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Audit and risk professionals to score top earnings in 2010

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13th Jan 2010
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Salaries in the accounting and finance sector will rise steadily this year, with audit, risk and financial control leading the charge of top earners.

Given last year’s economic turmoil you’d be forgiven for thinking that earnings in the accounting and financial services sector were headed for a dip in 2010, but this isn’t the case according to the Recruitment & Employment Confederation.

The organisation’s most recent profile of the sector suggested that while patterns of reward and remonetisation were expected to change over the next few years, an increased focus on financial control in 2010 will ensure that accountants’ earnings continue to rise steadily.

Trainee accountants typically take home around £20,000 p.a. or more at some larger firms, and once qualified can earn up to £35,000 in the UK regions and £40,000 in London, said the REC. Leading players below partner level typically receive in the region of £100,000.

Bill Haynes, chair of REC’s accounting and financial services group, pinpoints audit, risk and financial control as the three key areas where salaries are likely to increase this year.

“Whether it’s in the public or private sector, financial acumen will be at a premium”, advises Haynes – but it won’t just be your qualifications that increase your earnings potential. “It’ll be the people who display a high level of emotional intelligence and commercial awareness [who will earn the most]”.

Finance function takes centre stage

Pressure among public sector organisations to cut costs this year could impact the earnings of accounting and finance professionals – but which way it will go is anyone’s guess.

David Fleming, associate director of financial recruitment experts Badenoch & Clark told AccountingWEB: "It's difficult to say exactly what this year will bring for accountants. The only thing that seems crystal clear at the moment is that there will be an overhaul of public spending, which will impact jobs in the public sector. This means that organisations will either need more accountants to look at where money is being spent and how cost savings can be delivered, or they might suggest that it's not a frontline service and cut back on accountancy jobs. At this moment in time it's impossible to say which way it will go”.

Haynes is more optimistic about the earning prospects for finance professionals: “The public sector faces some tough choices this year. To continue to provide those front line services, the deployment of the remaining resource has got to be smartly achieved. There’s going to have to be some very strong financial control. Personally I wouldn’t advocate recruiting an army of accountants per se, but I think they need to very clearly ensure that they have a strong and capable finance resource, so my guess is that public sector finance roles will grow”.

Regional variations
While London will continue to be the home of the country’s top earners, the next few years could see increased demand for financial acumen in regional financial centres which may push up earnings outside of London as a result.

“While the City of London has been the centre of UK financial services and accountancy profession and remains so, there are also substantial financial centres in Manchester, Leeds, Bristol, Edinburgh, Glasgow and Cardiff. Each has its own character and employment profile, with a high level of call centre activity in and around Cardiff and Bristol compared to more investment and pensions work in Scotland”, says the REC.

“There’s lots of potential for growth outside London in both the public and private sector. This could have a big impact on the local accountancy and financial control jobs market”, says Haynes.

It is estimated that nearly half the profits of the sector are generated outside London and a large proportion of the workforce is employed outside the South East, with 8% of jobs in the sector based in Scotland.

Bonuses are here to stay
Despite widespread criticism of bonuses in the financial services sector last year, top accounting and finance professionals will continue to receive financial rewards, says the REC. “The maintenance of healthy bonuses will still be an important part of performance management”, says Haynes. “I can’t see bonuses disappearing, but there’s likely to be some fairly creative restructuring of remuneration systems. The basic dynamic that superior performance drives a superior reward will underpin all elements of financial services”.

“Over the next few years the patterns of reward and remonetisation are expected to change, driven in part by the FSA which has produced a draft Code of Practice for remuneration within the firms it regulates”, said the REC’s report.

“The main principle running through the code is that firms must ensure that their remuneration policies are consistent with effective risk management. In practice this means that any performance related payments should reflect the long term impact on the customer’s financial position, not the short term benefits for the employing firm”.

 

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