Author: Iain McLeod – Accounting & Finance Recruitment Specialist within the Property, Funds, Wealth & Insurance Sectors.
The 2021/2022 financial year was the busiest market we have ever experienced both as a business over the past 5 years and personally as a Specialist Accounting recruiter for the past 20 years. This is unlikely to change during the remainder of 2022.
That said, the market from an applicant/candidate and employer perspective varies depending on role level, function and sector.
The entire market is busy with jobs; however, the candidate supply (and competition for jobs) varies. Hopefully the below gives some insight into which type of roles/candidates are experiencing high supply and those roles in high demand.
That said, the market from an applicant/candidate and employer perspective varies depending on role level, function and sector.
The entire market is busy with jobs; however, the candidate supply (and competition for jobs) varies. Hopefully the below gives some insight into which type of roles/candidates are experiencing high supply and those roles in high demand.
Prevalent themes of the “Great Job Boom”
Where have all the contractors gone?
In previous years, almost 50% of our placements (both temp and perm) have been unemployed or currently in another contract/temporary role. This year it has been less than 10%.
Low (arguably Zero in Finance roles) unemployment, low levels of immigration, reducing population and increases in the number of accounting jobs in our client base has all contributed to a barren Temp and Contractor pool. This lack of supply has also driven up contractor rates of pay by over 25% or more for in demand skill sets. Barring personal circumstances, those currently not working have chosen not to work.
25% is the new 10%
“How much of an increase should I ask for in my next role?” is a common question I am asked.
“What level of pay would make you consider staying in your current role?” is what I ask many candidates.
In previous years, I believe the consensus among jobseekers has been that a 10% pay rise as a minimum is a fair reward for changing roles, however not in 2022. I have seen staggering pay rises of up to 65% this year, however in absence of other motives for changing a role, we have experienced a trend towards the 20-25% range.
As a result of inflation and low unemployment, we are experiencing more counteroffers than ever before (over 550% increase). Employers and employees know the cost of replacement (if you can replace) is higher than the current salary. Something for both the employee and employer to think about come resignation day.
Working From Home or Back to the office?
There is a great deal of commentary on this topic and is something I would prefer not to add to; however it is the primary driver of Employee unrest and the primary concern for Employers looking to build teams which support business growth. I think the two conflicting comments below highlight the disparity best:
Job Applicant “I didn’t realise companies were going back to 4 or 5 days in the office. I have moved my gym membership close to home”
Employer “If the team think they can do their jobs remotely, then I think we should look at moving their jobs to a lower cost remote location”
We have a long way to go, but for now with low unemployment and limited migration (competition), it is an employee market. This dynamic will change, but not in 2022 (barring a recession).
Lack of Immigration
Australian companies have historically benefited from a migration of junior qualified accountants to fill roles in practice and commerce, including an uninterrupted stream of professionals entering on working holiday visas to support both contract/temporary hiring as well as transitioning into the junior finance market. With borders fully opening in the past few months, we expected the flow of migrants to increase substantially from the lows of the pandemic. However, with Australia’s immigration processes burdened by wait times and stricter requirements compared to overseas competitors for talent such as the UK and Canada, there is far more competition for global talent than pre-pandemic. In addition, Australia’s tough stance on borders during the pandemic scared off many prospective migrants. This has led to a shortage of candidates which will not be abated until the federal government act to loosen the visa requirement, remove backlogs, and hasten the application process.
Market Overview by Level
Where have all the contractors gone?
In previous years, almost 50% of our placements (both temp and perm) have been unemployed or currently in another contract/temporary role. This year it has been less than 10%.
Low (arguably Zero in Finance roles) unemployment, low levels of immigration, reducing population and increases in the number of accounting jobs in our client base has all contributed to a barren Temp and Contractor pool. This lack of supply has also driven up contractor rates of pay by over 25% or more for in demand skill sets. Barring personal circumstances, those currently not working have chosen not to work.
25% is the new 10%
“How much of an increase should I ask for in my next role?” is a common question I am asked.
“What level of pay would make you consider staying in your current role?” is what I ask many candidates.
In previous years, I believe the consensus among jobseekers has been that a 10% pay rise as a minimum is a fair reward for changing roles, however not in 2022. I have seen staggering pay rises of up to 65% this year, however in absence of other motives for changing a role, we have experienced a trend towards the 20-25% range.
As a result of inflation and low unemployment, we are experiencing more counteroffers than ever before (over 550% increase). Employers and employees know the cost of replacement (if you can replace) is higher than the current salary. Something for both the employee and employer to think about come resignation day.
Working From Home or Back to the office?
There is a great deal of commentary on this topic and is something I would prefer not to add to; however it is the primary driver of Employee unrest and the primary concern for Employers looking to build teams which support business growth. I think the two conflicting comments below highlight the disparity best:
Job Applicant “I didn’t realise companies were going back to 4 or 5 days in the office. I have moved my gym membership close to home”
Employer “If the team think they can do their jobs remotely, then I think we should look at moving their jobs to a lower cost remote location”
We have a long way to go, but for now with low unemployment and limited migration (competition), it is an employee market. This dynamic will change, but not in 2022 (barring a recession).
Lack of Immigration
Australian companies have historically benefited from a migration of junior qualified accountants to fill roles in practice and commerce, including an uninterrupted stream of professionals entering on working holiday visas to support both contract/temporary hiring as well as transitioning into the junior finance market. With borders fully opening in the past few months, we expected the flow of migrants to increase substantially from the lows of the pandemic. However, with Australia’s immigration processes burdened by wait times and stricter requirements compared to overseas competitors for talent such as the UK and Canada, there is far more competition for global talent than pre-pandemic. In addition, Australia’s tough stance on borders during the pandemic scared off many prospective migrants. This has led to a shortage of candidates which will not be abated until the federal government act to loosen the visa requirement, remove backlogs, and hasten the application process.
Market Overview by Level
Junior Market: Newly Qualified Accountant and/or up to 7 years’ experience ($80 – $120k)
Demand: Extremely high demand for Accountants and the newly qualified to 5 years PQE level. Finance teams are flatter and hold a higher number of hands-on Accountants. At this level this is the best job market ever and the best time for any newly qualified Accountant to find a great role.
Supply: Extremely low supply of recently qualified to 3 years PQE experienced candidates. Australia is not producing enough volume and quality in Accounting & Finance professionals, either through the CA firms or as CPA graduates. Prior to the COVID-19 Pandemic, we would often lose newly/recently qualified accountants to overseas travel & working holidays, however there is currently very little immigration to replace & fill the gap.
Supply: Extremely low supply of recently qualified to 3 years PQE experienced candidates. Australia is not producing enough volume and quality in Accounting & Finance professionals, either through the CA firms or as CPA graduates. Prior to the COVID-19 Pandemic, we would often lose newly/recently qualified accountants to overseas travel & working holidays, however there is currently very little immigration to replace & fill the gap.
Middle to Senior Management
Demand: During late 2021 and the first quarter of 2022 we experienced a resurgence in FC & Senior FM roles across the market, this has however tailed off in recent months, reverting to the quietest and most competitive candidate market. We have begun to see the fear of recession creeping into the recruitment approvals process, with a number of assignments being put on hold or changing the scope of permanent appointments to being 6- or 12-month contracts instead.
This recruitment tightening has been added to the pre-existing/pre-COVID themes that will continue to play out as finance function hierarchies become flatter, reducing the demand for Middle and Senior Manager roles. Overall, there are less middle and senior management roles in finance than the beginning of 2020. This will continue for the next few years at least.
Supply: Supply of applicants at the middle management levels in finance is steady and good. The supply is coming from several angles:
Junior Management: Many have not had a promotion for several years and are eager to step up or step out. People looking for a change at same level: Many Middle and Senior Managers have been in the same role for some time and may well have been looking prior to the pandemic, however, have decided it was too risky to change roles for the past 2.5 years. They are ready for a change now.
Immigration/Repatriation: Most returning Australians / highly skilled migrants relocate with an established catalogue of experience, including team management. Relocating Senior Manager/exec finance leaders will take a demotion to return home. Redundancies in the Big 4 Banks and Fintech: This has added to the candidate pool.
This recruitment tightening has been added to the pre-existing/pre-COVID themes that will continue to play out as finance function hierarchies become flatter, reducing the demand for Middle and Senior Manager roles. Overall, there are less middle and senior management roles in finance than the beginning of 2020. This will continue for the next few years at least.
Supply: Supply of applicants at the middle management levels in finance is steady and good. The supply is coming from several angles:
Junior Management: Many have not had a promotion for several years and are eager to step up or step out. People looking for a change at same level: Many Middle and Senior Managers have been in the same role for some time and may well have been looking prior to the pandemic, however, have decided it was too risky to change roles for the past 2.5 years. They are ready for a change now.
Immigration/Repatriation: Most returning Australians / highly skilled migrants relocate with an established catalogue of experience, including team management. Relocating Senior Manager/exec finance leaders will take a demotion to return home. Redundancies in the Big 4 Banks and Fintech: This has added to the candidate pool.
CFO, COO & GM Finance Employment Market
Demand: 2022 has witnessed a recovery in activity levels in the Senior Finance market. The events of 2020 & 2021 led to both employees and employers being very reluctant to change. 2022 has been a year of movement at the Exec Finance level. A changing of leadership across many businesses has created more opportunities for all and in CFO/FD recruitment, one vacancy filled, creates another vacancy elsewhere. The Australian Financial Services Industry Finance market is not infinite. The number of CFOs has not increased and with the current levels of M&A activity, I expect there to be reduced CFO roles in Australia in 2 years’ time.
Supply: Like senior management, there is a long and steady stream of senior expats who have returned home in the past 2 years. This is nothing new, it is the area of the market that has always been the competitive applicant market in Australia. The Senior Finance market is still currently an employer’s market. After a dip in 2020/2021, salary package values being offered currently are now at least back to pre-2020 levels on both base salary and in short- and long-term incentives. Given recent share market performance and global recessionary head winds, one can expect this coming year to be tough on both short- and long-term incentives.
Supply: Like senior management, there is a long and steady stream of senior expats who have returned home in the past 2 years. This is nothing new, it is the area of the market that has always been the competitive applicant market in Australia. The Senior Finance market is still currently an employer’s market. After a dip in 2020/2021, salary package values being offered currently are now at least back to pre-2020 levels on both base salary and in short- and long-term incentives. Given recent share market performance and global recessionary head winds, one can expect this coming year to be tough on both short- and long-term incentives.
Intuitive Recruitment (www.intuitiverecruitment.com.au) is a Specialist Accounting & Finance Recruitment Consultancy servicing the Property, Funds and Wealth Management sectors in APAC.
If you would like to discuss career objectives, job opportunities or are looking to hire in your team, please contact Iain McLeod at [email protected]
If you would like to discuss career objectives, job opportunities or are looking to hire in your team, please contact Iain McLeod at [email protected]
