Salary Trends For London
London has always been a micro-climate which gives a good indication of how salary trends are going to roll out to the rest of the country. While the economy is still feeling the waves of the 2008 credit crunch in the quick rise of inflation and slow rise of salaries, it seems 2014/2015 are the years for increased optimism and rises in salaries and bonuses.
So much is optimism for 2015 on the rise in London, research by Robert Half recruitment expects companies to expand their teams and actually be able to invest into new initiatives. The biggest shortage in the job market in 2015 is set to come in the way of finance professionals. Finance professionals who are able to deal with budgeting, forecasting, margin analysis and cost efficiency are set to be the highest in demand. The reasons for skills shortages are intricate and hard to explain, however there are 3 main reasons set out. 30%, in general, is demand outweighing supply. Unfortunately the demand for people in any area of the finance industry is growing as the economy is getting back on it’s feet.
40% of the shortage accounts for a lack of niche, technical experts. This large percentage accounts for most of the cases of the staff shortage. 23% is accounted for by a lack of commercial business skills. With these shortages in mind, it’s no wonder that CFO’s are increasing salaries to compete with other CFO’s for the small pool of finance experts available in the market. Not only are CFO’s increasing salaries, but they are also showing more flexibility in recruiting interim and temp employees to cover the shortages.
Although this works out more expensive a lot of the time, it is the only way CFO’s are able to employ the relevant skill set. Temporary jobs and interim jobs in demand at the moment include: Systems and Transformations Experts, Business Management/Information Specialists, Financial Planning and Analysis Professionals and Accounts Assistants.
Faced with the prospect of having a serious lack of certain skill sets within the financial sector, how are CFO’s giving incentives to new employees?
Salary is the most obvious incentive, and 63% of London CFO’s plan to increase salaries in 2015, and the average raise is by 7% from the 2014 salary figures in 2015. A Commercial Financial Controller based in London would be set to go from the 2014 figures of £87,000 a year to £101,600 a year to the new average being projected for 2015 at £90,300 to £106,100 for an SME. This represents an average of a 4.1% raise for Commercial Finance Controllers in SME’s. For large companies, a Commercial Financial Controller that earned £90,900 to £108,700 in 2014 could be set to earn between £96,400 to £111,600 in 2015, representing a 4.2% rise.
Finance Directors are also set to benefit from the skill shortage. In 2014, an average Finance Director in SME’s would earn between £78,400 to £127,000. The rise in 2015 would see a Finance Director for an SME set to earn £80,300 to £131,900. This sees an average rise of 3.3%. A Finance Director in a large company in the city, in 2014, could expect to earn between £90,300 to £159,300. The rise in 2015 would see the same Finance Director for the same sized company earning between £97,700 to £161,900. This is a rise of 4.0% exactly.
A Compliance Manager for an SME in 2014 would of been looking at earning an annual salary of £68,000 to £83,000. In 2015, the rise would see them earning £70,600 to £82,200, representing a rise of 3.0%. A Compliance Manager working for a large company would have earned an average annual salary in 2014 of between £75,500 to £83,900 but this is expected to rise in 2015 to £76,400 to £88,400, which is an average rise of 3.4%.
Lower down the scale, salaries for jobs roles such as Assistant Accountants, Credit Controllers, and Purchase Ledger Clerks are set to rise from between 1.6% to 4.1% in 2015 from 2014’s figures.
Remuneration packages are also set to become a lot more beneficial to the employee in 2015, however options are divided CFO to CFO on what remuneration package is the most attractive benefit. From things such as tablets, laptops and mobiles to cars which have net value, to things like mentoring and subsidized training which can be used to further career options. As well as attractive salaries and remuneration packages, CFO’s are pulling out all of the stops to fish the pool of talent and attract employees in the finance sector to work for them rather than competitors. 6 out of 10 London CFO’s are now actually offering a ‘sign on bonus’ to attract talent.
The struggle for CFO’s to find a certain skill set is clear, and doesn’t lot set to change in 2015. Although this is bad news for the CFO’s, this certainly means people in the finance sector can expect better wages and benefits well into 2015.