BusinessPeople In BusinessReputation in tatters

Reputation in tatters

Enron has knocked accountants for six. They have lost esteem in the eyes of the public, but how do they view themselves? For the first time, the Accountancy Age/Robert Half careers survey provides the answers.Click here to view the survey results

Much has been written in recent months about how the reputation of the accountancy profession lies in tatters. Post-Enron, accountants have never been more derided.

Indeed a survey by BBC Radio 4’s Today programme revealed last month that accountants are only marginally more respected as a profession than car dealers, estate agents and MPs. With all due respect to car dealers, estate agents and MPs, it’s hardly a ringing endorsement.

But so far no-one has asked accountants themselves how they view their profession after the shredding in Houston. But this week, with publication of this year’s Accountancy Age/Robert Half careers survey, that changes.

The most comprehensive survey yet
The poll – of 1,148 accountants – is the most comprehensive survey of the attitudes of accountants in 2002 and of the rewards they are currently enjoying. And despite some good news (including long-overdue evidence of something approaching gender balance) the survey reveals a worrying level of insecurity: about status and about career prospects.

Previous Accountancy Age careers surveys have painted a conventional picture of the profession. Long hours, hard work and the need to adjust to a constantly changing work environment have all been the norm. All that still rings true in 2002, of course, but the Enron effect is adding new pressures.

First a little about the mechanics and breakdown of the survey. It was conducted over a three-week period during May 2002 and participants were able to respond to the questionnaire by both post and through the internet.

Most respondents came from London (21%) and the North (20%), with 11% from the Midlands, 10% from Thames Valley, 17% from the home counties and 6% and 8% respectively from the south coast and the south west.

Most common job title
The most common job title is accountant (34%) with 12% describing themselves as finance directors and 18% as financial controllers. Some 3% are partners with the rest using a range of titles including finance manager, consultants, finance managers and managers. By age, 41% fall into the 25-35 bracket, 33% are between 36 and 45 and 17% between 46 and 55. Just 2% are under 25 with the remainder over 55.

Some 67% of respondents are male and 30% female with 3%, intriguingly, declining to answer the question. Significantly, however, in the 25 to 35 age bracket, 58% of respondents are female, suggesting the profession might enjoy a healthier gender balance in years to come.

By qualification, 44% of respondents are ICAEW-trained, 24% ACCA, 21% CIMA, 2% ICAS and 6% CIPFA. Given that spread its not surprising that 71% work in the private sector.

But back to Enronitis. For several months now Accountancy Age has been urging the profession to address the battering its reputation has taken.

And the Accountancy Age/Robert Half survey makes it abundantly clear why this is so vital.

Impact of Enron on career prospects
One in ten accountants working today believes that the damage done to the reputation of the accountancy profession by the Enron affair will affect their career prospects – at least in the short-term. And if you are a young accountant working in the City, it appears that those fears are most pronounced.

Some 13% of accountants working in London believe their aspirations have been affected by events in Houston, while 11% of those under 35 feel the same.

Meanwhile only 65% of respondents say they describe their role to other people as accountants. That might sound respectable but when Accountancy Age readers were asked the same question two years, 77% said they described themselves as accountants. It would be na’ve to think the Enron effect has not bit here too.

It is a point hammered home in responses to another question too. Some 59% of accountants say an employer’s reputation matters in deciding whether to apply for a job. And worryingly only 50% say that their current employer is fulfilling their reputational needs.

And reputation matters. Indeed it matters more in the job market to accountants working today than training (which 52% say is important), travel (53%) and share options (29%). Reputation ranks only slightly lower than working hours (63%), benefits packages (64%) and career progression (66%). But salary, which 80% of respondents say is important, working conditions (73%) and personal recognition (71%) are some way ahead.

Turning against practice
Given the damage suffered by Andersen in the wake of Enron it is no surprise that accountants want to turn their back on practice. Just 15% of respondents say they would like to work in an accountancy practice – fewer even than the 19% who say they want to work in manufacturing, a sector apparently in terminal decline in this country.

The big City aspirations of recent years also appear to be waning. Some 42% of respondents say they would like to work in a small town compared with 25% who want to work in a large city. Just 6% want to work in London – less than half the number who currently work there.

With all this uncertainty it’s no wonder more accountants than ever are considering changing jobs. Some 27% cannot see themselves remaining with their current employer for more than five years. That falls to 21% when the time frame is changed to ten years.

And many of those who are happy where they are would still like to turn their back on it – albeit temporarily. A surprisingly large 54% say they would consider taking a sabbatical of six months or more, though just 7% have done so in their careers so far.

Depth of Enron problem
The Enron effect of should not be discounted. Indeed this year’s Accountancy Age/Robert Half survey only serves to highlight the depth of the problems facing the profession in 2002.

There is an elusive club run by the profession. Its members are few in number and highly influential. Some of its members are known and, though others are not, many suspect they know who they are. What is clear is that the numbers who can count themselves as members of the Accountancy Millionaires Club are swelling.

Broadly speaking, those accountants who have enjoyed seven-figure annual salary and benefit packages fall into two groups: FDs of a handful of high-paying FTSE-100 companies and senior partners of Big Five firms.

Among the former are six FDs – including Amvescap’s Robert McCullough, Vodafone’s Ken Hydon and Nicholas MacAndrew, the now departed FD of Schroeders.

The latter group counts KPMG chief Mike Rake and Ernst & Young head Nick Land among their number.

Accountancy millionaires club
Given the turbulent times in which we work it might seem unlikely that the Accountancy Millionaires Club will grow its membership this year.

Nevertheless there is enough evidence in this year’s Accountancy Age/Robert Half International careers survey to suggest that right now there are far worse careers than accountancy to be in working in terms of remuneration.

There are not many sectors of the economy that have seen as healthy salary rises as those enjoyed by accountants over the last year.

One in ten respondents to the survey have enjoyed rises of over 10%.

That’s staggering given how difficult the last 12 months have been for the economy.

A further 9% of accountants enjoyed rises of between 8% and 10%. True, the majority (67%) did not see salary rises of more than 5%, but this is still pretty respectable given the financial cosh many companies have been under.

Healthy salaries
Salaries themselves seem healthy, according to the survey, with 42% of accountants earning over £40,000 a year. Once you take total salary packages into account, 57% earned over £40,000 last year. For 4% of respondents, total packages topped £100,000 last year. Salaries were highest in London and the home counties, but often you need surveys to confirm the obvious.

Most accountants participate in some form of bonus scheme. And in almost all they are very much linked to performance. Just 2% of respondents said they enjoyed the luxury of guaranteed bonuses. They are often sizeable too. Some 6% of accountants enjoyed five-figure bonuses last year with four respondents saying they took home bonuses in excess of £50,000. And while in most cases (42%) the sums involved were of less than £1,000, 32% enjoyed four-figure payouts.

And then there are the average ages of the various postholders, always a useful benchmark if you are looking to work out whether you are overachieving – or underachieving. While the average age of respondents was 38, the average age of finance directors and partners was 43 and 46 respectively.

Average age
The average age of a partner is up slightly (it was 44 when we last polled readers two years ago), but the average age of an FD is consistently youthful.

A typical financial controller is 38 (it was 39 last time) while you could expect an internal auditor to be 35 (33 two years ago) and an audit manager to be 36 (again up 12 months). Jobs, it seems, are no longer going to ever younger people. It might just seem that way.

But it is the sums themselves that are always the most controversial area of a survey like this – and they reveal huge discrepancies between the pay earned by females and males working under the same job title.

But the differences are not always those that you might expect.

Take finance directors. An FD would typically earn £56,127 a year, according to the survey. A male FD, on average, earns £55,965. Female FDs average £58,750 a year – comfortably more in most cases than their male counterparts.

And it is not unique to finance directors.

Female partners
Female partners of firms earn £50,714 a year while male partners earn £46,477. And female respondents who describe themselves as managers earn more than their male counterparts: £43,750 versus £40,909.

It’s welcome – and, some might say, unexpected – evidence that accountants can expect to be paid the same for doing the same job – whatever their gender. And to find the evidence in two of the most senior roles in the profession is very good news.

In many other areas there was – broadly speaking – parity. Among those describing themselves as directors, males earn £54,688 on average while females earn £55,000. Male audit managers earned £42,083 while their female equivalents £41,500.

But in other sectors traditional gender imbalances hold sway over salaries.

Male accountants earn £35,998 on average while females earn £32,780. Female consultants earn an average of £37,143 while their male equivalents earn £54,167. Male financial controllers meanwhile earn £38,488 on average while female controllers earn £47,117.

Worryingly it would appear that when a pay differential does exist, the pay difference in favour of male postholders is far greater than when females are in the ascendancy.

Overall however the gender imbalance lives on. The average salary of respondents to the survey was £42,045. The average salary among the 771 male respondents was £44,035. Among the 342 female respondents the average salary was £37,813.

Progress, yes. But limited progress.

Click here to view the survey results

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