accounting & finance recruitment market trends summer 2010

8/14/2019 Accounting & Finance Recruitment Market Trends Summer 2010

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Recruitment Market Trends Summer 2010

Accounting & Finance RecruitmentAustralia


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Ambition Market Trends Summer 2010 | 2

Introduction2009 proved to be a challenging year for employers, employees and recruitersalike, with local economic conditions being defined by a global financial crisisand a large degree of caution about the future.

The employment market, always the first to be hit by economic downturns,took some real blows in the first six months of the year, with companiesbattening down the hatches for what many commentators believed was goingto be a stormy year ahead.

As 2009 draws to a close however, there are a number of signs that the worstof the storm clouds may have passed us by. The financial markets are bouncingback with unrestrained enthusiasm, business confidence is booming and theunemployment rate continues to decline all positive indicators foremployment market prospects in 2010.

For employees, this is undoubtedly good news. For those currently looking forwork, the expanding economy represents an opportunity to re-enter theworkforce under favourable terms. For those already working, an increasingnumber of positions will allow employees to turn their attention from jobsecurity, back to career development (not to mention the opportunities forimproved remuneration).

Whilst employers welcome the improving market conditions, they will also needto be prepared for the recruitment and retention challenges ahead. Companieswho react slowly to the change in conditions are in danger of losing keypersonnel, and those who intend to win the war for talent that is currentlybrewing will need to analyse all aspects of their recruitment strategies toensure they are capable of competing in an increasingly aggressive

marketplace.

In such an environment, the value of working with a trusted recruitmentadviser has never been more apparent. Changes in market conditions will bringboth challenges to face, and opportunities to explore.

At Ambition, were looking forward to meeting them both.

Gavin HouchellManaging Director, Ambition Finance


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ContentsIntroduction ....................................................................................................................... 2Economic Overview ......................................................................................................... 4Ambition Accounting Jobs Index ................................................................................. 5Demand Factors - Whats Happening Now? ............................................................. 6

Ch-Ch-Changes .......................................................................................................... 6

Still an Employers Market - for now ................................................................... 6

A Focus on Internal Skilling ................................................................................... 6

Opportunities for External Up-Grades ............................................................... 7

A Surprisingly Active CFO Market ........................................................................ 7

Strong Demand for Management Accountants - and others ..................... 8

Temporary and Contract Roles on the Up ......................................................... 8Sector Notes ................................................................................................................ 8

Supply Factors Whats Happening Now? ............................................................ 10Still Plenty of Accountants Looking for Work ...............................................10

Aspirational Fluidity ...............................................................................................10

Lowered Salary Levels = Increase Risk of Flight ............................................10

Bonuses, STIs and LTIs ..........................................................................................11

An Attractive Employment Destination ...........................................................11

Future Trends .................................................................................................................. 12The Oncoming Challenge of Retention ............................................................12The Need to Refresh the Employer Brand .......................................................12

Speed Will Kill ...........................................................................................................12

More Information ......................................................................................................... 13About Ambition ............................................................................................................. 13


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Economic OverviewWhilst there can be little doubt that the Global Financial Crisis had a strongnegative impact throughout the last twelve months, early indicators suggestthat Australia may have come through the worst of the crisis in comparativelygood shape.

The resiliency of the Chinese economy and their demand for Australianresources, along with aggressive fiscal and monetary policy by the FederalGovernment combined to limit the damage witnessed in other parts of theworld, as the global economy constricted rapidly in response to deflatingfinancial markets.

Thats not to say Australia has come through the crisis unscathed, with manysectors of the employment market feeling the brunt of declining businessoptimism, plummeting company profits and in many cases, a negative flow oneffect from overseas head offices that were suddenly hemorrhaging cash.

February 2009 saw historically low levels of confidence in the Australianbusiness community, as the effects of a global recession began to hit home.March saw record lows at the ASX, with the value of shares being slashed some3000 points from the previous year reducing the value of Australiancompanies across the board. With share prices in free fall, and businessconfidence in decline, companies began the hard work of reducing theirbusiness expenses, leading to significant increases in the jobless rate.

Unemployment hit a high of 5.8% in September 2009, an increase of 1.7% onthe previous year, and currently sits at 5.7%. This rate was at one point tippedto reach as high as 9% by some commentators and the Federal GovernmentsBudget forecast suggested that rates around 8.5% were probably to be

expected.

But over the last few months the Australian economy has bounced back, asinternational policy initiatives have begun to take hold and the global recessioncomes to an end. Whilst there probably cant be any real confidence about arecovery until US housing prices level out, many international organisations arerevising their global growth forecasts up particularly in the emerging Asianeconomies.

This, combined with the strength of the Aussie Dollar and our comparativeadvantage in the export of primary products has left Australia in a relativelystrong global position - and as the service sector returns to the business ofprofit and growth behind increasing corporate confidence, there are

encouraging signs for a return to a progressive and expanding employmentmarket over the next twelve months.


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Ambition Accounting Jobs IndexAs evidenced in Ambitions Accounting Jobs Index, 2009 has been a difficultperiod for the Accounting employment market, with year on year growth down

across the board, and a steady decline throughout the first six months of theyear (the index began at 100 in May 2003).

Obviously this reduction reflects the economic conditions both locally andacross the globe, with demand in most sectors declining, and businessconfidence slumping.

Over the last few months though, we can see the first few, tentative signs thatconditions have changed. The declining rate experienced in the first twoquarters has halted, and appears to be heading back in the right direction,moving from a low of 164 in August, with positive monthly results over the lastthree surveys - an excellent sign that after a year of turmoil and setbacks, themarket is finally turning the corner.

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Demand Factors - Whats Happening Now?Ch-Ch-ChangesThe last nine months have seen a sustained period of corporate re-shaping, ascompanies worried by declining financial conditions have acted to ensure theirbusinesses were as lean and efficient as they can be.

Whilst there have been some cases of wholesale redundancies, the process hasgenerally been conducted on a much smaller scale. Employers have tended tofocus on specific headcount redundancies, refining their teams in strategicareas with a trend toward eliminating non-core business roles.

Companies who may have been in a position where a number of staff hadnegotiated inflated salaries during the previous period of employee scarcityalso used this opportunity to balance the books, achieving the twin aims ofmarket correction and payroll minimisation with the one move.

Still an Employers Marketfor nowThe flight to quality continues at the end of 2009, with demand foraccountants still being out-stripped by supply, and employers continuing toenjoy favourable market conditions.

Whilst we are beginning to see signs of that dynamic shifting, right nowemployers remain selective in their demands for high quality staff, with anexact fit approach. This is a complete reversal from 12-18 months ago, whendemand for accountants substantially exceeded supply, and employers were

often forced to be flexible in their wish list for a prospective candidate.

As the market picks up however, the employers relative position of strengthover the employee will begin to dissipate. Already we are witnessing shifts inemployment strategies, as companies begin to consider not only how they aregoing to secure the best possible candidates, buthow they are going to retainthose candidates over an extended period of time.

After all, what is the point of attracting top level employees if you are unableto retain them when the market turns around?

A Focus on Internal SkillingWith hiring freezes and limited resources, companies have been faced withlimited options in order to achieve their business goals with a constrictedworkforce.

One option however, has been to focus on up-skilling or cross-skilling currentemployees and plenty of companies have done just that. Where as previouslyaccountants may have had one main area of expertise or they became morespecialist, many found themselves working across a number of different fields.Necessity is the mother of creativity, and with limited resources a number ofemployers got inventive with job descriptions.

Working in a number of areas (or doing the work of a number of people depending on who you ask) creates different dynamics; the risk of loweringemployee morale or increasing the burnout rate in the short term, but on the


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flipside, the opportunity to develop new skills and gain a deeper businessacumen.

As the market turns around, many employers may discover that this will be adouble edge sword - and that by broadening their employees range of skillsthey have created a problem for themselves. Employees, buoyed by their ability

to handle several roles in challenging economic conditions look to gauge thevalue of their new found skills on the open market or the prospect of returningto roles post economic downturn.

Opportunities for External Up-GradesMany employers have taken advantage of the favourable employment marketconditions to upgrade the quality of their finance team at a much reducedprice.

With salary reductions of up to 10-20% being quite common, and reductionsof up to 30% not being unheard of, some employers were able to inject theirteams with substantial skills and significant experience at a cost that wouldhave been impossible just twelve months before.

In the long term of course, the question will be whether or not these employeeswill stay with a business at their reduced rate once the market turns around. Inthe short term however, the advantages for employers who are enjoying toplevel talent and bargain basement prices are clear.

A Surprisingly Active CFO MarketThe senior finance recruitment market has had a degree over activity, partly

driven by the fact that boards and CEOs have had to turn to their CFO to steerthem through a very challenging twelve months which has resulted in a fairdegree of changing of the guard.

Accordingly, opportunities have arisen for replacing, upgrading or downgrading(in situations where companies were looking for cheaper solutions) CFOs - witha mandate to guide companies through substantive financial turmoil. In manyof these cases the market turned to a voice of experience, and a degree ofmaturity and finance operational experience has been sought after.

Theres no substitute for experience, as they say, and throughout the last sixmonths the market has generally tended to agree.

Having said that, the market sentiment today has increased dramatically fromthe previous six months, and organisations are now beginning to talk seriouslyabout succession planning, as well as talent attraction and retention.Candidates in this space who possess great technical, communication andleadership talents, specifically with appropriate operational skills within a givensector have the opportunity to flourish as the market rebounds.

Strong Demand for Management Accountantsand othersIn recent years demand has been strong for technical accountants particularly those with a love of standards. In these less buoyant economic

times however, we have seen a drive toward Management Accountants including analysts and performance reporting professionals, as companies lookat ways to reduce their cost and improve their revenue streams.


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In many situations, these new hires came with a mandate to reduce staffinglevels, so Management Accountants with sound communication and peopleleadership skills, who were able to make structural changes without causingundue panic and hostility within the workplace have been at a premium.

Risk professionals have remained in great demand no longer seen merely asadvocates for better corporate governance, they have become importantstrategic resources to many businesses as they seek to proactively prepareagainst worst case scenario situations. As the globe focuses on compliance andregulation frameworks and prepares to introduce new standards, the demandfor these professionals will continue in the upcoming years.

At the lower levels plenty of opportunities have existed for high qualityaccounts, credit control and payroll staff, a direct reflection of the skillsshortage that market sector has experienced in recent years.

In recent months weve also seen a slight increase in project accounting roles,an indication that perhaps the focus has started to shift from cash

management and cost control, into growth related opportunities.

Temporary and Contract Roles on the UpWhilst not yet at the levels that would illustrate a definitive trend, over the lastfew months we have witnessed an increase in the number of temporaryassignments going to market, as companies take the first tentative steps towardre-stocking their depleted staffing levels with new talent.

Similarly, there has been an increase in fixed term contract offerings arrangements that not only reduce a candidates flight risk in the short term,

but also provide a company with a way to get around full time employmentheadcount freezes that have been applied at a national or international level.

With temporary and contract roles considered to be lead indicators ofemployment market trends, both the increase in temporary assignments, and agradual trend toward temp-to-perm offerings can be considered very positivesigns.

Sector NotesRetail Banking StrengthThe Australian retail banking market has shown genuine robustness in difficulteconomic conditions, outperforming a number of international competitorswho struggled to remain buoyant throughout the global economic crisis.Comparatively strong profits and well developed retail bases make this sectorone of the best candidates to experience real growth over the next twelvemonths, as well positioned banks take advantage of their strong capitalizationto acquire new income streams in service delivery and wealth managementfields.

This expected period of consolidation should in turn provide plenty ofopportunities for savvy financial and management accountants, as well asanalysts with skills and experience in both corporate acquisition, bankingprocess and of course business integration.


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Mining and Commodities ActivityUnderpinned by the relative strength of the Chinese economy, and thesubsequent ongoing demand for resources, the mining and commodities sectorhas been another shining light throughout the recent tough economic times.Accordingly, demand for accountants at all levels of the market has remainedstrong, with many senior management and financial accountants moving across

from other industries to enjoy the comparative job security this sector has tooffer.

Other Areas of InterestSectors with relatively stable demand, such as FMCG companies involved instaple goods (pharmaceuticals, food and beverages), along with utilities, health,education and certain government sectors all remained comparatively buoyantover the last twelve months, with deteriorating economic conditions doinglittle to alter their basic business model.

Other areas, such as the retail sector, property and the media and leisure

industries suffered significant setbacks, particularly the SMEs or highlyleveraged businesses. A number of investment banks also took a hit during thisperiod, particularly those with international parent companies that wereexposed to worse conditions than those experienced by their local counterparts.Similarly, funds management companies have typically contracted a directresponse to declining profit margins and disappointing returns.


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Supply Factors Whats Happening Now?Still Plenty of Accountants looking for workDespite improving market conditions, there remains a large number ofaccounting professionals still actively looking for work. As we discussed in ourlast Market Trends Report, there appears to be two classes of job seekers outthere: those looking because they have to and those looking because theywant to.

For those who have to be looking for work, it remains a difficult period, withemployers retaining a fair degree of caution and questioning the reasoningbehind their current circumstances. Many employers may still want to knowreasons behind redundancies, and those without strong explanations behindextended periods of unemployment may face difficulties returning to theworkforce.

With a strong degree of competition existing in the marketplace, particularlyamongst the $65-$100k space, where candidates with only a few years of postqualified experience havent created enough marketability in their profile, theneed for a well devised employment strategy is critical. Knowing yourweaknesses, marketing your strengths and providing employers with acompelling personal case could make all the difference in your job search.

In relation to those who want to be looking for work, we are beginning to seewhat could be some changes in the passive recruitment market. Previously riskaverse job seekers are finally growing comfortable with entering the job marketand are likely to experience counter offers or numerous offers once momentumreturns.

Aspirational FluidityOver the last twelve months employers have enjoyed a relative position ofstrength in the ongoing battle to retain talent. With market conditionsgenerally poor, and a fair degree of insecurity about the economy itself, manyemployees have decided it would be wiser to remain safe in their current rolesthan it would be test their employment prospects on the open market.

That may be about to change.

With generally improving conditions and growing confidence about thedirection of the economy, many employees are beginning to once again gaugethe market for job opportunities. The aspirational fluidity that traditionallydrives a significant portion of the recruitment market has disappeared in thesecurrent market conditions, but over the last few months we have noticed asignificant increase in the amount of passive job seekers a clear sign ofgrowing confidence in the employment market.

Lowered Salary Levels = Increase Risk of FlightSimilarly, with confidence in the market growing, we are receiving a lot ofanecdotal evidence that widespread dissatisfaction with current salary levels

may not be too far around the corner.


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During the height of the financial crisis, a number of employers experiencedgrowing confidence that they would be able to get their chosen candidate atthe right price. With job security at a premium, candidates were happy to takesignificant reductions in salary declines of 10% would have been experiencedpretty much across the board, but in certain market segments we have seencandidates taking salary decreases as high as 30%.

Whilst employers have reaped the rewards of this situation, there is a real riskin many quarters that employees will proactively look to improve their financialsituation either internally or externally. Some employers are taking steps nowto ensure they dont have to look too hard.

Bonuses, STIs and LTIsThe drive by many organisations to rein in costs in recent months has seensome constrictive limitations placed on bonus payments to employees, butthere have also been some opportunities to maximize value for those whoreceived a component of their bonus in share based incentives. The loweredvalue of share prices across the board, along with the expected share pricebounce back (much of which we have already seen) has made shares given tostaff during the last year particularly valuable. Staff who were lucky enough tobe awarded shares at deflated prices throughout the year are in many casesalready reaping the rewards.

One area that has been a hot topic of debate in recent times has been thereworking of Long Term Incentive programs for Executive teams. In manycompanies we have seen employers seeking to more effectively structure theirLTI schemes, so that the rewards not only reflect appreciation for the previousyears performance, but also serve as a retention mechanism in the upcomingbusiness year. By tying bonus payments to continued service within a company,

employers are able to decrease the risk of flight for key personnel.

An Attractive Employment DestinationThe relative strength of the Australian economy, combined with an impressivelyrobust Aussie dollar has combined to make Australia an attractive employmentdestination for overseas travellers.

As for Australians looking to return home, we have seen a steady increase inthe number of returnees over the last twelve months, however not the quitethe stampede that many commentators predicted. The decline in internationalconditions seemed to encourage some expats to return, however the strong

Aussie dollar seemed to hold the masses back, as they waited either forinternational conditions to pick up, or to get more bang for their buck whensending their money home.

In addition to that, the aforementioned economic stability and strong Aussiedollar (not to mention some pretty significant environmental and lifestylefactors) continue to make Australia an attractive destination for young, skilled,newly qualified accountants particularly from the UK.

With many companies turning toward the contracting market to cover existingshortfalls in their staffing levels, opportunities for overseas accountants in thisspace look set to continue over the next six months.


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Future TrendsThe Oncoming Challenge of RetentionWith the prospect of increased activity in the Accounting market, and apossible return to the war for talent that ensued prior to the onset of theglobal financial crisis, many companies are starting to move away from damagecontrol and into planning for potential growth. Key amongst this agenda isidentification and retention of key employees whether that is for thepurposes of ongoing business efficiency, or to develop a workable successionplan for the future.

Accordingly, staff retention promises to be a key challenge for businessesduring the coming year. Savvy companies are already taking steps to ensurethat their best talent is retained within the business unit, dealing proactivelywith staff dissatisfaction issues in an attempt to ensure that the current trickle

of employees seeking new positions does not turn into a flood.

The Need to Refresh the Employer BrandWhilst some organisations are less concerned about their employment brand inthis candidate rich market, they face the real danger of tarnishing their brandnow through poor recruitment practice, which will inhibit their ability toattract talent when the market recovers.

We are experiencing adverse feedback from many candidates that they are notbeing managed very well through the recruitment process by companies eitherthrough on site career portals or overworked line or human resource managers.

It is in this area that the benefits of working with a trusted adviser, like aprofessional recruitment agency begin to emerge. Strong lines ofcommunication between HR professionals, proactive recruitment agents andthe candidates themselves can do much to minimise the damage caused to anemployer brand through what can be sometimes necessarily difficultrecruitment processes.

Speed Will KillDuring periods of economic difficulty, companies tend to adopt a more

conservative approach toward their recruitment processes. More time is spentweighing the genuine need for new staff. More people become involved in thesign off process. More time is spent analysing a candidates suitability, andcomparing that suitability with a large number of other potential employees.Accordingly, more time is taken to hire new staff, and the recruitment cyclebecomes that much slower. Assignments that used to be done in one to twoweeks can now take four to six weeks, as employers become more hesitant intheir hiring decisions.

Already we are seeing examples of companies who have been unable to adjustthe speed of their recruitment processes being outmanoeuvred by competitorswho have adapted more quickly to the changing market conditions. As thedemand for accountants begins to increase, the need for recruitment processes

to be flexible and efficient will also become important.


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Sydney

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Sydney, NSW 2000

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Sydney, NSW 2000Tel (02) 8296 5300

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