Climbing the accounting ladder
Accountants’ salaries and job prospects are streets ahead of some business counterparts, but the market is competitive. We take a look at the growth hotspots and how you can give yourself the upper hand at the negotiating table.
With national unemployment rates hovering at 5.6 per cent, and jobs growing at an annual rate of 2 per cent, you’d be forgiven for thinking the employment market in Australia is looking robust.
However, while employment is on the up, low wage growth has tempered the public’s positivity, with the Australian Bureau of Statistics (ABS) revealing that wages grew by a record low 1.9 per cent in the past year — the 20th consecutive quarter of falling wages growth for the private sector.
Despite the sluggish wages growth, accountants have relished their strong position in the market as demand for intermediate to senior positions has seen a spike in salaries for professionals.
ATO taxation statistics for the 2013/14 financial year revealed that the average taxable income for an accountant (general); bank accountant; chartered accountant; financial analyst, stood at $105,107 for men and $71,552 for women.
In 2014/15, those roles attracted $110,636 for men and $73,904 for women, a 5.2 per cent and 3.3 per cent growth respectively.
Further, the 2017 Hays Salary Guide published earlier this year also noted that the accounting market “has remained strong since the resurgence witnessed back in early 2015”.
Hays senior regional director for accountancy and finance, Susan Drew, believes accountants have yet to see the full salary increase potential despite growth coming in at a steady 6 per cent in 2015/16, and 7 per cent for 2016/17.
“I think there will be more opportunities coming for salaries to increase but we haven’t necessarily seen that reflected in the market at the moment,” Ms Drew said.
“The reality is the market is definitely improving but increases are probably going to start coming through towards the beginning of next year.”
However, Robert Half director for Victoria and Western Australia, Andrew Brushfield, believes accountants should look at the data with a pinch of salt, with supply and demand driving certain areas of accounting further up.
“Generally, you are looking at marginal increases,” Mr Brushfield said.
“Growth in accountants’ salaries is probably pretty similar to around the Consumer Price Index (CPI) level so it’s not drastic by any means but yes there is a bit of an increase.
“There are pockets within accounting that you will always find will get higher or lower increases in comparison to CPI and typically they are the more niche skill sets, the more in-demand skill sets that can command higher salaries, and the more generic skill sets... then I suppose the salary banding is probably a little bit flatter.”
Mr Brushfield believes future-proofed accountants who can negotiate a higher salary will be professionals who can engage and support the business beyond their usual “number crunching” skill set.
“There is always an enormous need for accountants with very strong commercial skills and abilities to deal with the commercial operation of an organisation be it the operations department, the sales department, or the strategy department,” he added.
Likewise, Ms Drew predicts that firms will be on the lookout for accountants who can be business partners by supporting the strategic direction of the business.
“With the introduction of more effective technologies, firms are now really trying to utilise their people to go out there and create more opportunities,” Ms Drew said.
“They are looking to upscale, upsell the skills as opposed to just delivering that bottom line of finances but how they can get involved in financial analysis for their clients, and how can they look at strategic opportunities for them as well. The opportunities are looking at more than just the numbers, more than just the reconciliation of debits and credits, it’s far more about strategic support and direction of the business, and looking for how they can maximise opportunities for their clients.”
Specifically, business services, tax and audit type roles have continued to demonstrate steady opportunities, says Ms Drew, while Mr Brushfield says the highest wage growth comes from niche accounting areas such as statutory reporting professionals and tax experts where there are generally fewer candidates on that career path.
Hays regional director for accountancy and finance, David Cawley, says he sees a huge demand for payroll and credit control professionals, who often get multiple job offers and are “out of the market in days”.
“Finance managers and financial controllers are probably seeing the highest joint biggest demand in first movers but are seeing the better opportunities to take advantage of salary increases because their ability to help a finance function and grow that quickly or achieve the goals that an organisation has got… clients are willing to pay a premium to get those sorts of people on board,” Mr Cawley added.
First movers from the big four accounting firms are also still in hot demand, leading to a higher negotiating power, according to Mr Cawley, but typically only to listed organisations that have ASX reporting or overseas reporting requirements.
“They know that engaging a big four background candidate, they come with rigour, standard, the ability to work to very tight time frames and have come out of an environment where demands on their ability and quality of what they do is very high,” said Mr Cawley.
“I see a large demand for those candidates and a huge shortage for them to the point where a lot of what we do for our clients is around the talent pooling of those individuals so when they do need them we have the candidates available.”
Despite an overall growth, salary increases have not been uniform nationwide.
The east coast has contributed to the bulk of the growth, with Sydney at the front of the grid and Melbourne close behind.
Mr Cawley says he is also noticing “real hot spots” in Tasmania where there is a talent pool shortage in a smaller geographical area, driving up salaries.
“It’s driven by the building sector job levels and that’s because of infrastructure development and renewals going on in places like Hobart and Launceston,” added Mr Cawley.
“They just have large gaps in terms of the candidate volume and quality that is available.”
On the flipside, Mr Brushfield says Western Australia is still continuing to feel the effects of the downturn of the mining boom.
“If you reverse clock back to six years ago, Perth was absolutely flying, salaries were going through the roof and NSW was really struggling, so it is definitely determined by geography,” said Mr Brushfield.
The negotiating table
Noting the highly competitive marketplace, Ms Drew has urged accountants looking for a career jump to place emphasis on staying up-to-date with technological developments in the trade and staying in the loop with market trends before plunging into the job market.
“You can’t just go in asking for something — you need to be able to articulate what the value is to the employer and the benefit to them and the differences that you are going to make as well,” said Ms Drew.
“It is a highly competitive marketplace; there are a lot of candidates out there with a wealth of experience.
“It is about what can you do that is potentially different from other people — consistent ongoing learning, demonstrating that ambition to keep their skills very up-to-date, very new, very fresh, that will definitely support more opportunity for career progression and then give you the opportunity to be able to articulate the differentiators and the additional value you can add will support salary increases as well.”
Adding to that, Mr Brushfield believes hitting the books for additional qualifications and designations may prove to be the 1 per cent that helps you land your next role.
“The higher up you go within an accounting structure, the more necessary it is to have further qualifications. Absolutely, you will have more money if you have those designations or those qualifications,” said Mr Brushfield.
“Those qualifications alone don’t take you that far. They are very important don’t get me wrong but personality, cultural fit, commercial nous, issue resolution ability, all of those are vitally important.
“There are examples of people who are super well-qualified but are not necessarily climbing the tree because they lack in other areas.”
For Ms Drew, the best tip she can offer to accountants is to know their worth and to adequately articulate that to prospective employers.
“Be clear about what you’re looking for and be able to substantiate why and the additional value that you can add,” she said.
Likewise, Mr Brushfield believes it is all about distinguishing yourself.
“It is a competitive market that they are operating in so the best way to separate yourself from other people and therefore give you better negotiating power is to have done things that have set you apart from other people — so what have you achieved in previous jobs, what’s your impact been, what’s the legacy that you’re leaving an employer,” said Mr Brushfield.
“If you have a stronger résumé that impresses those achievements then you stand in a stronger position in getting a new job and negotiating a better wage.”