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www.badenochandclark.com Market insight Accountancy & finance 2015 Quarter 1

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www.badenochandclark.com

Market insightAccountancy & finance

2015 Quarter 1

04 London

08 West Midlands

10 Northern Home Counties

12 East Midlands

14 Midlands Executive

18 East of England

20 South East

22 North East

ContentsAccountancy & finance

Our accountancy & finance team is a trusted partner within

the market, providing insight and expertise across our

specialist sectors.

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Despite budget constraints within some of the softer industries, the current accountancy & finance market is continuing to show positive and steady signs of growth from most sectors, particularly property, construction, infrastructure, media and retail. Consistently high job flow and market demand have characterized the accountancy and finance sector during Q4 2014 and early 2015.

Skill sets in demandTight budgets have fuelled a preference across all industry sectors for hiring on fixed-term contracts rather than on daily rates. The trend, accounting for more than 50% of non-permanent roles, has decreased the candidate pool for many companies, allowing more flexible businesses to acquire the best talent.

Due to a high demand for technical accountants, the construction and property sectors tell a slight different story - a 25% increase in roles for daily rate contractors with fixed-term contracts remaining steady.

Candidate applications remain high for available roles, but with clients taking their pick of ‘A grade’ shortlists, applicants without the required industry-specific skills remain left behind. Moving into 2015, the demand for niche sector experience has become even more prominent, with more than 65% of all roles taken requiring an industry track record.

London

We’ve seen a notable increase in candidates entering the market from the

following industries compared to the same quarter last year:

Mediaincrease of

22%Technologyincrease of

214%Propertyincrease of

18%

Candidates

Media

Legal

PracticeOil & Gas

FMCG

Technology

Property

25% increase in roles for daily rate contractors with fixed-term remaining steady

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Jobs outlook Across all industry sectors, newly-qualified accountants have been consistently sought after throughout 2014 and 2015, with candidates from top 10 accountancy firms achieving premium salaries and multiple opportunities. Similarly, part-qualified candidates in the fiercely competitive temporary market can take their pick of roles where pay, benefits and increased security outstrip typical market rates.

But the recruitment drive doesn’t stop there. 2015 has shown a sharp increase in demand for finance expertise at all levels - from part-qualified accountants to senior strategic finance roles within the professional services sector. And while in-house recruitment teams continue to handle a large proportion of their own hiring, many businesses have looked to specialist recruiters to pinpoint hard-to-find candidates, such as technical senior accountants.

In our part-qualified market, clients are particularly interested in offering candidates temp to perm opportunities, due to the new ‘need for speed’ when recruiting. The most sought after candidates are not on the market for long, and handover periods are becoming more paramount than ever.

Looking ahead While reduced oil prices may bring about a reduction in roles across the oil and gas industries over the next six months, we expect a rise in opportunities in professional services. With organisations continuing to go through acquisitions, investments or mergers, we anticipate an increased hiring across project-focused teams, and for businesses with private equity-backed or group investors to maintain a steady incline.

Job flow has remained high across most industry sectors, with most significant increases in the

following industries compared to last year:

FMCGincrease of

24%Technologyincrease of

44%Propertyincrease of

10%

Jobs

Media

Legal

PracticeOil & Gas

FMCG

Technology

Property

London

Current highly competitive market conditions means time to hire is continuing to decrease with the average placement taking 10% less

time to fill than this time last year.

In our part-qualified market, clients are particularly interested in offering

candidates temp to perm opportunities

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West Midlands

The improved economic climate has boosted salary and hourly/daily rates and increased confidence, giving rise to a self-sustaining job creation economy, which is reflected in the latest figures.

We have experienced job surges across a number of sectors, including an upturn in automotive manufacturing in the West Midlands, including growth within Jaguar Land Rover, and an increase in the property market as a whole, as occupancy in commercial units rises and new developments are built. Challenger banks are on the rise as growth returns to the financial services sector, and expansion continues within the construction market.

An optimistic economic outlook has also fuelled the trend for blue chip companies using shared service centres for accounting, driving demand for transactional staff with relevant experience of processes. As business units are near-shored and off-shored into existing shared services, European language speakers in transactional functions are in high demand, as companies balance the needs of a centralised accounts function and a localised customer and supplier communication strategy.

As expected, as we come out of recession, there is upwards pressure on salaries and rates due to an imbalance of supply and demand. Permanent salaries grew in February and the rate of growth has been constant going through Q1 2015. According to the KPMG/REC report on jobs released on 6 March, “temporary/contract staff hourly pay rates also rose further, with the latest increase stronger than seen one month previously”. As the market further improves, there is no reason to doubt that this trend will continue.

Client pressuresAs market confidence improves, our finance clients are struggling to retain talent. Permanent staff who sat tight during the recession are now venturing into the jobs market, finding multiple opportunities with higher pay and individually tailored benefits packages.

But despite the generous rewards on offer, companies are still battling budgetary concerns, and purse strings are bound tightly when recruitment budgets are set. To keep pace with a rapidly recovering market, firms must be quick to adapt by allowing some flexibility, not just in overall budgets, but also in specific roles. Projects that could be beneficial to businesses are often hampered by line managers not having budgetary sign off to increase head count, pushing top talent to seek progression opportunities elsewhere.

In the race to secure skilled applicants, time-to-hire has dropped dramatically, with companies struggling to maintain protracted recruitment practices. Permanent candidates are offered as early as first interview stage, while some companies sidestep the process completely, taking on temporary candidates after a simple CV review or phone conversation.

New topics / industry pressA number of planned changes around UK GAAP will be coming into force later this year, mirroring the FRS 102 adjustment at the end of 2014. Companies are preparing current staff for the revisions, pushing demand for specialist contractors with knowledge of the adjustments.

Skills in demandWe have recently seen a number of industries – manufacturing and retail in particular – demanding more detailed analysis of sales and margins to help with future bids and pricing strategies, pushing the need for candidates with solid FP&A and decision support experience. Recently qualified ACA candidates are also being snapped up, especially those who boast experience of complex modelling using Excel / VBA.

Business Partnering remains a hot topic, with companies increasingly using the title for generalised management accounting positions involving limited, but not strategic, stakeholder engagement.

And as more companies expand their existing shared services or near-shore them to Birmingham, candidates with experience in these environments and their processes are very much sought after.

In financial services we are seeing an increase in challenger banks and growth returning to that sector

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After a quiet start to the year, job flow increased dramatically mid quarter. Compared to the same period last year, Q1 2015 shows the number of permanent roles registered has increased by 20%, while interim roles rose by only 5%. This follows a similar pattern to Q4 2014, demonstrating investment in permanent hires, longer-term growth plans and continuing business confidence. Opportunities have sprung from a variety of sectors, with larger organisations recruiting multiple roles at similar levels - and many competing for the same candidates.

Northern Home Counties

Looking ahead Over the next six months, we anticipate continued competition for candidates with 1-3 years post-qualification experience and an increase in roles at the transactional level. We also expect to see companies prepared to hire staff at a more senior level (both in salary and responsibility) where the candidate can demonstrate proven experience to make a genuine impact on the business.

At the more junior end of the market, candidates continue to move between positions that offer them a better rate and work/life balance. We expect this to stay on track as job roles increase and more permanent opportunities become available.

The interim market in 2015 has seen increased demand from a large number of the region’s larger blue chip employers and this looks set to continue into Q2. Organisations who, in the past, have restricted growth of their workforce due to lack of economic

Client pressuresDemand for top applicants is still high, with upper quartile candidates receiving multiple offers from prospective employers. As such, it is important for companies to move quickly in the recruitment process, offering a flexible ‘out of hours’ approach to interviewing to suit candidate availability.

Jobs outlookWe have noted a marked contrast in the level of roles registered, with part-qualified, transactional roles and £50k+ roles outstripping last year’s demand for £35-£45k level positions. Businesses are still on the lookout for first time movers from practice, and candidates from top 10 firms are becoming as sought after as big 4 trained professionals, particularly in the technical accounting areas such as audit and financial reporting.

increase in part-qualified & transactional roles

£50k+ roles outstripping last year’s demand for £35-£45k level positions

Generally the interim market is buoyant and the number of roles has increased markedly on last year.

stability are now increasing headcount to relieve pressure on their existing team, ensure retention of good people, and to allow their business growth to continue.

Generally, the interim market is buoyant and the number of roles has increased markedly on last year. We are now beginning to see return to genuine interim or daily rate contractors as employers consider more specialist solutions, not available on a fixed term contract basis. While many businesses were pushing back on costs and perceived the fixed term solution to be more cost effective, they are now realising the demand for top talent is giving professionals with niche skills the opportunity to charge a premium for their services again.

This interesting scenario will continue to play out over 2015 as a candidate-driven market results in the daily rate/timesheet solution emerging once again.

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East Midlands

Q2 2015 continues to see an increased demand in the market, with Q1 achieving a 48% increase in jobs compared to Q1 2014, and a 10% increase in vacancies compared to Q4 2014. The growth is dominated by permanent vacancies, particularly in the part-qualified market, and especially for Assistant Management Accountants at the £23-28k mark, with 42% of jobs registered in Q1 at this level.

While 40% of roles registered in Q1 came from the manufacturing and construction sectors, we have also witnessed an upturn in retail roles, and a boost in the banking and financial services sectors due to new regulations and IFRS.

The interim and temporary market continues to grow, with employers enjoying stronger trading and profits and a more positive economic outlook. Our own interim business is dealing with a surge in demand for support on commercial projects such as mergers and acquisitions, business unit integrations, restructuring, and systems/process upgrades.

As competition for top talent heats up, employers must become more agile and flexible in their approach to recruitment

Client pressures

Employers must become more flexible in their approach to recruiting top talent; such as offering out of hours, telephone or Skype-based interviews to suit candidate availability. And with only one chance to secure their candidate of choice, businesses must engage with applicants positively from the start and position their package in the most competitive light.

With top candidates fielding multiple offers, effective on boarding and regular contact during applicants’ notice periods are becoming ever more vital elements of the recruitment process.

Looking ahead

As the market has become more buoyant, we have seen increased activity from previously passive job seekers who are now more confident to take the next step in their career - either for progression or to gain wider experience from a different sector, business or role.

This trend is forcing employers not only to focus on attracting the best talent, but also to retain their best performers. Strategies such as salary benchmarking and enhancement of broader benefits offering are driving increases in remuneration packages across the region.

increase in jobs compared to Q1 2014

of roles registered in Q1 came from the manufacturing and construction sectors

48% 40%

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Midlands Executive

The general uplift in demand and business confidence that marked the end of 2014 has continued into Q2 2015. The senior market (£60,000+) has seen a 15-20% increase in new jobs compared to last year, with clients more willing to commit to offers, rather than simply testing the market.

Over the last 12 months, candidates who have postponed a career move when the market was less buoyant are now actively looking for new opportunities.

Jobs outlook

Still considering it a ‘buyer’s market’, clients continue to pick and choose candidates with a specific mix of qualifications, sector knowledge and ownership structure (such as PLC, VC backed or private) experience. This can prove frustrating for individuals with varied backgrounds and transferable skills, who are often edged out by applicants matching the client specification more closely.

Skill sets in demand

Technical expertise is taken as read in the senior market, but those candidates with additional skills in business turnaround, acquisition/disposal, restructuring, commercial finance, business partnering and decision support are in particularly high demand. Clients are also seeking professionals with the ability to influence strategic decision making and add genuine, tangible value to their business.

While the executive market continues to be job short and candidate rich, there is still a degree of latent demand. Over the last 12 months, candidates who may have postponed a career move when the market was less buoyant are now actively looking for new opportunities.

Clients are seeking professionals with the ability to influence strategic decision making.increase in the senior market (£60,000+) in

new jobs compared to last year

15-20% Looking ahead

The outlook is generally positive but tempered by uncertainty around the general election result, with the strong possibility of a hung parliament, challenges in the eurozone and the possibility of deflation in the economy and its effect on interest rates.

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East of England

Business in the region is booming following the unveiling of a blueprint for growth that could see 250,000 jobs created in the East of England by 2020.

Looking ahead

Stansted Airport has also unveiled a jet-heeled growth strategy that will make the airport a growth powerhouse in the East of England, East London and along what is known as the “the burgeoning London-Stansted-Cambridge corridor.”

This investment in the region’s transport links opens up countless opportunities and cements a bright future for the wider region. The strategy will play a key role in the region’s long-term success by providing the international connectivity needed to make this part of the UK a great place to live and work.

Skill sets in demand

Underpinned by billions of pounds of investment, the growth across the region looks set to spread east of Cambridge to the rapidly expanding Port of Felixstowe where a new £200 million development of the docks was recently announced. Growth areas such as this are key to our own plans in the region, where our team specialising in the Transport & Freight sector have seen a 50% increase in new vacancies.

Job outlook

Also within East Anglia, a new £15 million technology centre was launched at Cambridge Science Park. The move adds further proof that Cambridge has the highest future growth potential of all areas outside London, according to financial and business advisers Grant Thornton. The findings show that, although London tops the overall rankings with nine of the top 10 dynamic growth areas, Cambridge leads the way outside the capital.

This enormous growth across the region is attributed to the large number of high-value, knowledge-intensive businesses in the city and a supportive environment for enterprise. Cambridge’s young, diverse and economically active workforce, coupled with strong transport and IT links, also contribute to a robust, economically resilient location.

A new £15 million technology centre was launched at Cambridge Science Park.

Investment in the region’s transport links has created new opportunities.

development of the Port of Felixstowe docks was recently announced

£200increase in the Transport & Freight sector new vacancies

50%million

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Q4 2014 and Q1 2015 have delivered consistent growth, both in permanent and contract roles. Compared to most of last year the notable shift is in the marked improvement in interim requirements.

Clients are recognising there is a war for talent in the South East. Competing with London (as it is commutable) means the increase in demand is not matched with the volume of high calibre candidates, especially in the permanent market for Finance. Given that this level of competition has not shown any sign of subsiding, the level of interim roles has increased by 20%, whilst permanent candidates are recruited typically with a 3 months’ notice period.

Client pressuresHiring clients have been caught unawares in two areas - the challenge of dealing with multiple offers and the painful experience of candidates taking counter offers. Clients should demand longer shortlists in order to make an offer to a second candidate, rather than start a new process.

Creative interview techniques, such as supporting our clients in better ‘selling’ their opportunity at first interview, and a “managed interview process” which gives our client the opportunity to run an interview process in our offices, feeding back in real time, have dramatically reduced the speed to recruit and the chance of other offers being made during a delayed selection process.

Skill sets in demandThere has been a 15% increase in roles requiring ACA newly/recently qualified accountants, whether moving into internal audit/compliance or into a more traditional group reporting structure.

In the senior space, there has been a 20% increase in Executive roles (£80k+) – of which 75% of these came from the SME markets.

At the opposite end of the spectrum, clients have seen an increase of 25% increase in Part-Qualified roles (of which 75% were permanent in blue chip, corporate clients).

Unfortunately, candidates are not readily available – similar to our newly qualified market – but our long-term ethos in managing strong candidate relationships early in people’s careers has proved successful.

South East

Areas of growth (QoQ)

Technology Travel InsuranceConstruction & Infrastructure Pharma

20% 22% 33% 15% 12%

Within the accountancy & finance sector, we have seen a marked increase in demand

for the following skills:

Technical/Financial Reporting

Finance Business Partnering/FP&A

Internal Audit & Compliance

Consolidation in many of these industries is planned for 2015/2016 however this only highlights the importance of finding outstanding talent which is going to add value during turbulent times.

Looking ahead The insurance market is heavily regulated and with the Solvency 2 pillar increasing workload across this sector, there has been an increase in interim roles (30% more than last year) and we expect to see this continue throughout 2015.

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North East

The conditions in the North East have been positive since the beginning of the year. We have experienced strong job flow within both the non-qualified and qualified finance markets with over 40 vacancies registered in January and February. Demand within the permanent market has increased showing a 30% increase from 2014; on the other hand temporary job flow has been stagnant.

Candidate sourcing

There has been a considerable step change in our candidate sourcing strategy. Fewer candidates are applying to live advertised vacancies. The biggest market change is that of the move from a client led to candidate driven market. This has put pressure on salaries within the local market place and our clients’ expectations of salary package.

As a result employers need to focus on the passive candidate pool now more than ever. The recruitment drive which we saw in H2 2014 in the North East has reduced considerably the immediately available pools of talent. Clients need to look beyond the basic salary; showcasing their benefits packages, working flexibility, culture and professional progression to entice the passive candidate into taking the next career move.

Client pressures

Employers need to focus on retention strategies, as market confidence grows candidates are now focusing on their next logical progression steps. With SMEs now willing to pay a premium to secure highly desired skills, the focus needs to shift internally to keep top talent rewarded and engaged.

Skill sets in demand

Quarter one skills in demand include; Analysts, Management Accountants and Financial Controllers as our clients gear up for growth. We have seen a demand in Audit with our top 10 firms increasing jobs in the North East region and expanding their portfolios and creating new divisions.

Looking ahead

The landscape over the next 6-12 months is extremely positive as we have seen significant investment into the NE. The government has signed a £350million growth deal to boost the local economy. Nissan has plans to expand throughout 2015, with the continued success of the Qashqai and electrical vehicle market. This has had a knock on effect to Nissan’s supply chain with an increase in demand and therefore the need for talent. Oil & Gas and Service industries remain strong and we expect the demand in the A&F permanent market to remain strong in these sectors.

The government has signed a £350million growth deal to boost the local economy.

Employees need to look beyond basic salaries, and consider their wider benefits and flexible working package.

increase of the demand within the permanent market form 201430%

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© Badenoch & Clark 2014. All rights reserved. The information contained in this publication is intended for general purposes or guidance only. It does not purport to constitute professional advice. Badenoch & Clark accepts no liability for the accuracy of the contents or any opinions expressed herein.

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