2018 market insight...salary & market trend report market insight 2018 reflected in recent...
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SALARY & MARKET TREND REPORT
MARKET INSIGHT
2018
reflected in recent surveys we conducted with cross sector CFO’s, who expressed that they expect to add to their teams over the coming 12 months, particularly in the services and technology sectors. These findings concur with PWC’s CEO Survey as our respondents said that they were more secure in their roles and more confident about the economic prospects facing their company this year when compared to last year. We expect the market to remain stable, with London enjoying moderate growth in recent times and this is on a par with that of the regions we operate in.
Interestingly, the USA featured across the report as the top destination that finance professionals would consider relocating to, narrowly followed by Australia. Similar to last year’s stats, candidates deem holiday allowance, pension contributions and bonuses as the most important benefits, and encouragingly our data shows that they are currently receiving these benefits. However, our report also reveals that 83% of professionals rank flexible working hours as ‘very important’ but only 50% of employers promote flexible working in their organisations. The survey also shines a light on some work to be done by employers around their diversity strategies, with 17% of respondents not sure if their organisation has an official diversity policy.
I would like to thank the 1,200 people who took the time to contribute to our survey and I hope that you find the content useful. We have made a donation of 25p to our charity partner ‘Solving Kids’ Cancer’ for every response we received.
Best wishes,
Matt WilcoxManaging Director
I N T R O D U C T I O NWelcome to the 2018 Marks Sattin Market Insight report - a year in which we celebrate 30 years of trading.
In this report, we discuss the employment market trends over the past 12 months and take a look ahead for the remainder of the year. We benchmark salaries across our specialisms and provide commentary on what clients are looking for, as well as what factors motivate people to move roles. We hope it will serve as a great tool to both candidates considering their options and hiring organisations benchmarking salaries.
You will learn key insights from our core functions in accountancy, from part qualified up to executive level, both permanent and interim, across financial services, commerce and industry and our specialist divisions: corporate finance, audit & assurance, internal audit, compliance, risk, business change & technology and taxation.
Our analysis covers most major hubs across the UK and Ireland from London and Reading in the South-East, to Birmingham in the Midlands, Manchester and Leeds in the North and Dublin in Ireland, so it provides a very balanced view on the UK and Irish employment market.
2017 was a mixed year for the UK and Ireland – hiring levels within financial services diminished in the South East when compared to previous years; however growth in our regional offices in Birmingham, Manchester and Leeds balanced this out. Employment activity in these locations was spurred by a bounce back in the UK manufacturing industry, thanks to a stronger global economy in more recent times and a more competitive currency. Similarly, the Dublin market is buoyant as organisations set up business units in Ireland as a hedge against Brexit.
The optimistic outlook has continued this year, with hiring levels remaining at what we would describe as consistent levels across the board. This optimism was
N I N T H E D I T I O N
LONDONSPECIALIST MARKETSKey Findings
Audit & Assurance
Taxation
Internal Audit
LONDONElm Yard
13-16 Elm Street
London, WC1X 0BJ
+44 (0)207 321 5000
London - Specialist Markets
K E Y F I N D I N G SMARKET PERSPECTIVE
Compared to the last 12 months, how confident do you feel about the economic prospects facing your company?
Top 5 expectations for your business in the next 12 months*
How would you rate your current job security?
ECONOMIC PROSPECTS
JOB SECURITY
Less confidentMore confident As confident
70% 12%18%
Secure
Insecure
89%11%
77% of respondents were satisfied in their current role
77% of respondents expect a salary increase in the next 12 months
*Respondents could choose more than one answer
43% 43% 43%
27%20%
Increase in staff recruitment
Salary increases Business process/ policy changes
Profitability of business
Increased spend on staff training
CAREER INSIGHT
How has the number of staff in your team changed in the past 12 months?
How has the number of hours changed in the last 12 months?
Top 3 places respondents would consider relocating to in the next two years (outside the UK)*
Top 3 reasons for respondents wanting to relocate*
HOURS WORKED
RELOCATION
HEADCOUNT
*Respondents could choose more than one answer
*Respondents could choose more than one answer
Increased
Decreased
Remained the same
Unsure
42%
18%
34%
6%
37% 12% 51%
Increased Decreased Remained the same
Australia New Zealand37% 27% 27% USA
18% of respondents would not relocate
Average hours worked per week is 36-45
1
2
3
Experience a different culture
New career opportunity
Better work-life balance/ standard of living
London - Specialist Markets
Top 5 reasons for leaving last role*
MOVING ON
Higher salary New challenge/more interesting workCareer development
Better work-life balance Other
35% 30% 24% 22% 16%
*Respondents could choose more than one answer
28% of respondents anticipate changing roles in the next 12 months
SALARIES & BENEFITS
When was your last pay review?
Satisfaction with current remuneration
REMUNERATION
Less than 6 months
6 - 12 months
More than 12 months
Not applicable
30%
37%
11%
22%
63% of respondents received a salary increase in their last pay review
56% of respondents perceive a 5-15% salary increase as acceptable if they were to move roles
Satisfied
Dissatisfied
65% 35%
Yes No No, not entitled to receive one
Benefits considered most and least important when considering a new role
Did you receive a bonus in 2017?
As a percentage of your basic salary, what level was your bonus in 2017?
BENEFITS
BONUS
25 days holiday or more
Company pension scheme
Flexible working (homeworking/flexitime)
Subsidised/free meals
Mortgage relief
Travel benefits/allowances
Most important Least important
58% 24% 18%
48% of respondents were satisfied with their bonus
28% of respondents received a higher bonus in 2017 than in 2016
1 - 9% of salary
10 - 19% of salary
20 - 29% of salary
30 - 39% of salary
55%38%4%3%
London - Specialist Markets
L O N D O NS P E C I A L I S T M A R K E T S
The latter part of 2017 was busy for audit and assurance and this trend has continued throughout the first half of this year. Top 20 firms have lost a large number of professionals to the industry sector and refilling those roles has been a challenge, particularly at the audit senior level.
Proactive beats reactive
It is becoming more and more apparent that in order to secure the best talent, managers have to adopt a proactive approach to recruitment.
Thanks to increasingly sophisticated HR analytical tools, it is now much easier to engage in targeted workforce planning. Firms can assess which employees – or type of employees – are most likely to leave and can pinpoint emerging skill gaps. The key is to no longer recruit for vacancies, but recruit to reinforce the competencies that are in high demand and will be needed in the future.
Furthermore, as auditors fight the stigma associated with their line of work, it is more beneficial to assess the soft skills of a future employee rather than putting all of the emphasis on their technical knowledge. You can teach someone how to lead an audit but you cannot teach them attitude and the ability to build relationships.
Improving the recruitment process
As in previous years, the practice market continues to be candidate driven. Improving recruitment processes is key to securing the best people. The Big 4 firms have struggled with this more than the rest, often missing out on good candidates due to unnecessarily lengthy recruitment processes. They can attract a great deal of top talent, thanks to their strong brands, but that is becoming less appealing to people who buy into first impressions.
A shortage in top talent at all levels means that multiple offers are often made to the same candidate, pushing base salaries up in the process. This, coupled with slow recruitment processes, is the main reason firms are missing out on the best recruits.
The strong appeal of roles in industry versus practice, especially to the newly qualified market, is also a factor. Although this is a difficult objection to overcome, firms need to do more to sell their role, team and firm to prospective employees. Most junior professionals see the attraction of working for a Top 10 firm, but the smaller consultancies have a harder task convincing them to consider their offer over larger firms.
Relocation and visas
There has been a healthy amount of top talent willing to enter the London market from the regions, particularly at the senior and manager levels. There is also a growing pool of equally strong professionals willing to make a move from overseas if they can acquire visa sponsorship. Firms who are open to sponsoring candidates are finding they can secure great resources without much pushback or competition from other employers.
A challenging future
As the talent pool gets smaller the number of vacancies is expected to rise. The threat of multiple offers for the same candidate will take control away from the employer and put it firmly in the hands of the applicant. Managers will have to go the extra mile to retain their staff and plan well ahead in order to attract the best talent.
AUDIT & ASSURANCE AUDIT & ASSURANCE
ACCOUNTS/OUTSOURCING
Junior | Part Qualified
Senior | Qualified
Assistant Manager
Manager
Senior Manager/Associate Director
Director
Partner
Junior | Part Qualified
Senior | Qualified
Supervisor/Assistant Manager
Manager
Senior Manager
Director
Partner
£30,000 - £38,000
£45,000 - £50,000
£50,000 - £55,000
£55,000 - £68,000
£70,000 - £90,000
£100,000 - £130,000
£150,000+
£24,000 - £30,000
£34,000 - £43,000
£42,000 - £50,000
£54,000 - £65,000
£65,000 - £80,000
£85,000 - £120,000
£150,000+
Job title
Job title
Salary range
Salary range
London - Specialist Markets
L O N D O NS P E C I A L I S T M A R K E T S
2018 has been buoyant so far, with tax professionals in high demand from the turn of the year due to January deadlines. This trend is expected to continue throughout the year, thanks to a diminishing candidate pool. The market is very candidate driven, with multiple firms fighting over the same professionals, so line managers need to sell the role as well as assess if the candidate is the right fit.
Candidate pool explained
A key contributor to the shortage of candidates has been the decreasing number of new entrants who choose to go into tax after university. Tax is a niche career choice, and the number of people willing to take the risk of joining it early on has been on the decline over the past four years. The toughest level to recruit has been assistant manager to manager grades in many service lines. Around three years ago, we witnessed a large shrinkage in the number of newly qualified candidates in tax and this has had a knock on effect as these professionals move up to assistant/manager level.
Employers understand this only too well, and as a result, precautionary measures to retain staff and counter offers when recruiting have become the norm, as firms cannot afford to lose talent.
Tax has become a notoriously tough area to hire into, particularly:
• Corporate tax• VAT• Indirect tax
This is not helped by a further drop in available candidates. Consultancies are finding it particularly difficult to attract top talent as candidates tend to opt for the internal roles with industry clients.
Growing emphasis on retention
Promotions are being discussed earlier during appraisals and many people have been promoted or offered a secondment within the firm to keep them on board. Working conditions are improving, with many of the smaller firms moving to larger, more interesting premises and even some of the Top 10 consultancies making efforts to ‘liven up’ their current environment. Agile/flexible working is more common now and the employee experience is at the forefront of the employer’s mind.
Salaries
Salaries have increased slightly due to competition to attract qualified talent. In many cases, smaller firms can be more flexible and reactive with salary offers, compared to larger firms who are often limited by salary bandings.
This year, we have seen smaller consultancies prepared to offer around £5K more than in 2017, in a bid to attract newly qualified tax professionals from Top 10 firms. Large consultancies are, however, beginning to change their attitude towards salaries across the board, and are prepared to show flexibility for the right candidate.
Thanks to a general rise in living expenses – coupled with a lack of bonuses – candidates are increasingly opting for employers who offer higher basic salaries. This focus on basic salary is understandable, given that many candidates at newly qualified manager level are looking to get on the property ladder.
TAXATION
Outlook
Looking ahead, we expect the demand for talent at newly qualified level to remain high as this has been the case in recent years, although we are now witnessing increased demand at the more senior end of the market. A possible reason for this is accountants gaining early promotions to management level as a means of retention are not ready for a jump up to senior management anytime soon. Thanks to continued uncertainty around Brexit, firms are likely to remain cautious about any significant increases in head count.
TAXATION
Tax Senior/Assistant
Tax Assistant Manager
Tax Manager
Tax Senior Manager
Tax Director
Tax Partner
£35,000 - £45,000
£45,000 - £60,000
£60,000 - £80,000
£80,000 - £115,000
£120,000 - £200,000
£220,000+
Job title Salary range
London - Specialist Markets
L O N D O NS P E C I A L I S T M A R K E T S
Market overview
2017 saw a surge of activity in the city within the permanent audit market, with recruitment levels higher than the previous year. The usual post-Christmas ‘hangover’ was absent this January, with many clients commencing recruitment as soon as they returned.
This shift appeared to be prompted by an increase in confidence in the market as well as a push to ramp up numbers to meet regulatory demands. Q1 2018 has seen a large recruitment drive within the IT audit space, but there have also been large pockets of recruitment within niche areas such as Anti-Financial Crime (AFC), electronic trading and data management. This is due to the added complexity of the deals being traded as well as increased pressure from the regulators to strengthen controls across business areas. As a result, teams that were previously at minimum head count have begun recruiting in order to fulfil the requirements of external bodies and to meet the natural increase in workloads.
Specialist areas
Within the areas of IT audit and capital markets, audit recruitment has increased at a steady pace, although requirements have changed to reflect current demands. The main houses in this market are the leading investment banks such as Deutsche Bank, Barclays, HSBC, JP Morgan and Citibank. HSBC are near completion on their Anti-Financial Crime (AFC) hires whereas Deutsche Bank continues to expand its teams. JP Morgan started its recruitment movement early in the year and continues to recruit heavily within the IT audit space as well as the Asset and Wealth Management (AWM) area.
Recruitment across the city has increased in the areas of Anti-Financial Crime and Asset and Wealth Management (AWM), with candidates in a position to demand sizeable salaries. These skill sets have been equally in demand on
the contract side. This was a common theme throughout 2017 and has continued this year, with banks such as HSBC and Deutsche Bank having to respond to fines and having been put on Deferred Prosecution Agreement (DPA). This had led to many high profile moves at senior level followed by mass recruitment at assistant vice president and vice president levels. This has been especially true within Anti-Financial Crime (AFC).
IT audit recruitment has also seen a large increase across the main players, in response to increasing market activity, continued investment in new applications/technologies and a common goal to improve infrastructure.
Breaking the rules
The usual stigma attached to audit has certainly changed over the past couple of years. In Q1 of this year, the importance of having stronger audit departments was highlighted and the traditional Big 4 profiles were not necessarily the ones getting the jobs. There was a higher need for auditors with an analytical mind, strong interpersonal skills and an entrepreneurial drive. The challenging nature of auditing means business knowledge is becoming more important than having an ACA. The stronger candidates have been those able to tighten the gap between the business, controls and technology.
We are also seeing an influx of particularly strong IT auditors on Tier 2 general visas. Banks such as Deutsche Bank and JPM were very happy to accept and onboard those candidates, while others were put off by the process, and as a result, limited their candidate supply.
INTERNAL AUDIT
Diversity
Internal audit has always struggled with diversity, and especially with gender diversity. At junior level this is not a problem, because the ratio of women to men who start out in audit at consultancies is much healthier. The main challenge for employers is retaining these employees as they grow in their careers and move into banking or other financial services firms. Diversity is taking a prominent role and is at the forefront of many line managers’ requirements. There are active initiatives among our clients to ask for a balanced number of CVs from women and men. Marks Sattin has partnered with senior auditors at two top tier financial services firms to help promote diversity within internal audit.
Flexible working environment
Flexible working allowances, particularly working from home, has long been a topic that financial services firms have struggled with. Some houses have taken significant steps to address this for permanent employees, although it has yet to filter down to those contracting.
Desk space has been a challenge in the city, as large organisations have sold office premises and needed to introduce working from home policies to accommodate
their staff. Deutsche Bank is a prime example of this, having sold off its 175 Bishopsgate offices followed by 1 Appold Street (and more) in 2017. They have openly said that this has left only 80% capacity for their workforce and has paved the way for the majority of their permanent employees to work from home one day a week. Certain areas are benefiting from two days working from home, although this is currently being managed on an ad-hoc basis.
Flexible working is extremely topical in the permanent employment landscape at the moment, with employers taking this into consideration when finalising their offers. However the vast majority of audit professionals are still based in or around the city as the nature of the job requires them to be predominately office based and have face time with their stakeholders in the business.
Salaries
Salaries have generally increased across all levels within internal audit. The more specialist/niche the role, the higher the salary demanded.
INTERNAL AUDIT
Associate
Assistant Vice President
Vice President
Director
£60,000 - £70,000
£75,000 - £85,000
£110,000 - £130,000
£150,000 - £190,000
Job title Salary range
LONDONElm Yard
13-16 Elm Street
London, WC1X 0BJ
+44 (0)207 321 5000
NORTH WESTWeWork, No. 1 Spinningfields
Quay Street
Manchester, M3 3JE
+44 (0)161 507 3090
THAMES VALLEYThe White Building
33 Kings Road
Reading, RG1 3AR
+44 (0) 118 907 8240
YORKSHIREPark Row House
19-20 Park Row
Leeds, LS1 5JF
+44 (0)113 242 8177
MIDLANDSFloor 2
3 Brindley Place
Birmingham, B1 2HL
+44 (0)121 231 7150
IRELANDRegus House, Harcourt Centre
Harcourt Road
Dublin 2
+353 (0)1 477 3118
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