Accounting and Finance: The end of wage inflation?

Wage inflation, and our economy’s ability to sustain the ‘race to the top dollar’ has been a hot topic of discussion recently.Severe labour shortages across many sectors have meant that candidates are in the driving seat, and are able to pick and choose between opportunities.

While we know that there are many factors that influence a candidate’s decision-making, salary remains high on the priority list. Especially so with the rising cost of living. To secure the best talent, employers are having to offer more.

NOT EVERYONE IS A WINNER

The accounting sector is no different to many others. In fact, the past 6-9 months has seen the largest rate of wage inflation that we’ve ever seen. However, when we analyse this data further, we can see that there are areas within the sector that highlight this more than others.

Newly Qualified CA’s – “First Movers”

• 3 years work experience.
• Moving out of Chartered Accountancy Firms into commercial organisations
• Now commanding: $110,000 – $120,000
• Nine months previous: $90,000 – $100,000

1-3 years Post-Qualified CA’s

• Now commanding: $130,000 – $140,000
• Nine months previous: $110,000 – $120,000

It appears that the more senior you get, the less likely you are to see such significant increases. Wage inflation appears to plateau around the Financial Controller-level and above. By the middle of 2023, we’ve seen a real slowing down of the increases, even at the newly qualified level. It appears we may have finally hit the salary ceiling.

EMPLOYERS: ARE YOU WILLING TO PAY THE PRICE?

Despite the slowing down, in this market it’s crucial for employers to take stock and really think about who you want, and whether you’re prepared to pay over the odds to get them.

Be open minded and creative – it’s unlikely you’re going to get who you want for the price you want. If you can’t offer the salary your ideal candidate is looking for, are there other benefits you can add to the package to make the opportunity more attractive?

We know that candidates are looking for flexible working arrangements, that they’re keen to understand your values to ensure they align with their own, and they’re interested in knowing that you value health and wellbeing. Remember, salary is only a part of the picture – yes, it’s high on the priority list, but if you’re unable to compete on price, consider how you can clearly articulate your other value-adds.

In our opinion, that while the volume of talent will likely improve, albeit slowly, these new salary benchmarks are here to stay. If you find you’re really priced out of the market, other options to consider are filling the gap with a contractor or hiring someone more junior and supporting them with targeted learning and development to grow that resource