Posted by Robert Half on 27 May 2014
UK employers recognise the value that experienced accounting and finance professionals can bring to their teams. Not only do they provide financial management expertise, but such individuals can offer important strategic insight, helping organisations to chart a path to growth. So in a rapidly improving economy, the need for accounting and finance specialists is strong, creating various opportunities for professionals working in the sector.
However, there is a problem. Such is the level of demand from hiring organisations that there simply aren’t enough skilled and experienced professionals to go around. Employers are being forced to compete for the top talent, offering an advantage to those who can afford the most attractive salaries and benefits packages. Organisations unable to afford to pay the top rates will struggle to hire the best-skilled candidates.
Why are accounting and finance salaries increasing
In a study conducted by Robert Half, 87% of finance leaders surveyed said they are experiencing challenges in finding suitably qualified workers. Staffing shortages have the inevitable effect of inflating pay, since employers are willing to pay more to attract the top talent. Similarly, they may be prepared to increase the wages of their existing employees in order to prevent them from leaving. This is what is being seen in the accounting and finance sector at present, with employers using pay as a recruitment and retention tool.
Some 42% of UK employers surveyed by Robert Half expect to boost base salaries this year, while 26 per plan to offer bigger bonuses to their staff. Among those planning to increase pay, the average rise will be 6.1% - a not insignificant amount. This is nearly four times the rate of inflation, highlighting the level of the skills shortage in accountancy and finance. Employers are desperate to bring in people who can drive their growth plan, and in order to do so, they are stretching their budgets further.
Salary inflation also occurring overseas
Salary inflation is not a phenomenon restricted to the UK either - many other leading nations are witnessing the same thing. In China there is huge demand for accountancy and finance professionals at present - not surprising given the rate of growth being seen in the nation's economy. Robert Half research revealed that 70% of firms will pay more to keep hold of their best staff in 2014, and 61% will offer more attractive bonuses.
In Hong Kong (69%), New Zealand (60%) and Brazil (58%), the majority of employers are aiming to retain their top talent with bigger salaries, while 43%t of German and 28% of French finance chiefs are intending to do the same. Among those employers willing to offer higher pay, the biggest rises are set to be seen in China (13.6%), Hong Kong (11.4%) and Brazil (10.8%).
Some UK professionals may look to take advantage of demand for accounting and finance skills in these jurisdictions by securing a job overseas. Individuals with western European qualifications and experience are highly regarded internationally, meaning there are often opportunities to work abroad.
What should employers do?
If employers want to recruit the best people, they have little choice but to offer more attractive pay and benefits packages. Where they are unable to compete effectively with their rivals on base salaries, employers need to ensure they offer flexibility, responsibility, good promotion prospects and career development opportunities.
Phil Sheridan, senior managing director at Robert Half UK, said that to retain business critical staff, companies need to pay competitively, as well as offer a host of other benefits, such as flexible working hours and extra holidays. "With organisations competing for a limited talent pool, finance professionals are in high demand, with many candidates receiving multiple offers," he explained.
"Businesses that are unsure about the different types of remuneration, benefits and/or salary bands, should look to industry salary guides as a benchmark," Mr Sheridan urged. This can help them meet the expectations of professionals, without paying over the odds for resourcing.
The Robert Half Salary Guide provides unique insights into salaries, remuneration packages and current recruitment trends for accounting and finance, financial services, technology and administrative positions across the UK. This information can be used to help organisations make suitable pay offers, and also to show workers where they currently sit on the pay spectrum.
Earning potential in 2014
Pay inflation is being witnessed throughout the accounting and finance sector in 2014, as organisations compete for the best staff. But demand for certain roles is particularly high - with financial analysts, risk and compliance professionals, management accountants, financial business partners, cost accountants and credit controllers among those required.
Companies are looking for experienced analysts who can guide expansion plans by identifying data trends and modelling various scenarios. Last year, financial analysts could - as a national average - expect to earn between £35,500 and £60,000 if they were working for a small business, but average salaries are projected to rise by 1.3% to £36,250-£60,500 in 2014. Salary inflation of 2.0% is expected in larger organisations, with candidates earning between £40,250 and £61,750 on average.
Demand for risk and compliance professionals is rising due to the growing regulatory pressures businesses are facing. Professionals with risk and compliance-related backgrounds - including AML requirements and privacy/disclosure requirements - can expect to see significant increases to their base salaries in both small and large organisations. Compliance managers are projected to earn between £42,750 and £62,250 in SMEs during 2014, up by 3.4% on last year, while those employed by large organisations should see a 3.2% rise to between £48,500 and £65,000.
With companies relying on financial information to direct business strategy, management accountants also have the potential to boost the earning capacity. Organisations are seeking management accountants with strong business acumen and communication skills, and are willing to pay them 3.8% more than in 2013 in SMEs and 4.1% more in large companies. SME management accountants can expect to earn between £34,000 and £54,500, while those working for bigger organisations may command between £42,500 and £64,750. Professionals working in London may earn up to a third more than in other parts of the UK.
Rates of pay are also rising quickly for financial business partners, those individuals with the commercial, interpersonal and analytical skills to partner with various departments - including operations, sales, marketing and HR - to identify bottom-line savings. Partners working for SMEs can expect to see a 2.2% rise to £42,500-£62,250, while the national average in large organisations will be £45,000-£68,250, up 3.0% on last year.
Cost accountants are also in demand, with the decline in manufacturing resulting in a shortage of costing skills. As UK industry gains momentum, roles are available for those who can identify and advise on cost efficiencies and capabilities, helping firms to plan their future business strategy. Cost accountants are anticipated to earn between £38,000 and £42,750 in SMEs, up by 0.9% on last year, and between £40,750 and £47,500 in large companies, up by 1.1%.
Average salaries are also rising for professionals working in credit controller jobs. In 2013, the average SME professional earned between £17,500 and £24,000, but this will rise by 0.6% in 2014 to £17,250-£24,500. In larger organisations, salary inflation is predicted to be 1.1% for credit controllers. Average earnings were between £18,750 and £27,500 last year, but this is set to rise to £19,000-£27,750 this year.