War for talent hits audit salaries

Firms could be forced to increase salaries further, to persuade accountants to join audit arms struggling to cope with increased workloads.

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The full extent of the skills crisis gripping the accountancy profession is revealed in the latest Accountancy Age/Robert Half Accounting & Finance Salary Survey.

Despite widespread claims among larger firms that the pipeline of new recruits is buoyant, 42% of the 2,160 respondents to the survey admitted their organisation was finding it hard to recruit staff with the right skills.

But the headline figures conceal a skills crisis in compliance – 75% of respondents in audit said they were plagued by skills shortages, according to the survey.

The dearth of skills is particularly apparent among firms in the mid-tier and above. It also appears to be more acute outside London, suggesting that firms have concentrated on plugging the gaps in larger client audits.

Predictions that the introduction of international financial reporting standards on 1 January would lead to a dearth of skills have not been borne out. General audit skills are a bigger recruitment headache than either IFRS or Sarbanes-Oxley expertise.

And even those outside of audit – including clients – recognise that the situation is becoming desperate.

Riaz Shah, UK head of audit operations at Ernst & Young, said firms had to offer benefit packages tailored to the individual. ‘Now people are looking for personal options. They want to be treated as individuals. Some work long hours and thrive on it, others don’t.’

The shortfall of audit skills is matched by a lack of candidates with business management skills. IT experience is also in short supply.

But despite the skills gaps, average salaries have not risen dramatically in the past six months.

The average basic salary of an accountant in the UK is now £44,850 – an increase of just £610 since the last survey six months ago. Just 13% of respondents in audit said that their organisation had resorted to big salary hikes to attract new recruits.

The double-digit salary growth suggested by the last salary survey has failed to materialise across the profession, although in some areas pay hikes have started to filter through. ‘In audit, salaries have had to go up and have gone up because we have had to respond to the market,’ Shah said.

Read the full salary survey to find out how much you are worth.