It is essential to consider your early-career experience as an INVESTMENT in future earnings. Like any other, the investment you make in your career produces a return (or ROI). For accounting/finance professionals, working for a Big Four (or top tier) public accounting firm is the best investment you can make out of college.
If you want to maximize the number of opportunities available to you and the amount of money you earn, you absolutely must consider the following:
What is the minimum time I should work in public accounting?
Do I need to pass the CPA, and if so, should I complete the exam before leaving public accounting?
What is the most strategically advantageous time to explore opportunities outside public accounting?
I will provide answers to these questions but am obligated to express that I understand that every person has their own unique motivations, aspirations, and interests. There is no one size fits all career path.
In this nexus, we find the Paradox of the Victory Lap. What I am about to say is controversial, but it is true:
Unless you fully intend to stay in public accounting until Manager, there is no advantage to working a busy season at the Senior level. In many ways, it is a bad career decision.
The value of "getting a year of experience as a Senior" is an illusion widely advertised by public accounting firms to get one more year of slave labor out of its Associates. The truth is that the opportunities outside of public accounting available to 1st-year Seniors are (almost always) identical to those available to 2nd-year Seniors.
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ø The rule of thumb is that you should, at minimum, complete two full business seasons before you leave public accounting. By today's standards, doing this will earn you a Senior-level promotion.
ø I never have and will never encourage someone to leave public accounting before they have achieved these two things. NOTE: There is an important distinction between EARNING a Senior promotion and RECEIVING a Senior promotion (I'll explain later).
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ø Getting an accounting degree, investing hundreds/thousands of hours of your time in public accounting, and NOT getting your CPA is akin to walking from NYC to Philadelphia just to see the Philadelphia Art Museum … and not taking a picture with the Rocky statue.
ø Passing the CPA is a painful task, but it is 150% worth it, regardless of what direction you think you want to take your career.
ø In most instances, YOU DO NOT NEED TO PASS YOUR CPA WHILE IN PUBLIC ACCOUNTING. The long hours and multiple busy seasons associated with modern public accounting make studying and passing the exam extremely difficult. Most enlightened organizations understand this. So long as you are persuasive in your conviction to pass the exam, most companies will not hold this against you. On the contrary, they will encourage you to get it done and provide you with the time and support you need to get the CPA done.
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UNLESS YOU ARE CERTAIN YOU WANT TO STAY IN PUBLIC ACCOUNTING UNTIL MANAGER, the most strategic time to begin looking outside of public accounting is once you have:
1) Completed TWO full busy seasons.
2) Earned or obtained the Senior Associate promotion.
To illustrate, consider Jon Snow and Walter White. They both started in KPMG's October 2020 start-class with a $65K base salary. They both work through the 2020 and 2021 busy seasons; they are told they will be getting a Senior promotion in March 2022 and that it won’t become official until August 2022. In October, they will get a base salary increase to $85K.
Jon Snow started exploring opportunities this summer (2022) and secured a starting base salary with ABC Co. for a Senior (Whatever) role. His starting base is $100K + 15% bonus.
Walter White decides he wants to do a "Victory Lap" at the Senior level and begin exploring opportunities in the summer of 2023. Walter works 60+ hour weeks through March of 2023 and finds out that he will be getting a pay increase to $92K in October 2023. Next summer, Walter will be interviewing for the same positions that Jon was a year earlier. He secures a Senior (Whatever) role with a starting base salary of $105K + 15%.
Jon and Walter both got out of public with Senior-level positions and six-figure salaries … but from a strategic perspective, Jon is the winner for the following reasons:
If you want to be a Manager in public accounting … none of this applies. However, if the Manager path is not for you, know there are strategically better times to leave public accounting than others. I am not knocking people who have already completed a busy season at the Senior level. However, the formula remains the same: Short of the Manager promotion, the ROI on years 3-5 in public accounting is immaterial.
Also, know that you will not find a Recruiter more capable of helping you find a great opportunity than me. I have made a career by helping public accountants navigate through the first (and arguably most important) career move after public accounting.
While Walter was effectively repeating the same busy season he did in 2022, Jon was building EQUITY, gaining INDUSTRY EXPERIENCE.
Walter worked 25-30% more hours than Jon … as an external auditor. Jon worked fewer hours WHILE gaining dynamic and valuable industry experience.
Sure, Walter started with ABC CO. at a base salary higher than Jon's … but Jon has a full year of equity with the company and will be getting a raise above Walter's starting base. Jon will also be a whole year closer to promotion.