A NUMBER OF FACTORS have created a ‘perfect storm’ which is giving candidates significantly more bargaining power over pay and conditions than we’ve seen for many years when it comes to negotiating moves into more senior accounting roles.
The improving economy means firms are winning clients and looking to add staff, while over the past few months we have seen increased opportunities for finance roles in industry, which typically offer higher salaries and sometimes a better work/life balance.
As a consequence, a move into industry is proving more and more attractive to many accountants, but the trend is creating a shortage of newly-qualified staff in specialist practice areas such as external audit, transaction services, corporate finance and, to a lesser extent, tax.
Most crucially, the lack of suitable staff has a lot to do with the fact that, during the recession, most large accountancy firms reduced their graduate intake. Three years on, there are fewer qualified ACA candidates coming through the ranks.
What does this all mean for recruitment? Well, today’s candidates are more savvy than those in the past and realise they can command higher salaries when it comes to securing their next move, into roles such as audit senior, manager and senior manager, and even director level.
It’s a situation most keenly felt among the Big Four and mid-tier firms, especially those determined to retain their best people rather than see them head off into industry.
These firms are now having to come to the negotiating table to compete for the best talent, whereas 12 months or so ago this would have been the case only in extreme circumstances.
We’re frequently seeing instances where clients are adding up to £2,000 to an annual package for newly-qualified audit roles, and up to £10,000 to secure the services of a senior manager or director.
Candidates have the upper hand and, realising this, are able to play firms off against one another to clinch a better deal for themselves.
Widen the net
Another interesting development arising from the lack of candidates is that clients are increasingly willing to recruit from smaller firms and from overseas.
In recent times, we’ve placed accountants with transferable skills from countries such as Cyprus, Barbados and Australia with British firms.
Before the recession, they wouldn’t have had a look in. So what does all this augur for the future?
In the short-term, a radical overhaul of salary and benefits might help the larger accountancy firms to tackle the problem.
However, over the longer term, this strategy may create internal pay anomalies which could exacerbate the problem by triggering a fresh round of moves by dissatisfied staff.
What is called for is a rebalancing or increase of practice salary packages to eradicate these anomalies and retain the desired number of staff.
It’s also been suggested that accountancy firms relax their recruitment criteria to plug the gap, and consider candidates who tick fewer of their key boxes and would command lower salaries.
However, we are finding this is not a favoured course of action, as any such moves could impact on firms’ service standards.
Another pinch point
It is likely that years of reduced graduate intakes will create another pinch point at some stage, as this smaller pool of newly-qualified ACA staff become more senior. A lack of managers, senior managers and directors is in the pipeline.
The key to tackling this supply-versus-demand conundrum is having a sustained, focused push on graduate recruitment. It will take three or more years to have an impact but ultimately will replenish the stocks.
These are all lessons which need to be learned so the industry responds adequately the next time the economy takes a turn for the worse.
Tom Rogers is a business manager at recruitment firm Stark Brooks
HMRC breaches client confidentiality; and partner profits fall at EY. These stories and more discussed in Friday Afternoon Live
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Six new partners have been revealed by top ten firm Mazars
KPMG has announced the appointment of David Campbell as partner within its Enterprise practice.