Saturday, 18 July 2015

Why do CA's not get high pay packages despite CA being such a tough course?

A simple law of economics states that when the supply of a product increases over its demand, its value falls. Similarly, when the demand of the product rises over its supply, its value increases.

Now look at a Chartered Accountant as a product. Or to put it in better words, try to imagine a CA's service as an item for sale in the market. If there will be a huge number of suppliers, the value or the return that a CA may get for his service will reduce due to market forces. Similarly, if there are very few suppliers of a type of service provided by a CA, the value will go up.

Considering the population and the drive towards higher education in India, the number of people passing the CA exams is increasing year by year primarily because of the growing number of students attempting the exams every year. This clearly shows an increasing supply of people with a CA degree in the economy.

Unless you are at an influential position in the Institute's Examination Board, you may not be able to control the number of people who pass the exam every year. So let's take that factor away and think of what you can do to increase your value as a CA. Your services or the product offering (you) will have to be better in terms of performance and efficiency when compared to other competing products (other CA's) in the market. You could consider the following few aspects of your service that you could improve on and stand out from the other CA's:

1. Specializing in an area of practice related to the CA field such as direct taxation, indirect taxation, international taxation, transfer pricing, forensic audit, and focusing n becoming an expert at that one job that you may do better than most other CA's in the industry.

2. Polishing other aspects that package the product i.e. working on your communication skills and overall personality than just knowing your subjects well. At the end of the day, you will be dealing with people who, a lot of times, may judge your intelligence on the basis of the way you communicate or present yourself. Work on those aspects, too.

3. Being a top scorer (rank holder) or have some other achievement that sets you apart because even in the ICAI's campus placements, the rank holders get, on an average, higher packages that the others.

I'm sure that not every engineer from IIT gets an extraordinarily high pay package. Only those who outshine their peers in some way do. Why should it be different in CA?

Also remember that the state of affairs is good because such market dynamics would force you to keep improving your knowledge and skills to remain in the market. It is unfair to assume that three years' of hard work should be enough to serve your interests for a lifetime. Continuous effort and improvement needs to be the objective.

Hope this answers your question.

No comments:

Post a comment

We would love to know what you have to say about this information.