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ACCOUNTANTS IN COMMERCE

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ACCOUNTANTS IN COMMERCE Powered By Docstoc
					2005 SALARY AND EMPLOYMENT
     RESEARCH SERIES




ACCOUNTANTS IN COMMERCE
        WINTER 2005




             -1-
                                     TABLE OF CONTENTS
TABLE OF CONTENTS....................................................................1
INTRODUCTION ...............................................................................2
   ABOUT THE SURVEY ......................................................................................................2
   RESEARCH METHODOLOGY ...........................................................................................3
   PARTICIPANT OVERVIEW................................................................................................3
COMMERCIAL ACCOUNTING SECTOR ........................................4
   OLIVIER INTERNET JOB INDEX ........................................................................................4
SALARY INFORMATION .................................................................6
   SALARY REVIEWS ..........................................................................................................6
   BONUSES AND PROFIT SHARE .......................................................................................7
RECRUITMENT AND RETENTION..................................................8
   SOURCING METHODS ....................................................................................................8
      Recently qualified................................................................................................................9
      Experienced professionals ................................................................................................................ 9
   SELECTION METHODS .................................................................................................10
   IMPORTANT ATTRIBUTES FOR AN ACCOUNTANT IN COMMERCE ......................................11
   TEMPORARY AND CONTRACT STAFF ............................................................................12
   RETENTION STRATEGIES ..............................................................................................13
INTERNET PRACTICES.................................................................15
   WEBSITE USE AND IMPORTANCE ..................................................................................15
REMUNERATION TABLES............................................................16
 TABLE 1 – CLERICAL ROLES ........................................................................................16
 TABLE 2 – SPECIALIST ROLES ......................................................................................17
ABOUT OLIVIER GROUP ............................................................................... 18
                          INTRODUCTION

ABOUT THE SURVEY
The Olivier Group has been conducting salary and employment research in a
wide range of occupations for a number of years. The Olivier Group is proud to
present the Accountants in Commerce report, the second report in the Winter
2005 series of our Salary and Employment Research.


This report intends to inform not only our clients, but also key members in the
commercial accounting arena, about the current employment and remuneration
climate in New South Wales. Additionally, it aims to provide a reference to
which an organisation can compare its own employment environment with the
rest of the industry.


From this year’s survey the key findings were:


• 44% of companies survey expect to increase their staff in 2005
• an average salary rise of 3.9% is expected for companies planning a June
  review
• planned salary increases are driven primarily by inflation


The Olivier Group would like to thank those who participated in the survey and
hope the information contained in this report is beneficial. We welcome your
feedback.
RESEARCH METHODOLOGY
The survey sample was drawn from the commercial accounting clients of Olivier
Group as at March 2005.


The results were analysed using the market knowledge of our commercial
accounting recruitment consultants and the Olivier Directors.


This year we have included unique information on the demand for Accountants
in Commerce from the Olivier Internet Job Index. The index, now in its 5th year,
and widely regarded for its employment trend analysis by sector/occupation,
contains detailed time series analysis in the demand by specialisation within the
accounting profession. This data is published monthly and subscription is free
via www.olivier.com.au




PARTICIPANT OVERVIEW
The gross annual turnover for the sample averaged $328 million, with
companies having an average of 469 employees.


From the survey sample there was an average of 14 employees in each finance
department. 38% of companies surveyed indicated that a growth in their
business size would increase numbers in finance departments in 2005.


In regards to the frequency of salary reviews all of the companies surveyed
indicated they undertake salary reviews annually.
COMMERCIAL ACCOUNTING SECTOR

OLIVIER INTERNET JOB INDEX
The changing employment landscape over the last three years – from a
depressed market post 9/11, to record unemployment and “skills shortages”
marks the most pronounced cyclical change in employment fortunes in living
memory.


As a leading economic indicator of the employment market the Olivier Internet
Job Index has tracked and measured that change. In the last 12 months alone
the Olivier “IJI” has risen 29.74% across all sectors.


Over the same period the number of job advertisements in the Accounting
sector on the major job boards have risen 21.05%. Accounting started from a
high base being a sector hit less hard during the economic downturn than many
others.


The Olivier Internet Job Index is seasonally adjusted by the Australian Bureau
of Statistics allowing more reliable analysis within a year. Over the last 3
months and 6 months the Accounting roles have increased 1.38% and 5.48%
respectively, seasonally adjusted, well below the overall market growth and
indicative of some slowing in demand. Accounting remains the third largest
sector after Trades and Services and Sales and Marketing with IT a distant third
but on the rise.


The Olivier Internet Job Index has a separate measure of graduate jobs. The
Graduate Index has risen a staggering 223% between February 2004 and 2005,
a clear indication that employers are choosing to recruit at less experienced
level and training up. Accounting graduate advertisements have grown a “mere”
83%! Clearly the war for talent amongst 2005 and 2006 graduates will be hotter
than ever with consequent pressure on salaries.
Index – Number of jobs




                         Figure 1: Accounting Sector Graph
                   SALARY INFORMATION

This section addresses the current climate with regard to salary reviews and
performance bonuses scheduled for 2005.


SALARY REVIEWS
Pay increases are forecast to increase by an average of 3.9% in the June 2005
review period. This is a higher increase than the average of 3.3% which was
awarded in 2004.


The reason for awarding increases varies between companies, however, it is
generally driven primarily by inflation with promotion/performance and market
factors being less significant factors.      Figure 2 below illustrates how the
participants in the survey are influenced.




                    Influence on Salary Increase

           80%

           60%

           40%

           20%

            0%
                   Inflationary    Promotion /        Market
                                  Performance

Figure 2: General influences for salary increases




                                       -1-
BONUSES AND PROFIT SHARE
In addition to an employee’s salary, over 86% companies award bonuses or a
share in the profits of the company. Reward is based upon primarily either the
results of company and/or individual performance. The amount to be paid as a
bonus in 2005 ranges from between 10% and 100%.


Figure 3 illustrates the rationale behind the payment of staff bonuses for 2005.
Company performance has become the main factor when deciding to pay
bonuses or not.




                                Bonuses

       60%

       40%

       20%

         0%
                  Individual      Divisional        Company

Figure 3: Influence of bonuses paid to employees in 2005




                                     -18-
            RECRUITMENT AND RETENTION

This year’s survey participants highlighted recruitment and retention of quality
employees as the major issue for the next twelve months. This issue remains in
line with what was predicted in the 2004 survey.


SOURCING METHODS
When employers undertake the task of recruitment there are various sources
from which applicants can be drawn. The number of sourcing methodologies
engaged is related to the level of role being filled. Figure 4 below illustrates the
difference in number of companies using each sourcing method in 2005.




                           Sourcing Methodology
                                                                 Newspapers
      80
                                                                 Recruitment
      60                                                         Consultancies
   % 40                                                          Referral

      20                                                         Own Website
        0
                                                                 Online Job
            Recently Qualified          Managerial               Boards


Figure 4: Sourcing methodologies used by the 2005 survey respondents.
            (Note: Respondents chose more than one option)




                                       -18-
RECENTLY QUALIFIED
With regard to the recruitment of recently qualified accountants the trend
remains to rely on recruitment consultancies to source candidates, with 50% of
the respondents indicating this preference. The trend in 2003-2004 was for
companies to use online job boards and company websites, however, in 2004-
2005 this greatly reduced, possibly as a result of the high volume but low quality
of applicants which the internet tends to produce.



EXPERIENCED PROFESSIONALS
The recruitment of experienced professionals shows less distinction between
the different sourcing methodologies than in previous years.         60% of the
companies surveyed again indicated a preference for using recruitment
consultancies in sourcing quality senior staff. Once more there appears to be
more of a reluctance to use online job boards. Press advertising has continued
to decline, but should still be viewed as an excellent method to attract the
“passive” jobseeker at Finance Manager level and above.




                                      -18-
 SELECTION METHODS
 Once an applicant has been sourced, irrespective of the methodology used, the
 selection process will generally involve a three-stage process incorporating
 traditional and/or behavioural interviews, and reference checking.




                                        Selection Methods

35%

30%

25%

20%

15%

10%

5%

0%
      Traditio nal   B ehavio ural    Online        Online     P sycho metric   Reference   Other
       Interview       Interview     Screening   A ssessment       Testing      Checking
                                      To o ls       To o ls



 Figure 5: Selection method used in recruitment.
               (NOTE: Most participants chose more that one method)


 In 2004, it was noted that when recruiting for commercial accountants, 67% of
 the companies surveyed use traditional interviews. There appears to have been
 a dramatic shift away from traditional interviews, with 34% of organisations now
 employing more sophisticated behavioural techniques, which should result in
 more successful recruitment.




                                                     -18-
 IMPORTANT ATTRIBUTES FOR AN ACCOUNTANT IN COMMERCE
 In both 2003 and 2004 Business Acumen was cited as the most important
 attribute for a commercial accountant. In 2005, this had fallen to 3rd place, with,
 as we predicted in 2004, technical competence / knowledge becoming the most
 salient. This can be attributed to IFRS and SOX. It has also become much more
 important for accountants to produce accurate work. Both written and verbal
 communication skills appear to have reduced in importance, currently sitting in
 8th and 5th rank respectively.


 The continued low importance given to leadership abilities and the potential to
 advance is a surprising and somewhat disappointing outcome in a rapidly
 improving job market. If CFOs have a desire to expand teams and reduce
 turnover these are important attributes to recognise and develop. Table 1 shows
 the change in preferred attributes that employers seek when recruiting
 accountants in commerce.


 Table 1: Important attributes for 2003, 2004 and 2005
Importance      Importance        Importance                   Attribute
   2005              2004             2003
     1                 6                 5         Technical knowledge
     2                 5                 7         Work accuracy
     3                 1                 1         Business acumen
     4                 2=                4         Team player
     5                 2=                2         Verbal communication skills
     6                 4                 8         Timeliness of work
     7                 9                 9         Leadership abilities
     8                 7                 3         Written communication skills
     9                 8                 6         IT/Systems/E-commerce skills
    10                 10               10         Potential to advance




                                        -18-
TEMPORARY AND CONTRACT STAFF


As an alternative to employing full time staff, or to assist in times of need, most
organisations will engage the services of temporary or contract staff. In 2005
88% of the respondents engaged the services of temporary staff and 77%
engaged contractors.


Driven predominantly by business demand, temporary and contract staff will
generally be engaged to:


• assist with special projects
• cover leave or vacant positions
• assist with individual workloads


This usage of temporary and contract staff may be in indication that employers
are unable to source suitable permanent employees.          The “Temp to Perm”
option has also become more popular, with employers taking advantage of the
“try before you buy” option to enable them to test the suitability of the selected
candidate to ensure that they secure the best candidate in the market.




                                       -18-
RETENTION STRATEGIES
A number of surveys conducted in early 2005 (including those by Sensis and
the Australian Chamber Commerce and Industry) ranked staff retention as the
number one issue facing CEOs. Not surprisingly recruitment, productivity and
retention is also the most significant challenge to Human Resources across all
sectors. The skills shortages is in the press daily and is now a key economic
concern as well as a political football!


As Table 2 below demonstrates companies have addressed the financial side of
the challenge through Performance Based Incentives with 100% of companies
aiming to retain staff through this method.


Table 2: Retention Strategies


                     Retention Strategy                       (%)
         Performance Based Incentives                         100
         Career Pathing / Planning                             23
         Flexible Working Arrangements                         67
         Staff Activities                                      34
         Training / Seminars                                   89
         Achievement Awards                                    32
         Other                                                 11




The extent of flexible working arrangements (67% of companies surveyed) is
another encouraging sign. Organisations have challenged work practices and
changed attitudes as a commercial imperative – for both attraction and
retention. Offering more flexibility enables companies to both attract and retain
a higher calibre of candidate.




                                           -18-
The most staggering statistic in this year’s data is the low (23%) focus on career
pathing and planning. Whilst it can be argued that Generation X and Y don’t
want long term careers in the same organisation it is remiss not to structure and
talk to staff about their aspirations and how the company can realise them. If
you don’t some one else will!


When structuring your retention strategies it is critical to consider who, what and
when staff are surveyed. Staff won’t necessarily confide in their direct manager
or even the HR Manager. Exit interviews are too late! The cost saving in
retaining staff over the cost and risk of replacements (if you can find them) is
easily measurable. If you need help with staff retention Olivier Retention
Partners can offer independent advice.




                                       -18-
                      INTERNET PRACTICES

Once again it can be seen that there has been a decrease in the number of
companies using their websites to advertise vacancies. As has already been
suggested this may be due to the poor quality which the web may attract.


Table 3 below lists the percentage of respondents who use their website for a
particular purpose.


Table 3: Website Use and Importance


                      Use                   2004 (%)       2005 (%)
      Recruitment                              64              34
      Training and development                 16              23
      Corporate communication                  80              66
      Branding / marketing                     67              67




                                     -18-
                  REMUNERATION TABLES

TABLE 1 - CLERICAL ROLES


                                                    Remuneration Package
Position                                          $Low                     $High
Accounts Clerk                                    37,000                   45,000
Bookkeeper                                        40,000                   55,000
Accounts Payable Clerk                            36,000                   43,000
Accounts Receivable Clerk                         37,000                   43,000
AP/AR Supervisor                                  46,000                   63,000
Payroll Clerk                                     47,000                   55,000
Credit Officer                                    39,000                   50,000




Note: Remuneration package includes all benefits such as superannuation, motor vehicle and
parking allowances but excludes bonuses and study support.




                                           -18-
TABLE 2 – SPECIALIST ROLES


                                                     Remuneration Package
              Position                             $Low                     $High
 CFO                                               150,000                 217,000
 Finance Director                                  130,000                 175,000
 Financial Controller                              108,000                 150,000
 Finance Manager                                   84,000                  123,000
 Company Accountant                                80,000                   94,000
 Treasury Accountant                               57,000                   94,000
 Tax Accountant                                    60,000                   98,000
 Internal Audit                                    75,000                  125,000
 Financial Analyst                                 63,000                  105,000
 Business Analyst                                  60,000                  110,000
 Group Accountant                                  65,000                   90,000
 Management Accountant                             63,000                   85,000
 Financial Accountant                              55,000                   74,000
 Assistant Accountant                              38,000                   55,000
 Graduate Accountant                               37,000                   46,000




 Note: Remuneration package includes all benefits such as superannuation, motor vehicle and
 parking allowances but excludes bonuses and study support.




                                            -18-
                  ABOUT OLIVIER GROUP
Our team provides specialist recruitment services for temporary, permanent and
contract positions in the following areas and sectors:


• Commercial Accounting
• Chartered Accounting
• Sales & Marketing
• Office Support & Administration
• Executive


We deliver an experienced and constructive recruitment consultancy service
that combines the resources of a large, established organisation with the
personal care, attention and speed of a boutique firm. Our mission is “to let only
the finest through”.   We are committed to sourcing and selecting the finest
candidates to assess their suitability for the opportunities available.


Our clients include some of Australia’s most prominent professional services
firms, financial service groups, and listed companies. We place people at all
levels within these organisations ranging from entry-level positions to Executive
Directors.


In 1995 Olivier became one of Australia’s first consultancies to advertise on the
net. Since that time we have become leaders in the field of e-cruitment through
our research and advisory services. In 2004 we launched Olivier Retention
Partners, a unique service amongst recruiters.           We assist with employee
engagement and retention strategies to help you retain and maintain your
talent.


Olivier is a member of the Recruitment Consulting Services of Australia
(“RCSA”) and an active participant in the Australian Human Resources Institute
(“AHRI”).


                                        -18-

				
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