Finance directors are in heavy demand and their earnings are rising quickly, according to a number of surveys out last month. In addition, both senior and lower-ranking finance staff have become more inclined to change jobs in order to better their salaries.
Finance recruitment specialist Robert Half International’s salary survey illustrates the point well: FD’s pay has increased by an average of 13% over the past year, with a corresponding rise in performance-related remuneration. The average increase across the finance function was 4.1%, marginally down from 4.5% in 1999. But employers noted that for newly recruited staff the average crept up to a 7.4% increase, demonstrating the high level of demand in the finance profession and the ability of a move to boost income.
‘People have confidence in their futures and are ready to change jobs,’ claims Robert Half’s new UK managing director, Steve Carter. Finance employees seem to know this only too well, with staff expecting salary increases averaging 14% should they move. ‘It is not surprising that after several sessions of downsizing, individuals feel they owe less loyalty to their employers,’ Carter adds.
Recruitment figures bear this out: 58% of employers surveyed cite recruitment problems in finance as a major headache, and, on balance, finance departments are more likely to be increasing, rather than cutting, headcount: 22% of employers were taking finance people on, compared to 10% reducing staff.
‘The career mercenary is taking hold,’ claimed outgoing Robert Half MD Jeff
Grout at the launch of the 2000 survey. ‘Traditionally, it was thought two years in the finance function was the norm – a year to be taught how to do things, and a year to pay back the employer. But young accountants are saying that one year to eighteen months is long enough, and companies have to ask whether they’re getting the payback.’
This level of mobility isn’t confined to junior finance roles, either. ‘This is the best time for a decade to be looking for a new job if you’re an FD,’ says Grout.
On FD’s pay (see table, above), the trends seem to match previous years’ analysis: London still has the best paid jobs, confirming the existence of a strong and growing North-South divide. The split between manufacturing and the newer service industries is still the prime reason for the discrepancy.
But there is also evidence of a shortage of high-quality FDs in some areas. Manchester-based financial recruitment specialist MDM Resourcing claims that fast-growing start-ups in the north-west, most notably technology and Internet businesses, are having problems finding suitable senior management, particularly as they look to attract additional venture capital funding or seek a listing.
‘There are simply not enough senior people around in the north-west with the right mix of experience, qualifications and City credibility,’ complains MDM’s Michael Mesrie. ‘Many FDs are very well tied into their existing companies and it is not always easy to incentivise them to move.’
Partly as a response to this shortage, there has been a marginal increase in the use of interim managers at senior levels within finance (mirroring the growing use of accountancy temps lower down the hierarchy – 62% of finance departments have used temps in the past year, compared to 56% the year before). While only 4% of companies currently use senior interim managers, a further 5% plan to use them during 2000. EC International, another specialist HR consultancy, recently put out a call for candidates to head up its interim management division thanks to the number of enquiries from dot.com, telecoms, leisure and finance clients.
One other notable shift has been in the preferred qualification for finance staff: 54% of employers have a preference for one type of training in staff, and 68% of these say CIMA is the qualification they look for. This is up from 57% last year. ACA attracts 26% (down from 33%); ACCA 15% (from 22%); and CIPFA scores just 2%. ‘CIPFA is pretty much dead in the water,’ says Grout.
Interestingly, given the increasing bias towards the management side of accountancy, only a third of candidates entering the profession claim they want to progress their finance careers to any great degree.