The best of all possible worlds would be to interview with – and get offers…
John Borrowman, CPC
Borrowman Baker, LLC
Gallatin, TN
How many times have you told yourself, “I ought to be making that!” We all think we deserve more; it’s one of the drivers of success. Misreading the market, though, can leave you frustrated for no reason.
When you’re in job-change mode, you naturally think more about comp. Due diligence requires knowing all you can about the pay in that new job. This gets trickier when it involves moving to another city.
Your first pitfall is tying your expectations to what you’ve heard others make in that market. Exaggeration is common, often through rounding up, and pay ranges can creep up in retelling. Unless you’ve seen a half dozen W-2s, take this information with a grain of salt.
Another pitfall is ignoring the distinctions in the job you do. While it’s true that every BV practice performs the same functions, each practice divides them up in different ways. Some parts of your job might not be parts of someone else’s, just because they carry the same title. Also, certain engagements are billed at higher rates – and produce higher profits – than others. Those who execute and get that kind of work out the door will have more highly valued experience.
You know (or you should if you don’t) that the compensation you earn is determined by the profits you can make for your employer. It’s nothing more complicated than that. That’s where your focus should be.
First, investigate your billing rate in the market. No one has any motivation to fudge that, so what you’ll hear from others is usually reliable. If you’re interviewing, you can ask the employer for their sense of that rate. Where would he peg you? What would his clients pay?
Next, consider the number of hours you could reasonably bill in a year. You should already know what it takes to produce what level of chargeable hours. Don’t forget to factor in your own personal choices about work/life balance. Again, get information during an interview. Ask about both the firm’s expectation for chargeability and the upper range you could do, assuming the work was available.
Multiply the bill rate by the number of hours. Divide by 3 to 3.5, and you’ll have a very rough idea of what an employer would like to be able to pay for someone doing that job. Does that mean they won’t go above that number if they see the value? Or below, if they could? No.
It’s merely a way to look at the compensation that doesn’t begin with hearsay. And it helps you make a more informed decision.
John Borrowman
