Written by Abbie Smith, Associate Director
A combination of the UK’s post pandemic comeback, the cost-of-living crisis and a highly competitive employment market has led to wage inflation across all sectors in 2022. However, finance salaries seem to be in a league of their own as the average pay across finance roles in February 2022 was 31% higher than in December 2019, whilst average pay across all sectors was only 14% higher. This shift has generated positive change and we’ve seen the base salaries of finance roles increase to levels that reflect the ability of these individuals.
As a Senior Consultant in our Finance division recruiting qualified finance roles across the North West, I have witnessed spiralling salaries myself with a number of candidates. A couple of years back a newly qualified Accountant would be looking for £40-45k salary, we are now seeing these candidates already on £50k looking for £50-55k, a 22.2% increase.
I have also dealt with several clients who have lost out on talent purely because they aren’t able to compete on salary. Although it’s not always possible to keep reaching into the business’ pockets you will undoubtedly lose out in this war for talent if you attempt to recruit at the same salary as three years ago.
In this article I will highlight the trends that we’re seeing in the finance industry, what candidates are expecting from finance and accounting roles and how you can tackle your recruitment and retention challenges.
Like many industries, finance is influenced by the big players sitting at the top. The ‘Big Four’ accounting networks: Deloitte, Ernst & Young, KPMG and PwC can be huge drivers for salaries. It was recently reported that the average pay for PwC partners topped the £1m mark for the first time and in response to rising inflation they have also given half of their 24,000 UK employees at least a 9% pay rise.
Although this escalation of salaries can lead to a false economy it is becoming more common as 48% of employers with hard-to-fill vacancies have increased wages in a bid to attract new hires. Although this is not always achievable at SME level it does demonstrate that all businesses, particularly within finance need to respond to market changes, in a bid to retain and attract much needed talent.
My advice to clients who have no flexibility on salary is to reconsider your requirements and decide where you can make compromises. If you can consider someone with less experience but with the right attitude and drive who can be trained then you’re likely to find the right candidate in a shorter time period.
Ultimately this is good news for finance professionals. Amid the pandemic and ‘The Great Resignation’ candidates have been reassessing want they want from a career and this shift has led to an increase in salaries as employers attempt to stand out in a crowded market. Newly qualified, top 10 ACA accountants could now expect to receive salaries of £55k or more from their first move with some clients looking at flexing on their ‘ideal candidate background’ to allow them to meet their desired pay and keep in line with current team members.
There doesn’t appear to be any let-up on the horizon either. Whilst the labour market remains competitive, and inflation continues to rise candidates are in a strong position and can carry on demanding top tier employment packages.
Despite the Bank of England forecasting a recession, CIPD research indicates that recruitment and retention intentions remain strong for businesses. In fact, the proportion of employers planning on making redundancies is below pre-pandemic levels which suggests that businesses are continuing to grow and the need to recruit is high.
But as a small business you’re probably thinking you don’t stand a chance with the top talent because you can’t compete with the ‘Big Four’ salaries or offer 9% raises. Whilst salary is always a huge factor in any candidate’s decision to move jobs, the good news is that candidates are now looking for much more than just financial remuneration.
To improve your position in the market and your chances with the strongest candidates you need to ensure your entire employment package is attractive. This is more than just salary, you need to be thinking about pension, flexibility, and healthcare to name just a few. Gone are the days when 20 days annual leave and a company mobile phone was acceptable. Candidates are demanding much more from employers and if a recession does hit then this will also have a knock-on effect to packages and what candidates are willing to move for.
Although salary is a huge factor to finance professionals, they are now also demanding flexibility in their roles. In a recent survey with our finance candidates, we found that 81% of them prioritise the flexibility to work from home and I regularly have candidates turning down roles that don’t offer it. The pandemic had a huge impact on people’s outlook and many people are now aspiring for a better work/life balance over money in the bank.
If you don’t already offer some form of hybrid working, you risk reducing your talent pool considerably. As a recruitment consultant I would strongly recommend reconsidering your flexible working policy as it will put you in a better position when it comes to hiring.
Offering finance professionals, the opportunity to develop their skillset can help you deliver a competitive edge in the battle for top talent. CIPD recently reported that the top response planned by employers to tackle recruitment and retention difficulties is to upskill their existing staff members. Of course, retaining your current employees can save you time and money so instead of spending on hiring fees why not divert your funds to help upskill your team.
There are lots of opportunities when it comes to training and progression in finance. Funding qualifications for your transactional level employees will help breed loyalty and improve the level of expertise in the business.
We expect salaries in finance to continue increasing for the foreseeable future in a bid to attract talent and combat the rising cost-of-living crisis that we’re all facing. If you’re a candidate looking for a new role then the good news is you can expect a significant increase in salary, but it’s important to consider other factors of the role to ensure you’re moving for the right reasons. A high wage can be attractive in the short-term but it’s also important to consider progression, culture and the values of the business to ensure your longevity there. If you’re a client recruiting within finance then it’s important to compare your salary to industry averages to help you benchmark my role. You can take a look at our salary guide here. If you’re unable to compete on salary then it’s important you can compete on other areas. Candidates are increasingly looking for more than just money and will consider moving if the holiday, flexibility, benefit and culture are the right fit for them.
Here at Four Recruitment we’re not only your recruiter but also your trusted business partner, providing valuable insight and knowledge into the employment market. You can rely on us to find top talent for your business across HR, finance, business support, supply chain and at executive level. To learn more about how we can help you, get in touch with one of our friendly consultants.