this dynamic. If you’re moving up the hierarchy, you can ask for a title bump, but don’t expect the request to be granted. If you’re moving down the hierarchy, you can be more aggressive about pushing for a better title.
Building a broader network
This one is fairly straightforward, but worth noting for those planning to stay in their field for the long-term. The best way to build strong relationships with colleagues is to work directly with them. The more firms you work for, the more people you will work with throughout your career. If you’re someone who excels at expanding your network internally or through external conventions and conferences, this may not be an important factor. However, if you work on a team that is often “pigeon-holed” or regularly working on similar projects with the same people, your network can quickly stagnate. Changing firms allows you to meet a new group of individuals in your field and build meaningful working relationships with them.**
Exposure to different systems and methodologies
Every public accounting firm is unique. On the surface, they all look alike, sound alike, and behave alike, but underneath the window dressing, they go about their business in different manners. Any accounting firm that is making hundreds of millions of dollars in revenue each year should be considered successful, and learning how competitors handle their business makes you a more successful professional.
Aside from building career flexibility through exposure to different systems, jumping firms lets you determine which size public accounting firm best suits your work style. For example, I found the Big 4 work environment to be too bureaucratic. It seemed like every task required approvals from your superiors, and even minor changes needed to be documented in triplicate for CYA purposes.*** I was more comfortable in a Regional firm where not every task had an approved process, and you could be creative and flexible in making changes to your workflow. Where you land on the bureaucracy spectrum is entirely personal. If you find yourself smothered by red tape, consider switching to a smaller firm; if you find yourself frustrated by unclear processes, consider switching to a larger firm.
Cons of Switching Firms
Benefits fail to vest or snowball
Despite working in public accounting for over five years, I have never once received the employer match to my 401k contributions. The firms I worked for all had three-year cliff vesting schedules,**** meaning that if I left before spending three consecutive years with the firm, I received none of the matching contributions. I considered this an appropriate sacrifice for two reasons:
- In public accounting firms, matching contributions are usually paltry. It’s common to see a 1.5% employer match on 6% employee contributions. For instance, if I make $100,000, and contribute 6% of my salary to receive the full 1.5% employer match, each year I will contribute $6,000 to my 401k and receive $1,500 as the employer match. After three years, the employer contribution will total $4,500.
- I found it surprisingly easy to negotiate a signing bonus when moving to a competitor firms This offset the employer match I sacrificed by leaving before I fully vested.
If you’re someone who is uncomfortable negotiating a signing bonus, or if you have a particularly large amount of vested contributions, it’s important to weigh the cost of sacrificing those funds.
Additionally, other firm benefits have a tendency to snowball and become more valuable the longer you’re with one firm. If your firm still offers traditional PTO (i.e. you accrue X hours per pay period and are reimbursed for the value of these hours when you leave), switching to a competitor with unlimited time off could mean cashing your PTO before you can accumulate a large stockpile and not receiving a commensurate benefit in return.
Finally, firms offer unique benefits that you may not find at competitors. These can include phone and internet stipends, fitness equipment reimbursement funds, travel and shopping discounts, office equipment, and more. Before jumping ship, it’s important to consider everything you will be giving up, as not every benefit can be replaced.
Reputational impacts
There is no doubt that my resume makes me look like a job hopper. I haven’t stayed with the same firm for more than two years at any point in my public accounting career. While the stigma associated with job hopping isn’t as strong as it was in older generations, it is still considered a “bad thing” among most recruiters and hiring managers. Firms generally spend more than they make on new employees, so hiring managers may be turned off if they think you’ll jump ship before they can make their money’s worth from your labor.
Let me be frank: you will get questions in interviews about short tenures at competing firms. The best way to mitigate the hiring manager’s concerns is to build a (hopefully true!) narrative explaining why you’ve switched companies so frequently. Maybe your favorite partner got a job at the competitor and you wanted to follow her. Maybe your spouse got a job in a new location and you had to move. Maybe the previous firm was just a bad fit with your work style. Whatever the reason, make it something that convinces the hiring manager that you won’t pull the same stunt with them in 18 months.
Finally, I need to mention one of the more unfortunate parts of switching between public accounting firms. Because these companies are led by competitive people with strong egos, and because competitive people with strong egos sometimes get hurt feelings, you might find that your superiors get upset with you for going to a rival firm. Some may show you the cold shoulder, or say rude things, or imply that you won’t be as successful at your new firm. Just recognize this bluster for what it is: a frustrated superior lashing out over something they can’t control. In most cases, they won’t hold a grudge if you don’t hold a grudge, so just ignore their childish behavior and move on. It’s wise to not burn any bridges in public accounting. If your boss wants to torpedo your relationship with the firm on your behalf, so be it, but I advise against initiating that kind of behavior.
Grass is not always greener
Unfortunately, your self-righteous former boss is sometimes right. Sometimes you go to a competitor for all the right reasons, but the situation is simply a poor fit. Maybe your new manager is a miserable lout, or the software they use is outdated, or their metrics for measuring success don’t capture your contributions well. In these cases, the grass is most certainly not greener on the other side of the fence.
If this happens to you, try to resist the urge to label the situation as a “regret.” You’ll still learn plenty from your experience, and in public accounting, there are very few permanent mistakes. There are plenty of paths forward if you find yourself stuck in a tough spot. You can return to your old firm if you haven’t burned any bridges; you can ask your new firm to move you to a different team; you can jump to another new company and roll the dice again. You will have always have options, and it’s up to you to determine which path forward suits your needs best.
Execution of Moving to a Competitor
You’ve decided you want to move to a competing public accounting firm. Congratulations! If you execute this maneuver properly, in a few weeks you’ll be making more money, expanding your network, and starting fresh with a new bundle of branded swag.
There are a number of steps to moving companies (and a few pitfalls along the way), so make sure you understand your goals at each stage of the hiring process. Before you even talk with a recruiter, the most important thing to remember is Don’t say anything to anyone at your current job. If you have a compulsion to tell your colleagues everything about your life, you may struggle here, but it’s imperative that your coworkers and superiors are unaware that you’re talking with a competitor. There is a right time to tell them, and it’s not at the beginning. Coworkers may talk you out a good career move, and bosses may punish you for jilting them, so keep it your little secret until everything is in place.
With that said, I’ll walk through the primary goals, other considerations, and common pitfalls at each step in the process.
Before accepting the offer
You’ve completed your interviews with the rival firm and feel confident they will be a good fit. You’ve spoken with your new boss and managers, and you have a strong idea of what your day-to-day job will look like. They have extended an offer that includes a 20% raise, comparable benefits, and the understanding that you’ll be promoted during the next promotion cycle. You’ve already passed the background check and negotiated for a signing bonus, so the only remaining to-do is signing the employment offer and confirming your start date.
Goal: Make sure everything is in place at your current job and in your personal life so you’re prepared to transition to the new job.
Considerations:
- Determine the minimum amount of time you want to take off between jobs. If you give your current employer two weeks’ notice—which is a courtesy I recommend, but is not required—then the earliest you can start at the new firm is in two weeks. If you would like to take time off for travel or recuperation between leaving your current job and starting your new one, consider how much time is appropriate for you.
- Perform a personal finance audit. This ties in with the first consideration, but if you’re strapped for cash, you may want to start your new job immediately. Alternatively, if you’re flush, you may want to take a trip abroad without having to worry about responding to 200 emails when you return. In either case, it’s wise to determine how much time you can afford to live without receiving a paycheck.
- Pull all personal files and financial statements from your work computer. This includes photos, personal documents, colleague and client contact information, pay stubs, W2s, 401k/HSA/FSA account logins and passwords, etc. You’ll want to have this in your possession before you tell anyone at your current firm in case they terminate you immediately. However, please do not take any files that belong to the company or files that would violate non-compete agreements you have signed. Taking these can make a simple process much more annoying and even litigious.
- Check into healthcare coverage. If you’re taking a long time off between jobs and only have healthcare coverage through your current employer, consider signing up for COBRA. It’s expensive, but it’s better than absorbing the entire cost of an emergency surgery.
Pitfalls:
- Seriously, don’t tell your coworkers anything. Once you have the offer letter in hand, you’ll be feeling giddy. You’ll want to share the news. Tell your mom, tell your siblings, tell your priest, just don’t tell your coworkers.
- I want to reiterate the importance of not taking company property, even by accident. Public accounting firms take their intellectual property very seriously, and even though they won’t catch everything, it’s not worth it to abscond with your favorite spreadsheet. They have an army of very expensive lawyers who love slam-dunk cases.
Leaving your current firm
You’ve accepted the offer from the competing firm and have decided to take two weeks off between leaving your current firm and starting at your new employer. Refreshing! Now it’s time to break the news to your current firm. This is the most awkward stage of the process, but if you execute it well, you set yourself up for success for the remainder of the transition.
Goal: Break the news to HR, your bosses, and your coworkers without sacrificing your relationships. Perform your necessary offboarding activities thoroughly and effectively.
Considerations:
- Prepare for immediate termination. Some firms will immediately terminate you if you announce you’re leaving for a competitor, usually under the guise of protecting company secrets or preventing any conflicts of interest. There is no way to know for certain if this will be the case for you, which is why I recommended securing all of your personal information and colleague contact information before signing the job offer. If you are terminated immediately, in most cases the company will pay you for the remainder of your notice period and rescind your access to company equipment by the end of the business day. While this can be sad if you don’t get the chance to say goodbye to your favorite coworkers, you generally get an extra two weeks of paid vacation. Find that silver lining!
- Prepare for a counteroffer. While some firms make it a policy to never provide counteroffers, some will be aggressive about trying to make you stay. If you have already signed an offer letter from the competing firm, I recommend ignoring any counteroffers from your current employer; there’s a reason you chose to leave, after all. Still, it’s important to prepare for a compelling counteroffer package so you don’t reflexively agree to something you may not actually want. Partners are great salesmen, and it can be hard to say no when your boss offers to pay you more and make everything better.
- Decide on how you will break the news to your team. There is no right way to tell folks, but there is definitely a wrong way. The wrong way involves you pinging a chatty peer, who then tells other folks, and before you know what happened, your entire team knows you’re leaving without hearing it from you. My recommendation is to follow the company hierarchy and tell everyone in person, or via phone/video chat:
- Call your partner first. If you work with multiple partners, call whichever one you’re closest with first. They will usually break the news to HR on your behalf, which saves you time. Specifically ask them not to tell anyone else so that you can break the news to your teammates individually. Partners are usually discrete. Tell HR if your partner hasn’t already. Type up a short email or PDF document announcing your intent to resign. Include today’s date and the last date you’ll be working (the end of your notice period). There’s no need to be verbose or flowery here; you simply want a document on file indicating the dates relevant to your resignation.
- Call your teammates in descending order of hierarchy. Start with any remaining partners, then senior managers, managers, seniors, and associates. Tell any support staff or international colleagues after you’ve told your immediate teammates. Respecting the hierarchy allows you to better control the narrative, since superiors are used to withholding information from subordinates.
- Understand what is expected of you during offboarding. Your managers will want to know the status of any projects you’re working on, and the partners may want to include you in plans to hand off your work to your colleagues. Be helpful, be thorough, and be sincere. It’s your last chance to demonstrate your work ethic to these colleagues.
Pitfalls:
- Not being prepared for immediate termination or a counteroffer. Both of these situations are outside of your control and can catch you unaware. Just knowing how you want to react if they happen is sufficient to keep you from making a serious error.
- Responding in kind to a jealous colleague. If anyone takes the news of your leaving poorly, do your best to put a positive spin on the situation and stay friendly. While it may feel great to use your last days to unleash a series of vicious digs on petty coworkers, there’s no real upside. If someone is rude to you about leaving, just be grateful they showed you their true character before you left.
- Bungling your messaging to colleagues. Breaking the news to your coworkers is awkward and challenging. The good news is you’ll have plenty of chances to get it right. You don’t want to appear too excited to leave, but you don’t want to seem insincere by talking about how great the current job is. In my experience, gratitude is the best chord to strike. Thank your colleagues for teaching you, mentoring you, being fun to work with, or whatever they did to help you.
Starting at your new firm
After a refreshing break from work, you’re starting your new job at your old firm’s competitor. If the move did not include a title bump, you’re ready to hit the ground running. The job should be familiar, even if everything else feels a little different. There’s really only one goal here.
Goal: Make a good first impression on your new team.
Considerations:
- Being a sponge. In the first few weeks at your new job, your team should maintain realistic expectations for your contributions. You’ll want to demonstrate that you can learn quickly and that you can be helpful on tasks that are familiar to you. Things you’ll want to learn in the first weeks include who the power brokers are at your new firm (See: How to Corporate – Soft Power versus Hard Power); how your performance will be measured; and who the important clients are in your book of business. Take this opportunity to work thoroughly and learn the details so that you’re prepared when things get busy.
- Learning about any unique benefits or perks. Yes, employee handbooks are dry. Yes, most of the information is common sense. Still, you can learn a wealth of valuable information in these ponderous tomes, especially about benefits and perks the company wants to highlight. Beyond the handbook, ask your peers what benefits they’ve found helpful. There’s no excuse for leaving money on the table, so make it a point to learn where you can take advantage of the firm’s generosity early in your career.
Pitfalls:
- Talking about your old firm. Your current teammates don’t care how your old firm did things. They don’t want to see you wearing a competitor’s branded apparel. You’re on a new team now, so don’t extol the virtues of your old team.
- Assuming things operate the same way. As I mentioned previously, public accounting firms look and act very similarly to each other, but how they handle their daily operations can be quite distinct. Be willing to ask specific questions about how your team handles their administrative tasks and fall in line quickly. Your managers and partners don’t want to police you over simple things.
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* Please note that these classifications are subject to interpretation. If you think that all Top-10 firms should be considered Mid-Tier, that’s perfectly valid; my categorization is arbitrary and used for illustrative purposes only.
** I do not recommend switching firms exclusively for networking purposes. There are less disruptive ways to make connections with people in your industry than switching firms. Still, this is a benefit that may pay-off down the road.
*** “Cover Your Ass”
**** A three-year cliff vesting schedule means that any employer contributions to your retirement accounts are unavailable to you until you have worked at the firm for three years. For example, if your employer contributes $1,000 per year to your 401k, those contributions will be worth $0 to you until you’ve worked there for three years, at which point you’re entitled to the full $3,000. Please see “How to Corporate – Benefits and Perks” for more detail.