It took God six days to create the world, and it could take divine intervention before low-paid accountants earn some serious money. Only six months ago, Accountancy Age’s spring 2003 salary survey revealed that huge numbers of UK accountants earn less than £25,000 a year, with even more bringing home under £40,000. Now, half a year on, the number earning less than £25,000 is growing.
The deluge of letters that resulted from our April survey revealed mixed views. Some pointed out that the results were swayed by the wages of newly-qualified accountants, others said for many accountants working outside of London, life in this pay bracket was ‘the norm, not the exception’.
The autumn 2003 Accountancy Age/Robert Half salary survey shows that 20% of accountants earn less than £25,000 a year, a slight increase on the 18% of accountants in the lowest pay bracket from our previous survey.
Equally significant is the fact that nearly half (44%) of accountants earn under £36,000 a year, which is not much different from the 45% who concurred in the survey that was conducted last spring.
Not much has changed, it would appear. Wrong.
Our previous survey showed that a whopping 43% of respondents earned between £37,000 and £42,000, meaning that the earnings of 88% of accountants were less than £42,000 a year.
And the numbers held firm, irrespective of age band (bar those under 25 years old), job role and location.
But a mere six months later, the number of accountants that earn between £37,000 and £42,000 has shifted downwards to 13%. Today, just 57% of respondents earn under £42,000.
Suddenly a huge proportion of accountants are earning a higher wage than they did six months ago, though the wages of an even higher number are at the very bottom end of the scale. So why the shift?
Perhaps Accountancy Age’s wage revelations last April led readers to knock on directors’ and partners’ doors for a raise. Or perhaps readers, previously inclined to fill in their salary details somewhat optimistically, have been turned by the revelation of huge swathes of low-paid accountants and are now filling in the survey more realistically.
It’s hard to believe there is a market reason for the change. The accountancy recruitment market may be finally getting out of the doldrums, but pay rises are still thin on the ground.
The answer is simpler. According to our analysis, more finance directors, financial controllers, and tax specialists earning a salary of between £42,000 and £50,000 a year are taking part in the survey.
Two factors have combined to make this the case. One is that there are more of them proportionally – these are the sort of job titles that survive even when there are cuts elsewhere. And secondly this group is clearly more willing to talk about pay packets.
But none of this helps the many accountants in the low-paid salary bracket – even when bonuses are added up. A disappointing 17% of accountants earn under £25,000 when all financial and non-financial benefits are taken into account, practically the same number as without benefits (20%).
This is depressingly similar to previous surveys. Private healthcare, subsidised travel costs, a fleet car – or even the chance to join a profit sharing scheme – remain the preserve of higher earners.
Once again, there is a reliance on the intrinsic benefits that so many low-paid accountants have stated keeps them in their job, ranging from flexible working hours, preferable work location and job satisfaction.
And again, as our analysis overleaf shows, female accountants are still worse off than their male counterparts in terms of salary and benefits.
When it comes to bonuses, it’s not just the low paid who have suffered. Over half our respondents received a bonus of less than £1,000 more than in the last fiscal year, which is not totally surprising when current business conditions are taken into account.
Only a very lucky few – 8% – were rewarded with a bonus worth more than £10,000. But it was the questions we hadn’t asked before that revealed the most.
Perhaps surprisingly, the vast majority of accounting professionals think that ‘most executives are paid too much’.
An emphatic 70% of respondents agreed with the statement. It is also unsurprising that partners are less accepting of the idea that senior executives are paid too much.
Only 50% of partners agree with the statement, and a very coy 11% decided not to answer the question.
A number of accountants new to the profession have also taken part in the survey. Twenty percent of respondents are newly qualified or have less than three years of post-qualification experience.
It seems entirely reasonable that these accountants account for a large percentage of the low-paid statistics.
The same proportion of newly-qualified accountants and just-qualifieds also took part in the research six months earlier.
But, as the letters that followed our last survey demonstrated in spades, low pay is not unique to newly-qualifieds.
In short, if you are on the first rungs of the accounting ladder, then you’re probably earning under £25,000.
But there is evidence that a number of accountants have seen their salary move upwards in the last few months – so be patient.
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Investment in people, tech and businesses impacts on EY's profit per partner figure
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned
Dr Richard Willis provides a several thousand-year history lesson of the profession, from origin to modern-day