Do you know what percentage of people who enter public accounting make partner at a firm? I didn’t until last month, when a speaker at a conference said that it was approximately 1%. That seemed far too low to me, but a quick Google search confirmed that the average was 1%-2% (though it can be as high as 5% at some firms, particularly smaller ones).
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I’ve been grappling with this ever since. It makes some sense that only a small portion of people at a firm can be its owners and leaders, and that not everyone who joins the profession is cut out for the role. From that perspective, 5% or 2% or even 1% seems perfectly reasonable, so that’s not why the statistic troubles me.
My issue is that partnership has long been held out as the ultimate reward of the profession, the place where all the hard work at the start of your career pays off — the thing that makes it all worth it. For instance, one major justification for the comparatively low entry-level salaries that the profession pays has long been that if you stay long enough, you can reap big rewards as a partner. But the people who can’t or don’t want to make partner are starting off with the same low salaries, and doing the same 80 hours or more a week of grunt work during busy season; where’s their reward?
And when discussing the thin bench of future partners at firms these days, it’s common to say that the younger generations don’t want to wait until they’re old to reap the rewards of their career — but that assumes they can gain the partnership that unlocks those rewards, and at best only one in 20 of them can (or at worst, only one in 100).
The issue isn’t that not enough people are making partner; it’s that the advertised rewards of the profession are predominantly on the back end, and upwards of 80% of young accountants won’t see them. The profession needs to do more to distribute those rewards through the average accountant’s work life.
To be fair, there are firms out there that are already doing this. In just the past year, starting salaries across the profession jumped to the point where they’ve almost bridged the gap with other professional services and business careers, while large firms like BDO USA and Grassi have created employee stock ownership plans, and firms like Eisner Advisory Group and MarksNelson have used some of their private equity funding to enrich much broader portions of their staff.
But the profession as a whole still needs to distribute the rewards of a career in accounting more evenly across that whole career, and — perhaps more important — to stop heavily promoting a role that most of its members will never play as the sole gateway to financial success in the field.
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