Debunking 5 Myths About the Benefits of Private Industry

Ryan Olstad, Research Associate

There’s an unfortunately common idea among accountants that public accounting is just a source of 2-6 years experience used to eventually obtain a job in private industry. If you are looking to make the switch from public to private, allow us to debunk the myths that might be motivating you:

Myth 1: Private industry offers a better quality of life
One of the biggest misconceptions about private industry is that it gives its employees a much better work-life balance. The stereotype of public accounting’s harsh workweeks mainly stems from the Big 4 whose employees average 60 hours a week, a number that grows even larger during busy season. To be fair, private accountants work an average of 50 hours a week (via LedgerLink) which is less than Big 4 employees, but public accountants can easily work weeks even shorter than that. Our clients (national, regional, and local firms) only work their employees about 220-240 hours of overtime per year, averaging out to 45 hour workweeks. Therefore, a public accountant looking to work fewer hours would be better suited changing firms rather than moving into private industry.

Myth 2: Promotions and ultimately higher pay are more attainable in private industry
Many professionals who convert from public to private take an initially lower salary with the hopes of ascending quickly and making more money; however, public accounting offers a much clearer path to promotion. In private industry, the hierarchy of positions and path to CFO vary greatly by company, with some even earning the title from a sales or marketing background. Public accounting has a very clear path that is relatively consistent across firms, using titles such as “experienced” and “senior” to create even more distinction between positions. CPA firms have recently had an increased number of retiring partners and a shortage of people with enough experience to replace them, meaning that public accounting offers a very good opportunity for ascension into high positions in a firm.

Myth 3: Private industry is growing rapidly
With the recent rise in the stock market and the now growing economy, it’s reasonable to believe that private industry is growing faster than public. Actually, public is growing faster. CPA and public accounting professional compensation are expected to rise 5.3% in 2016 (via CFO). At the same time, private industry accounting pay is only growing slightly more than 4%. So, although private industry is growing, public accounting is growing faster.

Myth 4: Day-to-day work is easier in the private industry
This myth might technically be true, but for the wrong reasons. Private industry’s day-to-day work is easier because it’s repetitive. Corporate accounting only deals with internal programs while public accounting handles diverse clientele. The variety of work in public accounting is not only beneficial for professionals but also impressive on a resume, giving public accountants a competitive advantage in the job market. Switching to private accounting just for easier work is a very consequential decision.

Myth 5: Private industry treats their employees better than public
Similarly to Myth 1, this belief stems from Big 4 firms who force their employees into soul-sucking workweeks with low pay and no overtime. Also, similarly to Myth 1, this is solved with a move to a national, regional, or local firm, many of whom pay overtime and offer very fair hours. One rarely considered yet very important difference between public and private is the role that the professionals play themselves; public accountants earn revenue for their firm with each hour that they work while corporate accountants are paid to perform a chore. Public accountants make money while corporate accountants merely handle it. Sure, corporate accountants can earn stock in their company for good performance, but that is only valuable if the stock grows. This psyche-damaging notion is an inescapable side effect of working in private industry.

About Premier Financial Search
Premier Financial Search is an industry leader in the staffing of accounting and finance professionals. Our experienced staff are experts in working with accountants from a variety of professions including Public Accounting, Business Management and Private Industry.

Since 2001, Premier Financial Search has been working with the Top National, Regional, and Local CPA firms in major cities across California, Florida, Illinois, Louisiana, Michigan, New York, North Carolina, Ohio, Oregon, Texas, and Washington. We also work with Business Management Firms and Entrepreneurial Businesses in California.

To contact Premier Financial Search, call us at 661-799-0101 or email us in confidence at [email protected].