Stable companions

Stable companions

The generous salary rises of recent years have slipped away as recruitment levels drop. But despite wages only rising in line with inflation, fewer accountants are looking to change jobs

Accountants’ workloads have been growing exponentially in recent years,
thanks to a rash of new regulation and changes to auditing and accounting rules.
Firms have been fighting over the best talent and recruiting as if accountants
were soon to be wiped off the planet. With this in mind, one would expect
salaries to rise as demand outstrips supply.

Economics dictate that when demand outweighs supply, the balance of power in
pay deals tilts in favour of the employee. It follows that finance
professionals’ pay should be rising in parallel with the need for more
accountants. Yet the results of this year’s salary survey belie the apparent
demand for accountants.

Average salaries have risen in line with inflation with few great leaps (see
table on page 22). Even finance directors can expect to take home on average
only 10% more, £71,533 compared with £64,470 in 2005.

The only real excesses seen in 2005 were among the public companies, where an
FD could expect to be paid anywhere between £200,000 and in excess of £2m. There
are some signs of growing salaries here, as our sister magazine Financial
Director found in its survey of FTSE 100 FDs, which revealed that the number who
earn more than £1m a year soared in 2005 from nine to 15. Partners take home a
little less than finance directors with average salaries of £68,647 – up to
£1,977 on last year’s pay packet.

Interestingly, despite tax advisers being in greater demand than ever because
of the Treasury campaign to clamp down on corporate tax avoidance, average
salaries in tax increased by just £1,547 to £48,103.

Those earning the biggest pay packets remain in the minority, with only 4% of
survey respondents taking home in excess of £100,000 a year. Of that percentage
more than double the number of men took home more than £100,000.

Geographically, the spread of those earning in excess of £100,000 serves to
reaffirm the widely held belief that the south-east of England is the best place
to earn a high salary with those in the Thames Valley accounting for 22.2% and
London with the highest percentage of 26.7%. Ireland and the south-west snatched
a meager 2.2% of those earning more than £100,000.

At the pay levels of £31,000-£36,000, £37,000-£42,000 and £43,000-£50,000 the
male/female ratio balances out significantly. But there were almost double the
number of women (15%) than men (8%) earning between £25,000 and £30,000.

Still, despite the nominal increases in pay packets, a significant 46% of
respondents said they weren’t seeking a new job. Of those 33% who were looking,
they said they were doing so passively. The results suggest several explanations
depending on whether you’re an optimist or pessimist. Employees could be content
in their present jobs or unsure of the economic outlook, and therefore wary of
changing jobs at the present time.

Only one in five were actively seeking a new job. The main impetus behind the
search for a new position, according to those who responded, was better career
development, racking up 55% of the votes. Pay rises came a close second at 44%;
and 33% would change jobs for a better work/life balance.

Where gender matters, a third of respondents were women, while just under
two-thirds were men in this year’s survey. Most respondents, at 72%, came from
the 25-45 age group. Despite the one-third to two-third female/male split, that
ratio wasn’t apparent among the finance director sample. A massive 86% of the
FDs who responded were male. In sharp contrast, 92% of respondents in the
payroll profession were female.

Just over a third had worked for five or more organisations in their
lifetime. This could indicate either a willingness to move around to gain career
progression, or a campaign for better pay.

Some of the most popular benefits figuring as part of the packages among
respondents were life assurance, healthcare, bonuses and pensions. An emphatic
70% of respondents said they received a pension as an employee benefit – a very
positive finding in the current climate, and music to the ears of chancellor
Gordon Brown, who is grappling with the pensions crisis in the state sector.

Findings show that respondents were in equal measure satisfied and
dissatisfied with their current benefits package and salary. When asked which
benefits they would most like to receive, 30% plumped for a bonus. Only 16%
chose extra holiday, while 21% went for flexible hours and 46% chose pensions.

Perhaps indicative of the recent years’ shortage of financial professionals,
a resounding 62% of those polled said they only negotiated their salary and
bonus once a year. Surprisingly, 18% never negotiate their salary.

The most challenging part of gaining a promotion was balancing work and home
life with 39% of respondents stating this as a potential deal breaker. The
figure rose significantly to 50% for those in payroll, perhaps because the
proportion of women is greater in this area.

On the whole, just under half of those polled were not unhappy with their
career progression. The 18% that were dissatisfied claimed age was the biggest
limiting factor, although it wasn’t apparent whether it was youth or old age
that was hindering progress.

As for salary prospects over the next year, almost half of those polled
believed salaries would grow in line with inflation. Perhaps more worryingly, 5%
thought they might be unemployed in the next 12 months.

Despite few grand pay rises, but heaps of work, the accountancy profession
continues to help the UK retain its European title of a long-hours work culture.
Almost half claim to work on average a 45-hour week with 26% admitting to
working up to 55 hours. Worse still, 5% said they worked more than 55 hours. As
one would expect, it is at partner and FD level where the most hours are worked.

Interestingly, more women who responded claimed to work longer hours than
men, with the ratio of male to female working 55 hours a week sitting at 20% to

Perhaps of greater concern, a significant 44% of respondents admitted to
feeling guilty if they didn’t put in the extra hours. A resounding 90% said no
one had ever complained about their not working sufficient hours. The pressure
to work long hours in accountancy might therefore be self-imposed or at the very
least falsely perceived.

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