Tag Archive | "salary"

Why are female accountants paid less than their male counterparts?

More than 50% of female accountants believe they are held back because of their gender and this affects their chances of promotion and their salary. Only 12% of men think they are disadvantaged in the same way, according to a recent study by Marks Sattin.

The annual hours and earnings survey from the ONS showed that the average salary for a female accountant was £32,080 last year. However, the average male accountant received at least £6,000 more giving him a salary of £38,500.

Overall average salaries have dropped in the accountancy sector over the last couple of years. In 2010, females received £32,120 and their male counterparts got £41,700.

Men still continue to dominate in the boardroom as well. Women make up less than 14% of the board members in the Big Four firms both at home and in Europe.

Lord Davies recommended that at least one in four board members in FTSE 350 companies should be female by 2015, but it looks like accountancy firms may struggle to achieve that. According to the CBI, just 14.5% of FTSE 100 board positions are held by women at the moment.

Marks Sattin MD, Dave Way, explained that although the accountancy sector recruits an equal number of male and female graduates, very few females rise to the top.

Females feel disenfranchised from the highest positions and they need to actively promote themselves for senior roles and not let historical precedent determine the make up of future boardrooms.

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Resigning accountants receive huge counter-offers

Contractor accountants may be interested to hear that the results of Robert Walters’ annual survey into accountants pay showed that those who did get a bonus this year, received increases in excess of 10%.

Marks Sattin, a leading accountancy recruiter, said a lot of companies are worried about losing key employees and are making counter offers to those who are considering resigning. In some cases they are offered up to 20% more than their current salary.

Accountants are obviously highly valued in the UK and 50% of them receive a counter offer when they hand in their resignation.

Companies in the banking, energy, FMCG and media sectors are all struggling to find qualified, experienced accountants and are leading the counter offer trend. Retail and investment banks are offering the largest salary increases in a bid to retain their key talent, according to Marks Sattin’s MD, Dave Way. Nearly 70% of employees have received salary increases to entice them to remain loyal to their current employer, he said. This trend is also increasing in Amsterdam, Dubai, Paris and Zurich. Way concluded by saying 2011 is the year of the counter-offer.

A report by CIPD/KPMG this summer found that a lot of employers are having difficulties finding staff and this was especially true when it came to filling accountancy roles. PWC, for example, grew by 6% this year and has been running a big recruitment drive to hire 3,200 new employees.

Young jobseekers may want to bear this in mind when they think about their future career options. It is not essential to undertake a degree course to become an accountant. There are various routes into the profession, including in-house courses and distance learning.

The UK urgently needs more young people to enter the accountancy profession otherwise we could end up with a massive skills shortage.

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Should contractor accountants be prepared for a decade of low salary increases?

Employees, including contractor accountants, should be prepared to see their salaries increase at a much slower rate over the next decade than they did in the noughties, according to the CIPD’s chief economic adviser, John Philpott.

ONS data shows that the average annual earnings for a full-time employee in April last year was £25,879. This represented a 37% increase on 2000’s figure, or if you take CPI inflation into account, a real terms increase of 16%.

Mr Philpott explained that we saw strong economic growth throughout much of the 2000s. Inflation and unemployment were low and this enabled earnings to improve. However, those conditions are unlikely to reappear until at least 2015 and in the meantime employees could feel frustrated by their pay packets.

Philpott predicts that the first half of this decade will see the tougher conditions we have experienced since the onset of the credit crisis continue to bite. Rising unemployment puts downward pressure on pay settlements and average earnings are unlikely to rise above about 2% a year.

If this situation persisted until 2020, average salaries would rise to just £30,000 and inflation would cancel out the increase. But Philpott said that is a worst case scenario and he hopes to see growth picking up during the second half of the decade. If that happens, average earnings growth for the decade should be around 3%, meaning a median salary of £34,000 in 2020.

Earnings capacity will be influenced by a number of factors, including skills and experience, and employers will pay a premium for people with skills that are in high demand.

Meanwhile, the Department for Business, Innovation and Skills has launched a consultation into proposals to make it easier for investors to understand company reporting and to encourage more detailed data to be published about the pay rates of executives.

The consultation will also consider whether companies should follow the guidance of the Women on Boards report and publish data showing how many women are board members.

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Are top contractor accountants getting salary increases above rate of inflation?

The issue of executive pay and bonuses could be back in the spotlight following a report from Deloitte which shows that many executive directors are receiving above average salary increases.

The Executive Directors’ Remuneration report shows that main directors on the board of FTSE 100 companies received salary increases of between 2.5% and 7.5% this year. The average was 4%. In FTSE 250 companies, the increases ranged between 0.5% and 5%, with a 3% average.

Stephen Cahill, a partner of the Deloitte remuneration team, said he was surprised to see that a number of salary increases were more than 5%; significantly above the rate of inflation and the average increase in employees’ wages. Remuneration committees should only consider increasing executive’s salaries if there is a compelling reason to do so and the increases should be in line with those awarded to other employees.

There has also been a substantial increase in bonus payments this year. In FTSE 100 companies, bonuses ranged from 71% of the maximum to 87%, whilst in FTSE 250 firms the range was from 54% to 86%.

Cahill said that some hard thinking needs to be employed over annual bonus plans and targets and expectations should be recalibrated so that bonuses are not as good as guaranteed.

However, on a positive note, the survey did find that more than 66% of FTSE 100 organisations and 50% of companies in the FTSE 250 are now deferring at least part of the bonus. Furthermore, about 50% of companies have introduced clawback provisions.

Executive salary increases should be the same as general employees and if they are above the market median at present, remuneration committees should think about freezing them to show restraint while the UK is still going through a period of economic difficulty, Cahill added.

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Contractor accountants of the future optimistic about their prospects

Accountancy students, the online accountants of the future, are feeling confident about their future employment prospects despite the constrained jobs market and tough economic climate, according to a study carried out by CIMA.

The Institute found that more than 90% of CIMA students are confident that their job is secure, at least for the remainder of 2011. Furthermore, 60% are optimistic enough to think about changing jobs within the next couple of years.

CIMA accountants expect their salary to rise by 6% over the next two years, despite wage inflation in the UK currently just 2%. The majority of students who responded to the survey think we’ve seen the worst of the cutbacks and 27% believe hiring will increase this year.

David Rowsby, CIMA’s regional director for Europe, said finance students are confident that they have strong qualifications which have a unique focus on business. With economic uncertainty continuing in many parts of the world, students think a professional accountancy qualification from CIMA is the best way to forge a career in the global environment, he added.

The survey also found that 57% of accountants in the UK are happy with their salary, but more than 50% of respondents expect to receive an increase within the next 12 months.

The high level of confidence in job security amongst accountancy students may well be justified as demand for qualified finance professionals soared last month.

According to the Reed Job Index, demand for qualified accountants registered 134 last month, compared to 127 the previous month. However, in real terms, salaries have dropped since December 2009 registering 98 – 2 points under the 100 point baseline.

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Demand for contractor accountants outstrips rest of market

The latest Job Index from Reed showed an increase in opportunities for newly qualified accountants last month.

Although there was little movement in the rest of the jobs market, there was a 5% increase in new accountancy jobs in August. According to Reed, the past year has seen an increase of 22% in demand for qualified accountants, and an increase of 34% since the Index came into being in December 2009.

Despite the increase in opportunities, salaries for new qualified accountants remained unchanged in August. Compared to the recruitment market as a whole, this is still an improvement as the Salary Index sank to 97, 3% below the benchmark set when the Index started.

The non-qualified Accountancy Index is also outstripping national figures at 28% higher than it was this time last year.

Martin Warnes, Reed.co.uk’s MD, said it was really striking to note the increase in demand for qualified accountants last month when all other areas of the economy remained flat.

The service sector in particular is suffering at the moment. The latest Markit/CIPS services purchasing managers index fell from 54.4 to 51.1 in August. This was the largest drop in ten years as economic uncertainty in the Eurozone continues to harm the FTSE and consumer confidence is eroded by rising inflation and constrained incomes.

Nick Jones from World First currency brokers said that a fall had been expected but the extent of the decline was a real shocker. The services industry is still slightly growing, he continued, but any more shocks to consumer confidence could see the sector contract and threaten the third quarter’s GDP.

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Does the gender pay gap really exist?

Maureen Blenkharn from leading Scottish recruiter McAdam King said surveys which claim that discrepancies exist between male and female executives’ pay do not help the cause of women.

One such survey suggested that the gender pay gap could be as high as £10,000 per year but Ms Blenkharn warned that those sort of comparisons did not paint an accurate picture of working practices in recruitment.

She said that in her experience employers just want to find the right candidate and offer the same package to both men and women. She went on to say that McAdam King works with major financial services, manufacturing and oil and gas firms and it’s not possible to imagine a situation where companies would take a different approach to salary negotiations because of gender.

The CMI recently published research claiming that it will take 100 years before women executives receive the same pay as men.

Kay Senior from Badenoch & Clark said that if this is true it is very disappointing and must be addressed. She also claimed that men were proactive when it comes to pay and women should adopt the same attitude. Almost 75% of women do not know the market rate for their position, she said whereas 34.5% of men knew exactly what they should receive and were prepared to make sure their employer was aware of it.

She finished by saying that organisations must address the gender pay gap but it was just as important for employees to understand the industry standard for their job and communicate regularly with their employer about their salary.

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Would contractor accountants swap part of their pay for more holidays?

Nearly 32% of British workers would sacrifice part of their salary in order to get more holidays, according to a poll by Hyphen.

The multi-sector recruiter surveyed more than 1,000 employees and discovered that 56.3% of HR professionals would contemplate swapping part of their base salary for additional holiday entitlement. In the 16 to 24 age bracket, 41.3% were prepared to sacrifice pay for more holidays, as were 42.6% of finance professionals and accountants for contractors.

Another survey, this time by Reabur, found that 51% would be prepared to lose a day’s salary in order to enjoy a longer weekend.

The HR consultant found that another 14% would sacrifice half a day’s pay so that they could have Friday afternoon off and 4% would lose the half day’s salary for Monday morning off. 6% of respondents went as far as to say they would be willing to lose two day’s pay every week if they could have a four day weekend on a permanent basis.

However, 14% of cost conscious respondents would be happy to see a longer weekend implemented in the UK as long as they did not lose any of their salary. Only 9% of people appear to be happy with the five day working week and another 2% said they were impartial.

Reabur’s co-managing director, Georgina Read, pointed out that a lot of companies for finish early on Fridays but it was unlikely that a late start on Monday would be seen as a viable alternative as employers expect staff to be energised after the weekend break.

She went on say that people who wanted a four day weekend could approach their employer with a flexible working request, but before doing so they should consider the impact that request would have on the business.

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Good contractors are worth every bit of their day rate!

Regular readers will know I have never had a lot of respect for the average agency, thinking that most of them exhibit a degree of professional casualness totally at odds with their advertising. Today, for example, I got another email offering me work as a support technician in the Midlands at a whole £20k a year. Be still my beating heart.

But this week, one of them has managed to surpass even that fairly mediocre level of success.

Someone in Hays thought it a good idea to remind the people contracting through them to RBS to complete their timesheets prior to the bank holiday weekend. So they sent out an email, with, for some reason, an attachment. Followed very quickly – but not quickly enough, needless to say – by a recall of the email.

Why? Because the attachment contained a list of 3000 contractors, their day rate, the day rate to Hays and a few other interesting details. It seems that some of these contractors are on really quite juicy rates. Oops…

OK, so perhaps that’s the rate for a senior HR manager in charge of a multi-million pound restructuring programme, but needless to say the ignorati rapidly jumped on the bandwagon, demonstrating a total lack of knowledge of several fairly key areas.. The meeja started it, shouting about excess salaries for temporary staff. A spokesman from Unite – who, let us not forget, are representing workers and so might be expected to have at least a working understanding of the labour market – started banging on about “overpaid contractors” taking work from “permanent staff”. Assorted comments in a range of newspapers picked up the baton. A shadow Treasury Minister came out with the same line. OK, so he’s a politician of course, so we shoudn’t expect too much wisdom perhaps.

The thing is, to a man they were going on about excessive salaries. Nobody can possibly be worth that much (well they can, actually, work out the cost of employment of a permie on an £80k salary plus bonus and package). And what is more, as ony fule kno these aren’t salaries, they’re payments to companies for services rendered. To convert them into salaries, you have to knock off the long list of expenses that contractors have to cover for themselves – employers NICs, holiday pay, sick pay, pensions, expenses, bench time funding, corporation tax and all the rest. And even then you probably haven’t got to a salary since you don’t know how much the contractor is taking back out of his company.

Or perhaps these deluded souls actually think that the fitter from British Gas charging you £80 an hour to fix your boiler is on £166,000 a year salary? I suppose that’s quite likely, given the state of our education system…

The really sad thing is that we have a unique and highly effective contractor workforce in this country. Its end clients – like RBS – recognise its worth and understand the economic realities that make a contractor a very good use of money. One recent client of mine paid £60k for a contractor’s services over several months, but he left them with a £430,000 saving. Which I, and they, think is actually not a bad return.

Good contractors are worth their day rate. Such a shame that people who probably understand that perfectly well prefer to distort reality in the pursuit of cheap, and very hypocritical, political point scoring.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

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More than eight out of ten accountants wants to jump ship

Accounting firms could find themselves without key members of staff as more than eight out of ten employees, including accountants for contractors, are considering changing job.

Definitive Consulting, a City recruitment specialist, recently surveyed senior executives and discovered that although 65% thought their employer successfully retained staff during the economic crisis, less than 10% said they have been very successful at keeping employees happy and engaged since the recession ended. And only 8% were very confident that their employer would make the correct people decisions whilst the recovery was still ongoing.

As a result of these negative feelings, 82% said that unless they are guaranteed a salary increase and a bonus, they will move to a new employer within 12 months. Out of those, 22% said they were ready to move immediately and 43% said they plan to change jobs within the next six months.

Almost two-thirds of the survey’s respondents said their employer doesn’t appear to be following a clear employee retention plan. Instead they are reacting to circumstances and making high counter-offers to encourage employees to withdraw their resignations.

The report went on to point out that employers seem to have learnt from the 2001 downturn when redundancies led to a skills shortage and high wage inflation. Instead, firms implemented salary and bonus freezes, long term leave and secondments to reduce costs during the economic crisis.

The MD of Definitive consulting, Darren James, said this strategic approach seems not to have extended into the recovery period. Employers need to stabilise the situation as a matter of urgency to stop key employees jumping ship.

Employers may want to bear in mind that the small business community values the advice of accountants highly. 48% of respondents to an unbiased.co.uk survey said that accountants helped them save money, 47% said they helped make sense of the UK’s complex tax system and one in five admitted they were their most valuable source of advice.

More than a quarter of the small business owners questioned said they had more time to focus on running their business if they used an accountant and 10% said they had more free time to spend with family.

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Do accountants for contractors want to cut holiday entitlement?

New research has discovered that a lot of private sector employers, including some contractor accountants, are thinking of reducing holiday entitlement to cut the cost of employee benefits.

Insurance provider Metlife surveyed 403 SMEs and found that 27% think holiday entitlement is too generous and 25% are thinking about reducing paid holiday leave.

Full-time workers in the UK are entitled to 28 days paid holiday per year, including bank holidays. Employers would like to cut 4 days paid leave to reduce costs and 36% say they are thinking about offering staff additional unpaid leave.

Dominic Grinstead, the MD of MetLife, said employers are questioning the value of employee benefits packages and paid holidays form an expensive part of the bundle. A lot of employees show that they are prepared to be flexible, but they do want something in return.

The survey also found that more than 33% of employees would work longer, but only if they received more money. However 60% of employees do not think they will get an annual salary increase in the next year and 28% have not seen their wages rise for more than two years.

Public sector employees are facing a salary freeze and although some private sector wages are increasing, the average 3% settlements are below inflation. 16% of private sector organisations are operating pay freezes, 31% intend to offer increases below RPI inflation and 17% say they will offer targeted salary rises for some of their employees only.

John Cridland, the CBI’s director-general, said he was confident that growth in the private sector will compensate for public sector job losses but inflationary pressures are causing the majority of employers to make tough decisions when it comes to pay.

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Employers must do more to support staff health and wellbeing

63% of accountants for contractors think their employer could do more to support their health and wellbeing, according to a survey from Sovereign Health Care.

Stress is a major problem for accountants, with 55% saying their stress levels have risen in the past year. 68% also blame their job for making them ill.

Russ Piper, the chief executive of Sovereign Health Care, says salary freezes and higher workloads have reduced morale in the workplace. More than 50% of accountants would happily change jobs in order to get better benefits, even if their salary remained unchanged.

Piper went on to say that accounting practices should take heed of the survey results and review their benefits structure to give more support for employee health and wellbeing.

It’s not only accountants that feel neglected either. Another survey, this time by Simply Health, the health insurer, discovered that 43% of employees across the board think their employer neglects their wellbeing at work.

Employees value wellbeing and if they feel their employer does not care, motivation, loyalty and job satisfaction all disappear. Once the job market recovery gets into full swing, uncaring employers could find their talented people disappearing for greener pastures.

75% of employees who think their employer cares greatly for them describe themselves as loyal. This is in stark contrast to the 3% who say they are loyal even though their employer is uncaring.

30% of those with uncaring employers are actively engaged in looking for a new opportunity, whereas only around 2.5% of those with caring employers are doing the same.

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Are any contractor accountants getting pay rises?

26% of employers do not intend to increase salaries this year as sluggish private sector growth and public sector austerity measures impact companies’ capacity to reward their employees.

The latest annual Reward Survey from the CIPD shows that while 99% of employers will not be cutting pay this year, only 65% will actually be increasing it. A further 9% have delayed their review of salaries.

60% of respondents said market rates were the most important factor when it came to determining salary levels and 61% link pay to individual performance, at least in part.

67% of organisations operate reward schemes that are performance-related and the most common options are pay rises based on merit and individual bonuses. 29% also operate non-monetary awards for individual clerical and manual members of staff.

The CIPD’s performance and reward adviser, Charles Cotton, said it’s not surprising that some companies are not able to award salary increases this year. The survey results also show that employers are focusing more on linking pay and bonuses to performance.

Meanwhile, private sector pay edged up by 3% in the first quarter of this year. Inflation is hovering around 4.5% so the rise doesn’t fully compensate but it is an increase which is something public sector workers currently yearn for.

The increase in private sector pay has been led by the automotive and utilities sectors. 3% is still well below the CPI rate and when you factor in the freeze in public sector pay, the average comes out at 2.5%.

Experts are now predicting that the Bank of England will hold the base rate at its historic low of 0.5% until at least November. With inflation rising faster than wages, take-home pay will continue to shrink for a while yet.

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Big firms pay better but SMEs allow creativity say graduates

Accountants for contractors might want to know that UK graduates think they will receive better pay and career progression opportunities if they work for a corporation rather than an SME, according to Give A Grad A Go, an SME graduate recruiter.

Whilst 91% of graduates think salaries are better in corporations, 92% thought SMEs encouraged more creativity and at 62%, they also scored better on work-life balance.

The managing director of Give A Grad A Go, Cary Curtis, said graduates often do not realise that opportunities are available in SMEs and therefore smaller employers can struggle to source the best talent.

Graduates have been having a hard time trying to find a job over the last three years. According to Thames Ditton – SHL, 60% of people who graduated within the last three years have not been able to secure a graduate position. The class of 2010 has suffered most from the lack of graduate opportunities. Only 34% have secured a graduate position.

The survey also found that over 400,000 graduates would not have attended university if the fees were £9,000 per year. Nearly three quarters of the graduates surveyed said they would consider moving overseas to find a job and 36% of them cited better salaries as their main driver.

All the graduates who took part in the Thames Ditton – SHL survey said they would undertake unpaid work in order to get experience and 39% would be prepared to do this for more than three months if it would help them get a job.

Graduates could be losing out by not using social media in their job hunting efforts. Despite its growing popularity, only 39% of graduates would use it to market themselves to potential employers. Only 5% of graduates apply for roles through LinkedIn and yet 34% of recruiters use it to screen candidates.

Sean Howard, the vice president of business solutions at SHL, said he was amazed that graduates were not using social media in their job hunting efforts. He also believes recruiters may need to think again about their hiring criteria if the government doesn’t reconsider university tuition fees.

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