Hays Accountancy & Finance - April 2007

The Profession

Hotspots

New South Wales:

Despite the traditional increase in candidate movement over the last quarter, the profession remains short-staffed with the following hotspots of demand expected this quarter:

• Tax specialists within corporate, personal, GST and consulting - this hotspot is not confined to NSW, with the demand for tax specialists occurring internationally. In highest demand are those with three to five years' experience.
• Audit seniors, supervisors and managers - The mid-year audit peak is looming. As workloads quieten before this rush, the movement of auditors with local experience increases as firms recruit permanent staff before new deadlines. Job descriptions are offering variety, with diverse client portfolios available, and some roles are being complemented with business services.
• Corporate finance and transactional services specialists - there is a growing demand for individuals with experience in mergers, acquisitions, transactions, valuations and due diligence within the big four and boutique firms. Previous experience in these areas is essential for management level roles, such as the CA or CPA qualification. Audit backgrounds and commercial experience is welcome for analyst level positions.
• Insolvency - these candidates are highly valued within the current Sydney market, as top-heavy insolvency practices work hard to up-skill, retain and engage the next generation of practitioners.
• Due to seasonal peaks, short-term solutions such as temporary audit contractors to assist with looming deadlines and provide much-needed relief for audit teams will be in demand.

Victoria:

• Corporate finance and advisory - increased M&A activity in the Melbourne market has created new roles in the corporate finance and advisory space in the Big 4, 2nd tier and boutique corporate advisory firms. Candidates with experience in due diligence, valuations, complex financial modelling, capital raising and corporate advisory are in demand. This is across all levels, from senior accountants to directors.
• Auditors - with the busy audit season just around the corner, and a change in auditors in some major companies, an increased focus on recruiting high calibre external audit professionals is evident. The majority of demand is at the audit senior, supervisor and manager levels. Experience with middle market and financial services is where we have seen the greatest demand in Melbourne and this is expected to continue. There is no sign that the high demand for auditors will abate.
• Tax professionals - this is an ongoing area of high demand across firms of all sizes. One of the influencing factors is increased scrutiny from the ATO, which has led to corporates engaging tax consultants to provide specialist advice. A number of candidates have moved into the accounting profession from law firms and the public sector and have become a target market for technical tax specialists.
• Internal audit/risk management professionals - the demand for these specialists to work within accounting firms has increased and is predicted to continue over the next quarter. Greater demand from clients to ensure internal controls are in place and work on specific projects has driven this demand.

ACT:

• Strong demand remains for accountants with two to five years' experience. The 2nd tier and small to medium firms in particular are struggling to source staff at this level, with the Big 4 certainly not exempt.
• We have recently seen an increase in entry-level auditors (graduates with one year experience or those with two to three years international experience) relocating to Canberra.
• Interestingly most firms have secured entry-level graduates or equivalent recently, so the coming quarter is expected to present limited opportunities for those entering the profession with just commercial experience.

South Australia:

• CA's and CPA's with excellent consulting skills and experience within Professional Practice - this is an area of extreme demand, with Big 4 and mid tier experience especially sought.
• Demand is huge in both audit and business services - demand exists due to the ongoing shortage of candidates with Australian professional practice experience and the unwillingness of firms to employ overseas candidates who lack knowledge of our tax system.

Western Australia:

• Accountants with three to five years experience across all industry sectors, with the exception of insolvency.
• Tax consulting - this remains a hot market, with senior and manager level skills in particular demand.
• Business services - this area remains desperately short of candidates, particularly at the intermediate and senior levels. Even the best practices with outstanding cultures and environments find themselves desperate for staff at this level. This will remain the case over the coming quarter, as there is an enormous volume of unfilled roles.
• Corporate finance seniors - these candidates are in very strong demand given the high transactional activity in the WA market.

Queensland:

Demand for candidates exists across Queensland for staff at every level of the profession, particularly business services managers and external audit seniors. All firms from Big 4 through to partnerships have immediate needs due to high workloads. A large focus over the coming quarter will be for audit professionals in preparation of the coming busy season and some firms are looking overseas for these needs, particularly the UK and South Africa.

The coming quarter

The next three to six months will see a steady increase in recruitment activity, with the Sydney market in particular growing and trying to retain talent in all areas. Competition for staff is not only between firms; it also exists between commerce and the profession, between international markets and Australia and between firms in the CBD and the suburbs.

The candidate shortage within professional practice, and many other specialist markets, is set to continue for the foreseeable future. The focus for the remainder of 2007 and heading into 2008 will be on candidate attraction and retention. Employers are trying to change the perception of the profession - we all know it's an exciting environment to work in and this needs to be emphasised in order to overcome the stereotypes surrounding accounting firms. In doing so, the profession will attract more candidates with the right standards of professionalism and character, from which it can then collectively shape and form the necessary skills in this workforce.

While contract accountants are never an enormous requirement in the profession due to the fundamental client contact aspect, as the tax season approaches firms may find themselves considering this option.

In South Australia demand is centred on permanent staff for client interaction roles since the building of lasting client relationships is a major critical success factor for practices.

In Western Australia the focus over the April to June quarter will be on recruiting auditors for the coming busy season. Timing can make a huge difference to an auditor's successful move. Often auditors apply for roles after the busy season but this is the worst time to apply as few firms are recruiting. Candidates that apply in April and May, before or during the planning for the busy season, will find themselves in far greater demand.

Western Australia's activity was frantic in January and February with multiple offers normal. Despite an increase in job seekers, the backlog of positions and the continued economic growth has ensured the vacancy rate remains high. The increased movement is resulting in a 'musical chair' effect as firms promote staff and refill at the junior end to compensate for departing staff.

Overall, vacancy rates will remain high in the coming quarter across the board, from boutique, medium, suburban, CBD, 2nd tier and Big 4 firms. We also expect to see increased demand for management consultants by the Big 4, who are expected to more formally rebuild their consulting divisions.

Executive recruitment

Executive recruitment activity within the profession has become more noticeable and attractive to senior candidates, particularly in Sydney. Positions available to qualified and experienced staff are more enticing, diverse and attainable. For example, business services managers are being offered opportunities to actively shape the future of their firms and play a part in the marketing and selling of its services, as well as dynamic involvement in business development. Partnership opportunities are the drawing card, especially as the average age of partners declines with some candidates reaching their goals by their early thirties. The recruitment of senior management individuals to shape new departments and kick-start a business unit is increasing, with some candidates having no Australian experience.

In Melbourne the demand for principals and partners has been fuelled largely from succession planning and expansion preparation. The continued overall candidate short market and the widely held perception that many senior partners will near retirement around the same time has led many firms to consider succession planning earlier than previous years. Many firms are also planning expansions and are focusing on attracting talent in the business development area, rather than looking for candidates that can manage existing business.

ACT has experienced limited opportunities for senior managers and partners, however candidate availability is high, with professionals relocating from interstate or regional NSW.

The trend for larger firms in Brisbane to buy out smaller firms has brought about the absorption of partners, directors and associates. Due to the strong culture of training and development within this sector, senior staff are often promoted internally and vacancy activity at this level is consequently minimal.

West Australian partners and potential equity partners are increasingly mobile and there has been a rise in candidates returning or relocating to Perth. This is due to the positive market in addition to baby-boomers commencing their succession planning or retiring. Opportunities are across all disciplines with the exception of insolvency.

Salaries

Continued salary pressure is expected, particularly across all areas experiencing candidate shortages. With competition for staff increasing not only between firms but also between the CBD and the suburbs, salaries are increasing in the suburbs to match, if not better, those of their counterparts located in the city centre.

Pressure is expected to peak at the senior and supervisor levels in audit and business services over the coming quarter, particularly in Melbourne, as firms scramble to find experienced staff in the build up to the traditional busy season. Firms who have been looking for staff for a long period are now more likely to consider stepping outside the standard salary bandings as urgency increases. Quality candidates with strong local experience will be in a position to capitalise on demand as the competition for available talent mounts in the build-up to June. Firms have also been reporting that staff reviews have generally lead to substantial increases across the board since quality staff are in very short supply and some firms will pay outside generally accepted market bandings to attract any staff left disappointed with their reviews.

Salary movements are not as high as previous quarters in Perth, however given previous high increments this is not a surprise. The intermediate to senior level will remain extremely busy and candidates can expect multiple offers, which usually leads to an offer above market rate.

The exception to upward salary movements is Queensland where salaries are expected to stabilise. The profession experienced significant growth during 2006 with salaries rising dramatically. Audit candidates however can expect slightly more than market rate due to the severe shortage of these skills.

Some candidates' reasons for leaving roles or starting new opportunities are shifting away from salary factors, towards the search for positions offering work/life balance, convenience of location or full study support.

Candidates have begun to realise insolvency work means accelerated career opportunities and insolvency salaries are well above those of their peers who have an equal level of experience in another accounting specialisation. It's not uncommon for entry-level insolvency candidates with between 18 months to 3 years experience to see increases in salary of 15 to 30 percent upon moving firms.

Candidate trends

In addition to the ongoing appeal of commercial roles and the movement of candidates overseas to the UK, we are now experiencing a significant amount of candidate movement towards the booming Asian markets. This has produced amplified demand for candidates in the local market with focal disciplines being audit, insolvency, corporate tax and corporate finance. In addition, firms are becoming more creative when trying to retain staff.

An increasing number of candidates from overseas locations are however targeting Australia as a preferred location to live and work, either permanently or for a two to four year period. The expectation is that large firms will offer sponsorship and generous relocation packages to candidates from overseas, however this is not always the case. Despite this, savvy clients are definitely tapping into the overseas candidate pool, with a focus on audit, tax and corporate finance skills.

There remain a high number of Melbourne candidates at the senior accountant/manager level who are moving into commerce and industry. What is interesting however is that we have seen a number of candidates who have tried commercial roles and environments and wish to move back into public practice as their experience was different to the expectation. This is encouraging news for accounting firms, although it remains to be seen whether this trend will continue.