Talent crunch driving higher salaries from Finance employers in 2021

With job vacancies in the finance and insurance sector at a record high, deepening skills shortages are prompting CFOs to rethink remuneration and benefits to attract and retain top candidates. The newly released 2021 Salary Guide by specialised recruiter Robert Half reveals that Australian CFOs are particularly concerned low remuneration is driving employee turnover and threatening the sector’s rate of recovery, putting upward pressure on salaries for specialised skills.

  • 61% of Australian CFOs plan to extend salary increases to finance staff in the coming year.
  • 62% say they are willing to increase their initial salary offering for new financial talent.
  • 61% of CFOs are introducing new non-financial employee benefits to attract new hires going into 2021.
  • 78% of CFOs concerned about losing their top finance talent and 38% believe it will be more challenging to find qualified employees compared to before the pandemic.

With job vacancies in the finance and insurance sector at a record high, deepening skills shortages are prompting CFOs to rethink remuneration and benefits to attract and retain top candidates. The newly released 2021 Salary Guide by specialised recruiter Robert Half reveals that Australian CFOs are particularly concerned low remuneration is driving employee turnover and threatening the sector’s rate of recovery, putting upward pressure on salaries for specialised skills.

Salary trends in 2021 for existing employees

In a disrupted market, businesses who can accelerate their recovery, reduce costs to manage day-to-day functions, and identify new revenue opportunities will be able to get ahead of their competitors, driving fierce competition for skilled finance professionals to solidify these gains, fast.

The study of 100 CFOs found that nearly four-fifths (78%) of CFOs are concerned about losing their top talent due to the impact of COVID-19.

With retention a top priority in an environment where organisations are still actively poaching top finance talent, more than three-in-five organisations (61%) plan to extend salary increases to finance staff in the coming year. Of those planning salary increases, almost one-quarter (22%) will extend increases to all finance employees while 39% say they will only offer salary increases to top performers.

While national wage growth is forecast at a stagnant 1.5% for the year ahead , Robert Half research reveals that the average increase for finance professionals expecting a salary increase is 5.6%, more than 4% above national wage growth.

Salary trends in 2021 for new employees

As uncertainty encourages many workers to stay with their existing employers, the reduced flow of foreign talent because of stricter visa requirements is also elevating competition for top talent. Almost two-fifths (38%) believe it will be more challenging to find qualified employees compared to before the pandemic, emphasising the dual challenges of attraction and retention in the finance sector. To attract new talent in a skills-short market, nearly two-thirds (62%) of companies say they are willing to increase their initial salary offering to secure finance professionals. Of these, 29% say they will only increase salaries for top talent while 33% will increase salaries for all.

The financial employment landscape

Finance teams are key to navigating the ongoing impacts of COVID-19 with companies focussing on staff who have the skills to identify new commercial opportunities, drive operational efficiencies, and guide future business strategies. Demand for new finance staff is strong across many industries including manufacturing, property and real estate, financial services, retail, FMCG, and media and advertising.

According to Robert Half, the specialist skills within finance and accounting that are proving to be the most difficult to find amongst job candidates include business/financial analysis (26%), compliance (24%), financial planning and analysis (24%), risk (22%), and internal audit (22%). With limited supply and high demand in the market, these skillsets are well positioned to command highly competitive and even above-market salary offers from employers eager to secure their talent.

Alternative benefits to strengthen employee retention

Aside from salary, over one-third of CFOs are concerned that low employee morale (35%) and a dissatisfaction with corporate culture (36%) are hindering their company’s ability to retain key employees. Consequently, while remuneration remains a key component of staff satisfaction, three-fifths (61%) of CFOs are introducing new non-financial employee benefits to attract new hires going into 2021. Some of the top non-financial employee benefits include flexible work hours (32%), health insurance (29%), and permanent hybrid working arrangements (27%) – involving a mix of remote and in-office work hours. After a turbulent 2020, employees are also placing high value on company wellness initiatives (24%) such as mental health support, gym memberships, and financial counselling.

Experienced and skilled finance staff with data analysis and forecasting skills, as well as those with commercial and cash management capabilities, are some of the most valuable skillsets a company can have for navigating short-term disruption and achieving long-term growth. While remuneration remains a key component of attracting and retaining finance talent and there is a willingness to offer salary increases, given the current climate, not every company is positioned to engage in a bidding war for top talent as they recover from months of uncertainty,’ said David Jones, Senior Managing Director Asia Pacific in announcing Robert Half’s 2021 Salary Guide.

“Increased demand for finance skills will put more pressure on companies to increase remuneration while a competitive market and dwindling skills supply means finance professionals are becoming savvier about the market value of their skills – despite the stagnant wage climate. Consequently, finance leaders should build a robust and responsive recruitment strategy and be prepared to move quickly – negotiating using both financial and non-financial benefits. Companies that offer highly competitive salaries, flexibility, career development, job security, and a healthy work-life balance will be at an advantage,Jones concludes.