PracticeConsultingAnalysis – Still a divided nation.

Analysis - Still a divided nation.

A quick scan through the recruitment pages on a Thursday, including those at the back of Accountancy Age and other business publications, shows the kind of salaries senior financial staff can expect in today's market.

The jobs pages are littered with promises of six-figure packages for group financial controllers and chief financial officers, and they are not just restricted to London.

Whoever becomes the next chief executive of the Chartered Institute of Management Accounts for instance, can expect to receive comfortably more than £100,000.

Robert Walters, a leading recruitment consultancy, has just released its latest global salary survey for financial staff. In the UK the survey highlights the increasing competition among organisations to attract and retain quality financial specialists.

According to David Magowan, director of Robert Walters’ UK commerce division: ‘The recruitment market remains highly competitive at all levels, particularly for those candidates with industry-specific skill sets.

‘Over the next twelve months we anticipate the demand to remain high.’

The survey reveals in the South a financial director in industry could expect on average to be earning more than #120,000.

In the North West a similar position would command a salary of anything up to £85,000.

But the real money is still to be made in London. The capital city recruitment market has some unusual features, which separates it from the rest of the UK.

It is home to more global businesses than anywhere else in the UK, but demand still outstrips supply of quality people.

This, together with its high cost of living, is helping drive up the salaries of financial staff.

As Greg Robinson, a senior consultant at Robert Walters in London, says: ‘The London market has seen strong growth in 2000 and even though the market in 2001 has settled slightly, a strong demand for skilled candidates remains and salaries being offered are very high.’

The corporate finance arena can offer particularly rich pickings – for instance most of the partners of Alchemy, the venture capital vehicle run by Jon Moulton, are qualified accountants.

A manager within a corporate finance house can expect to earn up to £65,000 but the salary will be augmented by substantial bonus payments which will be a multiple of the base salary.

And the accountant does not need to be working on the deals to benefit.

‘A financial manager for a corporate finance team in an investment bank will benefit from the bonus pool available to front-office staff,’ says Colin Grant-Wilson, partner in KPMG Search & Selection.

Grant-Wilson adds: ‘Packages in financial services are generally above other sectors, and within the sector, investment banking is higher than the average.’

While the traditional corporate finance recruitment market has continued to grow, there has also been significant growth in the private equity and venture capital arena with a large number of overseas firms setting up London operations as platforms for their European expansion.

In the banking sector, competition for the highest quality ACA newly qualified accountants from the Big Five is as strong as ever.

In years gone by, the switchboards of the major accountancy firms would go into meltdown the day after exam pass lists were published in newspapers as financial recruitment agencies tried to snap up the best newly qualifieds.

But employers are now looking towards CIMA and ACCA qualified accountants to fill positions traditionally taken by ACAs. An ACA used to be able to command a higher salary than other qualified accountants, but this is no longer the case.

‘Our qualified members tend to be self-starters,’ says Andrew Harding, ACCA’s head of professional standards and development. ‘They haven’t had their hand held by a large accountancy firm while going through the process.’

This emphasis on practical experience, combined with a broad syllabus and relevant commercial experience makes the ACCA qualification a very marketable commodity.

‘Employers are now questioning the old adages,’ argues Harding, ‘and this is working in favour of in-house trained financial staff rather than those from the Big Five.’

This view is supported by others who say that experience is becoming more important and that the type of qualification required of financial staff is only more important at lower levels.

‘It is fairly standard for a chairman or chief executive to ask for a chartered accountant as FD,’ says Grant-Wilson.

‘But when confronted with a shortlist that includes people who are not chartered accountants, then provided they have a sound track record they are taken seriously.’ It would appear that experience is becoming increasingly important.

As one financial controller says: ‘Companies are more precise about want they want. At higher levels, experience is very important.’ Another growing trend is the increase in contract work, temporary positions and interim management.

A more mobile professional workforce and the institutionalisation of change have led to an increase in short-term financial assignments. But there is still a shortage of suitable candidates, and this is driving up hourly rates.

According to the Robert Walters survey, employers are becoming more creative in attracting contract workers, often including incentives such as a bonus or car, perks traditionally reserved for permanent employees.

‘The economy needs more interim people and measures such as IR35 are not helping,’ says KPMG’s Grant-Wilson.

A separate survey has also confirmed there is still a North-South divide in salaries, despite the growth in the financial sector in the North East and increasing investment in the North West.

Recruitment consultancy Sewell Moorhouse found that the average salary for a financial director in the North of England was #58,000, while Martin Ward Anderson in London calculated the average to be #75,000.

Sewell Moorhouse identified that although Yorkshire’s economy has boomed in recent years, London still remains the financial capital and this is reflected in the wage packets.

In part the salary differences reflect the variations in the cost of living, transport and regional residential and commercial property markets so the differences are relative. The figures for the South are skewed by London where salaries are driven by the international businesses.

But Cliff Sewell, managing partner for Sewell Moorhouse, argues that financial staff could in fact be better off in the North. ‘Five to ten years ago you had to go south to develop your career. Now that is no longer the case and you can get high profile work in the North,’ he says.

‘You might get paid less, but you could be better off,’ he adds.

Sewell is also quick to point to the growth in young, dynamic companies that are looking for much more than a number cruncher from their financial staff. ‘The qualified accountant in these companies could also be responsible for IT, public relations and other, non-accountancy roles. In these lean organisations it certainly is sleeves rolled up time for everyone.’

There are more financial institutions, which leads to greater competition for financial staff.

The evidence points to a demand for financial staff both in front-office operations and in the back office.

Not everyone will reach the dizzy heights of AMVESCAP’s FD, Robert McCullough, who last year, through a hefty bonus became the first FD to break into the millionaires club, or Mike Rake, KPMG’s senior partner who earned a cool £1.65m in 2000.

But judging by the number of financial recruitment ads seen on a Thursday, the prospects are good for the nation’s accountants.

For full details of the Robert Walters survey, go to

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