2020 MELBOURNE ACCOUNTING MARKET - Thompson Cook
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2020 MELBOURNE ACCOUNTING MARKET COVID-19 Impact: COVID-19 has impacted finance functions across Melbourne since February 2020. We have updated below our Melbourne Accounting Market commentary from the start of 2020 with specific updates on how COVID-19 has influenced Melbourne accounting functions. A key observation has been the delineation between companies impacted negatively by COVID-19 and those who have had no impact or in fact benefitted from COVID-19. Never before have we observed such an unusual balance between different industry segments.
NATIONAL JOB MARKET -1%
WE HAVE INCLUDED BELOW TWO -3%
KEY EMPLOYMENT GRAPHS: -8%
-13%
• The SEEK Job Ad Index for Accounting Jobs
which shows by State job ad volumes versus
last year
-6%
• Clearly the major States of NSW and VIC are Source:
showing declines in job ad volume with the Seek Employment Index Jan 2020
other States being mixed
• The ANZ Job Ads Index which shows historical It is interesting to reflect on the objective jobs data
job ad volumes over many years in these two graphs and the conclusions that can
be drawn for the Melbourne accounting market. The
• It can be seen that Nationally across Australia
graphs clearly suggest the Melbourne accounting
job ads are trending down suggesting the jobs
market should be a flat market with less jobs available.
market will be challenging in 2020
However, sentiment amongst companies is that it is
very hard to find quality accounting talent and many
good jobs are available.
260
240
Seasonally adjusted
Number of job ads per week, 000s
Trend
220
200
180
160
140
120
100
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Source: ABS, SEEK, Dept of Employment, Skills, Small and Family Business, ANZ Research
2020 melbourne accounting marketCOVID-19 Impact:
• Below are the graphs updated for August 2020.
• Across Australia accounting job ads have declined
by 53%. The impact on Victoria has been severe
at 57%. For Melbourne, the volume of jobs -47%
available for finance professionals is now very
low and at a level that is worse than the Global -42%
Financial Crisis in 2008. -28%
• Across Australia the job ads trend shows a very
steep decline in April and May with a rebound in -56%
July and August 2020. The steep decline and V
shaped recovery provides a level of comfort that
jobs will recover in the 2H of 2020 into 1H 2021.
-57%
• The challenge for employers is that many good Source:
quality finance professionals are currently in Seek Employment Index Aug 2020
permanent positions and are unwilling to look at
a new job until 1H 2021.
360
320
Average number of job ads per month, 000s
Seasonally adjusted
280
240
200
160
120
80
40
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Source: SEEK; Dept of Employment, Skills and Employment; ANZ Research
2020 melbourne accounting marketTHE JOBS MARKET CAN BE SEGMENTED aS FOLLOWS, USING A TYPICAL
COMPANY WITH 100 STAFF:
• Boom market: 40 recruitment requirements: If a COVID-19 Impact: In simple terms, companies in
company has 100 staff, they will grow to 120 staff Melbourne can be divided into:
via 20 new hires and they are likely to lose 20 of • Companies that are severely impacted by
their existing staff, creating 20 replacement hires. COVID-19. For these companies the effect is to
• Positive market: 10 recruitment requirements: If a create a “declining” jobs market whereby many
company has 100 staff, they will grow to 105 staff roles are not being replaced should someone
via 5 new hires and they are likely to lose 5 of move on from the business.
their existing staff, creating 5 replacement hires. • Companies that are not impacted by COVID-19.
• Flat market: 5 recruitment requirements: If a For these companies it is a “flat” market whereby
company has 100 staff, they are likely to lose 5 any accounting staff that leave are replaced.
staff, creating 5 replacement hires.
• Declining market: 2 recruitment requirements:
If a company has 100 staff they are likely to lose
5 staff but only replace 2 of them, creating 2
replacement hires.
2020 melbourne accounting market• Support market
STRUCTURE OF
ACCOUNTING FUNCTIONS
CENTRALISED OR DECENTRALISED
ACCOUNTING FUNCTIONS: “DELAYERING”:
In some of Australia’s largest companies there is In the last two years we have forecasted a
an emerging trend to now decentralise accounting significant slowdown in companies using
functions back out to the divisions rather than having “Delayering” as a cost cutting opportunity.
a large, centralised shared services team. This trend This occurred as companies are now
continued to gain momentum in 2019 and we expect understanding that there is a limit to just how
this to continue in 2020. The expectation is that a much work can be pushed down through
decentralised accounting team will be closer to the delayering without there being a compromise
business and provide far better commercial insight. in quality. In 2020, we will see more
This is concurrent with the trend of companies companies focused on the quality of output
investing more in Financial Planning & Analysis rather than the cost of the finance team.
positions.
COVID-19 Impact:
COVID-19 Impact: • To date we have not observed companies
• COVID-19 and the creation of the ability to work using COVID-19 as an opportunity to
remotely may play a key role in shaping the “delayer” positions. The feedback from
centralized versus decentralized accounting employers has been that COVID-19 has
function debate. The value of a centralized created an additional volume of work for
function includes the idea that accountants in finance functions to complete, therefore
a centralized group head office function are this is not the time to be pushing further
better placed for stakeholder management and work down to less experienced finance
ideas sharing through working in close physical professionals.
proximity. This notion may well be dispelled with
Delayering occurs when companies use a
the current remote working arrangements of
many companies. resignation as an opportunity to replace a
position at a lower salary band. For example,
• While working from home for many accountants the resignation of a Finance Manager at
has created certain efficiencies, the impact on $180k can be replaced by a Finance Manager
finance professionals in business partnering at $140k with the work effectively pushed
positions or executive roles has been material. down to a more junior employee. The driver
For many, it has been challenging to influence and behind this strategy is cost savings.
support their operational stakeholders from home
as well as they were prior to COVID-19.
2020 melbourne accounting marketEMPLOYER CHALLENGES:
Given that many accounting teams have been through
multiple cycles of process improvement and cost
cutting, most accounting functions are efficient and
lean. Accordingly, when an individual resigns, many
companies look to employ a person who has the
skill set to complete the position immediately rather
than employing a person who will grow into the
role. The challenge for a candidate is that they may
well find themselves making a lateral career move
– completing the same role at a different company
without any career development or growth.
This issue remained prevalent in 2019, however
with the demand for accounting staff being high,
many candidates are able to choose between roles.
Accordingly, in 2020 more companies will be open to
hiring someone who will grow into a role.
COVID-19 Impact:
• A key impact to employers since COVID-19 has
been the shift to induct new employees remotely.
For the most part, companies have adjusted their
processes well and we are still seeing effective
induction processes. The most challenging
SPECIALIST FUNCTIONS
segment of the market for new hires during
COVID-19 is often senior executives, who now TAX | TREASURY | CORPORATE
•
need to build c-suite relationships from home.
We have observed a very strong trend from
DEVELOPMENT | RISK
companies since COVID-19 began in March 2020 The accounting functions of Tax, Treasury,
to hire new finance professionals who are able Corporate Development and Risk are all
to hit the ground running immediately, there is becoming increasingly focused and smaller in
little appetite currently for companies to employ size. In some companies the functions have
new finance professionals who will grow into been outsourced entirely to PwC, Deloitte, EY,
a role. Companies are simply too busy to be KPMG and other specialist consulting firms. For
focused on training people to perform a position example, Tax functions are almost half the size of
competently. what they were 10 years ago in many companies,
In the last two years we observed the best companies excluding the banks and large mining companies.
were able to accelerate a recruitment process for a We expect this trend to continue in 2020.
standout person whom they wanted to secure for The specialist function of Risk will experience
their business. For example, a typical recruitment the most growth in 2020 due to the Banking
process may take 10 business days from first interview Royal Commission which has influenced many
to offer, however a nimble company would accelerate large ASX companies to refocus on their Risk
this into a 4-day turnaround for the right individual. management functions.
This will continue in 2020 with some companies COVID-19 Impact:
using this accelerated model as a deliberate strategy
• Since the COVID-19 outbreak, cyber security
to gain an advantage if required in the so called
has been a focus for most large consumer
“demand for talent”.
centric companies. Apart from the increase in
COVID-19 Impact: demand for cyber risk professionals there has
• Companies have quickly adapted their recruitment been very little increase in the demand for
processes to hire new finance professionals and risk and audit professionals - most internal
on-board them remotely. There has been no delay audit/risk functions have remained constant
in the typical recruitment process. in terms of size.
2020 melbourne accounting marketTHE DYNAMICS OF JOB SEARCHING
JOB VOLUMES:
Typically, for every 1 position at $300k there is 1 LinkedIn remains an excellent tool for company
position at $180k, 2 positions at $120k, 3 positions at research and people research.
$100k, 5 positions at $80k and 3 positions at $65k.
Press advertising has almost ceased for accounting
This remains unchanged in 2020.
positions as companies have found it to be
COVID-19 Impact: prohibitively expensive and a poor sourcing channel
• For the moment, the huge decrease in job for accountants relative to Seek, Linkedin and Indeed.
volumes means the typical job ratios based on
Headhunting remains an effective tool for many
salary level no longer apply. The two segments
companies. Interestingly, headhunting now occurs
of the market hit hardest by COVID-19 are the
for all levels of roles, not just senior level professional
$300k+ segment and the sub $80k segment.
positions. At ThompsonCook, we have a view that
almost everyone will consider a good opportunity
JOB SEARCHING: that will grow their career.
Seek is the dominant advertising channel for all jobs –
however Linkedin is gaining traction and is perceived “OFF MARKET CANDIDATES”:
to have better quality jobs advertised directly by
employers. With improvements in technology and social media,
some of the better quality candidates can almost sit
We have also observed that Indeed is gaining traction back and wait for jobs to be presented to them rather
as a new place to search for jobs given they host jobs than actively engaging in the job search process.
that are not on Seek. This trend will continue in 2020.
Historically, the typical interview ratio on Seek is COVID-19 Impact:
1:30, only 1 person in 30 applications is interviewed. • This remains the case during COVID-19, however
In the last two years this has increased to 1:45 – it is more difficult to convince people in
why? Because it has become harder and harder to permanent employment to entertain a job change
find good quality accountants in Melbourne and we during COVID-19.
expect this trend to continue in 2020.
COVID-19 Impact:
• Interestingly job application volumes have
decreased, this is driven by people in permanent
positions not having the confidence to look for a
new position during COVID-19.
2020 melbourne accounting marketTHE COST OF RECRUITMENT FOR EMPLOYERS
PREFERRED SUPPLIER AGREEMENTS:
Most mid to large sized companies will have some In 2020 as the demand for accountants continues to
form of preferred supplier agreement. grow, preferred supplier agreements are becoming
less relevant as line managers just want access to the
Typical market fee rates are 16% below $200k and
best available accountants.
18% above 200k+. The large banks and government
PSA’s are typically 3%-5% below these rates. Broadly, COVID-19 Impact:
most PSA’s have a lot of leakage. Over the past 5 • There has been no change to the cost of
years, the trend has been away from recruitment recruitment for employers.
suppliers presenting and pitching for a PSA, rather
companies apply a procurement model of issuing
standard terms and conditions for all suppliers at
fixed fee rates.
Focused on Melbourne. EXPERTISE
Experts in accounting recruitment, salary CHALLENGE
OPPORTUNITY
benchmarking and career planning. FOCUSED ON Melbourne
We are here to assist organisations to create great finance functions. Our goal EXPERTS IN Accounting Recruitment
Salary Benchmarking
is to help clients and candidates navigate an increasingly competitive and Career Planning
challenging accounting talent market. Our team is astutely aware of the trends
that have shaped accounting functions for almost two decades. We appreciate WE ARE A team of 15 experts
and understand the multiple roles and complex deliverables of finance functions.
WE ONLY DO Accounting
At ThompsonCook, discover better ways to gain recruitment advice and career
planning insight.
Our clients want to deal with a different type of firm that is flexible, realistic and
consistent when responding to needs. Our candidates want insight, support and
transparency on how to maximise their careers.
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