Larry Williams

A Journey of 1000 Miles

DECEMBER 3, 2015Justin Lloyd, madeline russell, kofi saahene, Moroni Williams, Irene Wong

MBA 6623

Introduction

Larry’s hard work and dedication finally paid off when he began getting “We want to extend you an offer” letters from four different firms: Acme LLC, R&H Cube, FruitLoop Accounting, and one of the prestigious Big Four accounting firms, YES Consulting. However, Larry was at a critical point in his life. He still had a dream of receiving a PhD and was unsure he would ever accomplish that if he accepted a job. Larry’s decision was difficult. Should he accept a job, wait for a better opportunity, or should he pursue his PhD?

Background Information

Larry Williams, an international student at Idaho State University, first came to the United States in August 2013 from Lagos, Nigeria in hopes to achieve a PhD in Public Administration. He came to the United States for education because of the opportunities that could arise in the future. It was a cultural shock to Larry when he first arrived. The new studying environment at an American university posed a big challenge. The format of professors giving lectures and presentations was challenging. Sitting at the front of class and paying close attention was important to stay current as material was presented. Additionally, being such a long distance from family and friends was difficult and he dealt with homesickness.

The American culture presented challenges in its own respect. In May 2015, upon completion of his undergraduate degree in Accounting at Idaho State University, his next step had been the preparation to take the Certified Public Accountant (CPA) exams while working towards his Master of Business Administration (MBA) degree. He enjoyed going to school and believed that an MBA would make him stand out among other candidates when searching for a job or continuing his education. He began filling out multiple applications proactively for companies around the United States. He received a few offers from the companies and now he had to decide what to do next in his life.

Acme LLC

The first offer Larry received was for an audit associate position at Acme LLC. It was a private accounting firm located in Denver, Colorado. Acme LLC was a very client-oriented company, and it strived to offer valuable auditing services to its clients. Larry was concerned Acme did not have a formal, standardized training program, but instead utilized one week of hands-on-training during the first week of employment.

From the interview with the consulting partner, Michael Loveland, Larry was told that the salary would be $46,000 with a $5,000 bonus after passing the CPA exams. Other benefits would include reimbursement for relocation expenses, CPA membership fees, and travel costs to work related conferences. Larry was excited about the 20 days paid time off he would receive at Acme. He would use this time to visit his family and to explore other vacation areas around the US. Acme also provided an optional 401(k) retirement plan. For health benefits, Acme LLC would offer 100% coverage on medical insurance, and 50% coverage on dental and vision insurance, and a life insurance plan after working with the company for a year.

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As an audit associate, Larry would go to the client’s office on the weekdays to perform the service, but he could work from home on the weekends. Ideally, Larry would only need to work 40 hours a week, but he would need to work extra hours during the busy seasons. Luckily, Acme LLC allowed Larry to average his work weeks by working fewer hours one week if he had worked more hours on a previous week. This position was exciting for Larry, since he would get to work with many new clients. It would be a great networking opportunity and possibly a stepping stone for a better job in the future.

R&H Cube

The second job offer Larry received was a tax associate position at R&H Cube. This was a full service accounting firm located in Salt Lake City, Utah. Larry would be working on average 40 hours per week if he accepted the offer. Its primary client base was small to mid-size businesses and their executives. R&H Cube strived to provide outstanding customer service to its clients. If Larry accepted the offer from R&H Cube, he would have the opportunity to attend a one week training workshop held by its larger affiliate firm BDO before the employment start date.  BDO was a large international firm that would provide Larry excellent training prior to his first public accounting experience in the US. Larry was excited for what other continuing education and training opportunities BDO might offer in the future.

From the interview with Donald J. Cagle, the manager of R&H Cube, Larry was offered a starting salary of $58,000 per year with incentives including 100% medical and dental insurance. Larry would receive a $2,500 bonus in addition to membership in any professional organizations he would like to be a part of as soon as he passed the CPA exams. Larry would also receive 16 days paid time off in addition to 10 paid holidays. Along with these incentives, Larry could opt into a 401(k) retirement plan where the firm made an annual 3% contribution of his annual salary to the account after the first 1,000 hours worked.

Although Larry liked tax work, he had a few concerns. The position would be monotonous and was restricted to a limited scope of practice. He was also concerned that there would be little internal growth or promotions available.

FruitLoop Accounting

The third offer Larry received was a corporate accounting intern position at FruitLoop Accounting. FruitLoop Accounting was a family owned and operated business located in Chicago, Illinois. The work schedule at FruitLoop Accounting was firm, and Larry would work 40 hours per week in the office. Several of Larry’s family members lived in Chicago. Frankly, the consistent work hours coupled with proximity to family members and the work life balance these benefits would offer were the big sell for FruitLoop as the compensation was far from par when compared with the other offers. Larry would be paid on average $24,000 annually as well as medical and dental insurance, which would be provided at no cost. Other voluntary benefits such as vision insurance, supplemental life insurance, and a 401(k) retirement plan were available.Larry had some serious concerns regarding this offer. This position was classified as a one year internship. However, Joann Jordan, the Director of Human Resources, explained that most of the

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internships turned into full-time employment after the internship ended. Larry felt uncomfortable about his job security since employment after the first year was not guaranteed. Also, the internship salary was substantially less compared to the other offers Larry had received. Larry felt work life balance and more time with his family were very important, but he was not sure at what point the financial opportunity costs would outweigh those benefits. In addition, Larry did not see himself working at FruitLoop in the long term because of the distasteful management style. YES Consulting

The fourth offer came from a prestigious, “Big Four” accounting firm in Houston, TX. This Tax Technology position was in a small new group that offered data analytics and technology services for large clients. This group mostly worked with YES Consulting’s tax group to provide add-on modules to clients’ existing tax software in order to quickly and accurately calculate difficult tax questions including asset depreciation and location, stock options, etc. The firm's profile would look great on Larry’s resume and the pay and benefits were good. The offer was for a base pay of $54,500, included a sign-on bonus of $2,000, and a relocation reimbursement of $1,000. YES Consulting also offered a $5,000 bonus to employees when they complete the CPA exams, which Larry planned to complete within the first year. The firm also provided comprehensive dental, medical, vision, and life insurance benefits. However, Larry knew he would be required to pay 20% of the premiums for health insurance at YES Consulting where he would not be required to do so for one of the other offers. YES Consulting also provided a 3% 401(k) match after one year of employment. After 5 years of employment, Larry would be eligible for YES Consulting’s defined benefit retirement plan. Larry would have 16 days of paid time off initially, and these days would increase approximately every 3 years. Larry had hoped that with the excellent reputation of the firm, coupled with all of the contacts he would make in the oil industry that surrounds Houston, he would soon be able to leverage himself into his long term goal of a position in the oil and gas industry.

While the position clearly had a lot to offer, Larry had several concerns. After talking to several classmates and accounting professionals/mentors, Larry realized that during 4-6 months of the year he would most likely be required to work 60-70 hours a week and his work life balance would suffer. Of the managers that had interviewed Larry, Dennis Godfrey, had mentioned that YES Consulting was solely salary based. Larry would not be directly compensated for all of the overtime hours, however, he would be compensated somewhat with a year-end bonus. The word in the profession was, “You’ll be a slave at a big four firm for four years and then you can have whatever job you want.” Another concern Larry had was that while the cost of living on the outskirts of Houston was relatively low compared to the Denver and Salt Lake City locations, the downtown area where the YES Consulting office was located was extremely pricey. Larry would be forced to choose between purchasing a home on the outskirts of Houston and spend 2.5-3 hours per day commuting between home and work or, spend a significant amount of his income renting a small apartment downtown and use the tram.

Waiting for a better opportunity?

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Finding a dream job could be time consuming. The four job offers that Larry received were great, but none of them met all of his expectations. Larry would love to wait for a better job offer that met all of his criteria for a dream job. However, being an international student, his choices were limited. If Larry chose to get a job, he had to get a job offer within three months after graduation and it had to be a full time position. He can only work for companies that are willing to sponsor foreigners.  His employment is limited to one-year; after which he will need to apply for an H1B Visa to continue employment in the United States.

Larry did have a phone interview with Debra Nathan, the interviewer at Awesome Accounting and it seemed that she saw him as a favorable candidate. The interview with Debra was for an audit associate position. They had discussed the excellent salary, benefits and compensation, and paid time off of that position. At that moment, Larry knew that this job offer was his first choice, but he had not heard back from Debra after the phone interview. Larry could ask all four companies for more time while waiting to hear back from Awesome Accounting. However, he knew that the candidates from the waiting list from the four offers were desperate to take one of those positions. It was 2.5 months into the 3 months’ period at that time. Although it would be ideal if Larry had more time, waiting for a better opportunity just did not seem possible in this situation.

Getting a PhD?

It was Larry’s dream to get a PhD in Public Administration. He liked the additional opportunities the advanced degree would offer. Also, he had thoughts of returning to his home country and becoming active in politics. The additional education would likely be an advantage to his resume and character for future goals. It would take him up to four years to complete, depending upon the university to which he would be admitted. Getting a PhD would mean more expenses during the time of study while only earning a moderate income. However, the degree would likely mean a significantly higher salary once complete. Larry did not have any financial problems that would prevent him from seeking a PhD, but getting a student loan to help pay for unforeseen expenses during that time could weigh upon his ultimate decision.

Personal Influencing Factors

Evaluation of Locations

The City of Denver was slightly smaller as compared to Chicago and Houston but slightly bigger than Salt Lake City. The city also had a relatively low crime rate and low cost of living when compared to the larger cities. However, it would be more expensive than Salt Lake City. Denver also boasted a large Nigerian community which would be a big advantage to Larry. Denver also had the lowest crime rate between all the cities with an index of 381.6. With a great number of firms and a robust economy in and around Denver, Larry could retain the possibility of landing a better job in the future.

Chicago, the biggest city among the four choices, had the perk of living with family, which would cut down on living expenses. There was also a subway system to reduce transportation expenses. With public transportation operating around the clock, he would not have any trouble

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getting to places he desired. The crime index in Chicago was slightly higher than Denver at 485.2. With a lot of companies and accounting firms in downtown Chicago, Larry stood a very good chance to move between jobs as he wished.

Houston, the second largest city among the four options, had a robust economy and the sizeable international community made Larry fell at home. The average cost of living was very high but it had a well-developed transportation system in the city which made the commute to work very easy. With the climate similar to that of Nigeria, Larry intended to participate in many outdoor activities if he accepted the offer from YES Consulting. However, the crime rate in Houston was the highest at 538.9 which was a worry for Larry.

Salt Lake City was the smallest city among the four choices. It had a more relaxed atmosphere as compared to the other three options, as well as the lowest cost of living. Accommodation would be very affordable and it had a moderate connection for the public subway and bus system. The job in Salt Lake City was also the highest paid job among the options, however, being a tax associate would require Larry to work extra hours during tax to live in the United States. Larry felt that Salt Lake City would be a nice fit, but was shocked to find that the crime index was even higher than Chicago at 523.5.

Goals

Larry’s short term goals included passing his CPA and to practice for some time as an associate. He then intended to rise through the accounting profession to become a manager and then a partner in the medium and long terms, respectively.

Personality

Larry preferred to socialize with friends and family during the weekends and major holidays. He was very outgoing and had great interpersonal skills.

Job Satisfaction

All the jobs were mostly in line with what Larry studied in school with the exception of the offer from YES Consulting. This job was basically more of an IT related position.

Now What Should Larry Do?

Living in the small college town of Pocatello, Idaho Larry would have to relocate regardless of his choice. He prefers a shorter commute time to the office, but knew that in the larger cities of Denver, Houston and Chicago there would often be bumper to bumper rush hour traffic. All of his options offer public transportation, but would mean longer transportation times. The benefit of living in a bigger city for Larry was the larger airports offer cheaper flights to visit his family. The rent in Denver and Houston were higher at $1,305 and $1,317 respectively. Salt Lake City offered rent at $864 on average. Living in Chicago would be the least expensive option for Larry because he would be able to live with family.

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On one hand, Larry was overjoyed with all of the offers that he had received so far. On the other hand, there were drawbacks associated with each offer and the alternatives. It would be nice if he had more time to think about the job offers and other alternatives. However, he was under pressure to make a decision before the 3 months’ period ending soon.

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