2016 ThompsonCook Melbourne Accounting Market

The structure and dynamic of accounting functions across Australia has changed dramatically over the past five years.

Be correctly informed. Make the right decisions.

The Melbourne Accounting Market

Accounting salaries:

Executive market $200k+: salaries are relatively flat and have been for 5 years. Positions that were recruited 5 years ago at $250k can be recruited in 2016 at the same salary package

Mid market $120k – $200k: Typically increase by CPI rates annually

Support market <$120k: Typically increase by $3k to $6k annually

Structural decline in salaries for leadership roles in accounts payable, credit and payroll: we have noted across Australia that many of these positions that may have paid $120k to $140k at a “Manager” level have declined by $10k - $20k in the past 4 years. For example it is now possible to source a credit manager at $110k whereas these positions historically paid $120k to $140k.

Bonus structures:

More often than not, most bonus arrangements are “discretionary”. In some large structured companies a formal bonus structure may be in place with weighted percentages for business and company performance. Typical bonus percentages include:

<$100k: often no bonus component

$100k to $200k: typically 10%

$200k to $300k: typically 10% - 20%

$300k+: typically 20% - 40%, with listed companies having both an STI and LTI component

Salary and bonus trends


“Delayering”

We continue to see instances of “Delayering” across Melbourne. Delayering occurs where clients are using a resignation as an opportunity to replace a position at a lower salary band. For example, the resignation of a Finance Manager at $180k can be replaced by a Finance Manager at $140k with the work effectively pushed down to a more junior employee. The driver behind these strategies is cost savings.

Employer challenges

Given many accounting teams have been through a few cycles of process improvement and cost cutting, most accounting functions are efficient and lean. Accordingly, when an individual resigns, many clients are keen to employ a candidate who has the skill set to complete a position immediately rather than employing a candidate who will grow into a role. The challenge for a candidate is that they may well find themselves completing the same role at a different company without any career development or growth.

Job volumes

Typically for every 1 position at $300k there would be 1 position at $180k, 2 positions at $120k, 3 positions at $100k, 5 positions at $80k and 3 positions at $65k.

Candidate sourcing

Seek is the dominant sourcing channel for all candidates – the clear frontrunner. The typical interview ratio on Seek is 1:30, only 1 person in 30 applications is interviewed.

Linkedin is an effective but cumbersome tool that is good for research and broad level headhunting.

Press advertising is almost ineffective and a very expensive sourcing channel.

Headhunting remains effective but time consuming. Interestingly headhunting now occurs for all levels of roles, not just senior level executive positions.

“Off market candidates”

With improvements in technology and social media, some of the in demand candidates can almost sit back and wait for jobs to be presented to them rather than needing to actively engage in the job search process.

Structure of accounting functions

The dynamics of job searching


Preferred supplier agreements

Most mid to large sized companies will have some form of preferred supplier agreement. Typical market fee rates are 15% below $200k and 18% above 200k+. The large banks and government PSA’s are typically 3-5 percentage points below these rates. Broadly, most PSA’s have a lot of leakage. Over the past 5 years, the trend has been away from recruitment 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.

Many candidates are wary of the financial services companies in Melbourne given the size and scale of these companies and lack of meaningful impact available for a finance executive.

The FMCG sector in Melbourne has undergone huge change in the past 12 months releasing a lot of accounting talent into the market.

The jobs market can be segmented as follows, using a typical company with 100 staff:

Boom market: 40 recruitment requirements: if a company has 100 staff, they will grow to 120 staff via 20 new hires and they are likely to lose 20 of their existing staff creating 20 replacement hires.

Flat market: 5 recruitment requirements: if a company has 100 staff they are likely to lose 5 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.

Our view is the Melbourne accounting market is “flat”.

The cost of recruitment for employers

Industry trends

National Job Market


The national jobs market is very mixed – across the key States, NSW is the strongest market, followed by VIC with QLD being in slow decline and WA continuing to structurally decline. The data below from the ANZ Job Ad Index shows data for each of the key States of QLD, NSW, VIC and WA.

NSW remains the strongest job market across Australia.

NSW benefits from global companies that have a presence in Australia, typically this will involve a head office in Sydney. Following on from improved global economy, some international companies have looked to expand in Australia and this typically happens via the head office.

The financial services industry is increasingly centralized in Sydney.

NSW has benefitted from a stable State government.

VIC remains second to NSW reflecting the size, scope and scale of the VIC economy relative to the other key States. VIC has experienced a slowing jobs market in the last couple of months of 2016

QLD has declined slowly off the back of the decreasing influence of oil, gas and mining combined with a weak State government.

WA has continued to suffer as a result of the decline in the mining sector and mining related services sectors. Interestingly, we have seen a number of quality accountants migrate to Melbourne in search of career opportunities off the back of the weak WA jobs market.


New South Wales

Victoria

ANZ Australian Job Ads / 4 October 2016 / 5 of 11

STATE AND TERRITORY JOB ADVERTISEMENTS FIGURE 6. NEW SOUTH WALES

Source: Department of Employment, SEEK, ANZ Research

* Latest data are for August 2016

FIGURE 7. VICTORIA



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ANZ newspaper job adsSEEK new internet job ads*Department of Employment new internet job vacancies*

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STATE AND TERRITORY JOB ADVERTISEMENTS FIGURE 6. NEW SOUTH WALES



FIGURE 7. VICTORIA



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Queensland

Western Australia


FIGURE 8. QUEENSLAND



FIGURE 9. WESTERN AUSTRALIA



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FIGURE 8. QUEENSLAND



FIGURE 9. WESTERN AUSTRALIA



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Documents

2016 ThompsonCook Melbourne Accounting Market