2024 UK salary and recruitment outlook: Talent war driving pay hike
Although economic growth in the UK is expected to remain stifled this year, and the labour market forecast generally is for vacancies to fall and unemployment to rise, the accountancy and finance sector diverges from the broader outlook.
‘Hiring intentions remain high, with 60% of finance employers planning to recruit over the next year – almost no change since 62% last year,’ says Lorraine Twist, director at Hays specialising in accountancy and finance. ‘However, nearly three-quarters anticipate a shortage of suitable applicants, due to factors such as high salary requirements and tough competition from other organisations.’
Twist says nearly half of accountancy professionals plan to change jobs in the year ahead. She adds: ‘High-quality qualified accountants will continue to be in demand, as well as accountants associated with fee-earning positions such as audit, advisory and taxation. Accountants with good data insights, skills and competencies will also prove invaluable.’
Focus on fresh
A trend among employers across the broader labour market, but particularly in accountancy and finance, is a focus on attracting and nurturing young professionals, with retention being boosted by transparent career development and attractive cultures.
‘Employers are clearly finding the benefit of attracting junior talent with strong career growth potential,’ says Hannah Szymanski, director for the finance and accounting market at Robert Half. ‘Promoting entry-level roles with higher pay is one of the tactics to secure top talent. We are also seeing more companies investing in the development of junior employees as a strategic retention tactic, but also to enable early-career workers to take on more responsibilities faster – important in a skills-short market.’
Finance professionals’ pay rose by an average of 5.6% in 2023, which is above the overall average increase of 3.5% across the UK, says Twist. ‘Payroll and treasury roles [both 6.8%] and accountancy support [6.5%] saw the highest pay increases.
‘Specialist areas within accountancy, such as treasury, tax and internal audit, will remain in high demand, and this will lead to predicted increases in salaries. Overall, we believe that there will be an increase in pay across the finance sector in 2024, but not at the same levels as 2023.’
At the more junior end of the salary spectrum, the cost of living crisis is having a greater impact. ‘Employers are therefore beginning to increase these salaries in a bid to support and retain talent,’ Twist says.
Szymanski agrees. ‘Those in the 25th percentile of staff – individuals with little or no prior experience – are reporting higher average increases than any other level of professional, taking home a 5.8% increase on average. For those in the 50th percentile – individuals with an average level of experience – this falls to 4.6%. For those in the 75th percentile – the high-level skilled staff – the figure drops to 2.4%.’ See AB’s ‘Finance professionals in demand’ article for the Robert Half percentile figures for specific roles.
Retention may be a key focus for employers, but it will be hard won in an environment in which many professionals can successfully move on to gain a stronger salary, improved overall package and better career development.
‘The biggest internal challenge employers expect to face in the next 12 months is retaining talent,’ says Lee Owen, director at Hays specialising in accountancy and finance. ‘Offering appealing benefits and incentives is crucial to this. The top factor tempting finance professionals to move jobs is better salary and/or benefits package.’
Flexible working also remains highly sought after in the profession, and will remain a benefits package cornerstone, despite many companies seeking a return to the office. KPMG reported in late 2023 that 63% of CEOs in the UK predict a full return to in-office working by 2026, and that 83% believe financial rewards and promotion opportunities could be linked in future to office attendance.
This may not, however, play out neatly in accounting and finance. Here, the skills shortage means that candidates, particularly since the pandemic, see flexible working as a key element of a benefits package.
‘More than half are working in a hybrid way, while 30% are fully in the workplace and only 14% are entirely remote,’ says Owen. ‘Looking ahead, 53% of professionals would not consider accepting a job in the future that didn’t offer hybrid working, whereas 42% would, illustrating the importance of flexibility for attracting talent in today’s market.’
As for company culture as a retainer and attractor of top talent, 73% of finance employers recognise the importance of fostering an engaging and supportive team culture in order to attract new talent, says Owen.
He adds: ‘Professionals today prefer a blended culture where they engage face to face but also have the flexibility of hybrid working. For instance, anchor days, where the whole team works from the office on a set day of the week, are a great way to drive culture, collaboration and wellbeing.’
The most in-demand technical skills are:
- Financial modelling
- Data analytics
- Digital proficiency
- Cashflow management
The sectors recruiting the most are:
- Fast-moving consumer goods
- Real estate/property
The areas in which staff are hard to find are
- Internal audit
- Financial modeling