2021 salary outlook: cautious optimism for accounting profession
14 January 2021: Despite a difficult economic backdrop, 50% of accounting and finance professionals say they managed to increase their salaries over the past year. However, average pay increases failed to hit even 1%, despite a relatively buoyant market that will see more than half of employers recruit new accounting and finance staff over the coming year.
The headline figures mask some interesting variations. Those working in payroll, accounts receivable and insolvency practice generally fared the best in terms of salary hikes, receiving average increases of over 2%, according to the Hays Salary & Recruiting Trends 2021 Guide, due to be published at the end of this month.
Meanwhile, those with financial controller on their business card received the top average salary increases at 2.9%, meaning they now take home on average £74,875 a year. In contrast, the average salaries of CFOs/FDs in large companies have remained static over the last 12 months at £231,667, with London-based CFOs/FDs earning an average annual salary of £300,000, twice the average of their equivalents in Northern Ireland.
Despite largely stagnant salary levels, 64% of the 3,850 respondents in accountancy and finance roles said they are satisfied with their salary. The revelation will no doubt come as a relief to hard-pressed employers, bearing in mind that only a third of companies say they plan to give pay rises this year.
“Nothing has been normal,” says Karen Young, Director of Accounting and Finance at Hays. “Without doubt, the pandemic has impacted the profession and one of the consequences is that pay rises are lower than I would have expected.” Only half of employers surveyed said they had increased salaries compared with 78% in the previous year. “That could have a big impact on how someone is feeling about their job,” Young added.
It’s perhaps no coincidence then that a third of accounting and finance professionals say they plan to look for a new job in 2021 and, encouragingly, half of respondents say they are confident about job opportunities in the sector, the Hays survey finds.
“Salary and benefits are a strong reason for people to leave their jobs. But asking for a pay rise is about making a strong business case and presenting your manager with reasons why you deserve more money, backed up by evidence,” Young said. “No one is going to hand it to you on a plate.”
Despite the upheaval of the past year, hiring demand remains very high. 88% of employer respondents said they expected activity levels to increase or stay the same over the next 12 months and 54% said they planned to hire new staff this year, up from 50% in the previous year. Of those planning headcount increases, 75% plan to hire staff in tax and 73% plan to hire staff in audit, risk and compliance.
The findings tally with the results of another survey conducted by recruiter Robert Half, which suggests that accounting professionals are marginally less optimistic than the market average about receiving a pay rise over the coming year. According to Robert Half, only a third (34%) of accounting and finance respondents said they expected to receive an increase in salary in 2021 (compared with 37% of professionals generally).
However, according to the Hays survey, three quarters of employers said they have experienced some form of skills shortage in the past year. It highlighted the importance of soft skills in the mix of most sought-after candidate attributes. The most in-demand skills emerged as communication (55% of employers), the ability to adopt change (54%) and problem-solving (45%).
If finding a new job or getting a promotion is on your New Year’s resolution list, take a look at our expert tips on moving your career up a gear in 2021 and find out how ICAEW Jobs can support your search.