2015GLOBAL TREND REPORT SPECIALIST FINANCE

2015 | OUTLOOK

A BROADLY POSITIVE GLOBAL MARKET

• The Specialist Finance recruitment market in Ireland, the UK and United Arab Emirates is strong, largely thanks to the economic upswing

• The market in Japan is also strong, despite a sluggish economy

• In China the market is still strong though a little more challenging for candidates than a couple of years ago

• Developments on the mainland have adversely affected Hong Kong

• In Singapore the market is depressed, largely because of offshoring, though this may be a temporary phenomenon

• In most markets audit/internal audit is the main growth area

In line with our commitment to keep professionals working in the Specialist Finance discipline up to date with employment and recruitment trends, at the end of 2014 Morgan McKinley conducted an international survey of its consultants in seven markets. The global picture shows an upward trend but with significant regional variations, not just in demand but in candidate and employee attitudes to issues such as work/life balance.

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QUICK LINKS

MAINLAND CHINA ............................... 2HONG KONG .........................................4IRELAND .................................................. 5JAPAN ....................................................... 7SINGAPORE ............................................ 9UNITED ARAB EMIRATES .................. 10UNITED KINGDOM ............................. 12

Growth rates have slowed in Mainland China and there is some economic uncertainty. We saw little discernible change to the recruitment market in Specialist Finance in 2H 2014, although in many companies recruitment budgets appear to be static or even declining. Most hiring has been focused on replacement headcount.

In addition to professional accounting qualifications such as ACA and CIMA, fluency in a foreign language is likely to be the best qualification for landing a job at a multinational or internationally active company (though for

this reason many Specialist Finance professionals may prefer to apply for roles at domestically focused companies).

“Finance professionals will find it more difficult to find their dream role than was the case a couple of years ago,” says Marlon Mai, Associate Director, Finance at Morgan McKinley’s Shanghai office. “The market has become more competitive and hiring organisations’ expectations are therefore higher. ‘Business partner’ is a phrase that we hear a lot – companies are looking for candidates who can demonstrate that they add value to

the organisation that goes beyond technical competency in finance.”

In-depth knowledge of IFRS and US GAAP is a must for most reporting roles in multinationals, though as the gap between the two regulatory regimes closes, so experience of one rather than the other won’t necessarily exclude you from a role. There are a lot of ERP implementations taking place in China, in particular SAP, so this is also a useful skill to have on your CV.

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Companies are looking for candidates who can demonstrate that they add value to the organisation.

A TOUGHER ENVIRONMENT FOR SPECIALIST FINANCE PROFESSIONALS

MAINLAND CHINA

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SALARIES & BENEFITS

We expect to see merit increases of around 8% in 2015, rather less than finance employees might have expected in recent years.

Economic uncertainty and lack of confidence have had an impact on employment growth in Specialist Finance disciplines in Hong Kong. In particular, Hong Kong has been impacted by the Chinese government’s action to curb bribery and corruption on the mainland; Chinese customers are now rather more cautious about spending money on luxuries, to the detriment of the Hong Kong retail luxury goods sector. In addition, globalisation of some functions is having an impact. The main growth area currently is jobs in internal auditing, particularly at manager level with multinational enterprises. “Multinationals are currently using agencies to source potential talent,” comments Jacky Cheung, Manager at Morgan McKinley Hong Kong. “Long term, there is adequate local

supply to meet the demand and hiring processes can be lengthy as companies hold out for the right candidate at the right price,” he adds.

“The fourth quarter tends to be quiet in recruitment markets as the majority of employees are expecting year-end bonuses in December and discretionary bonuses after the Chinese New Year in February. We expect things to pick up later in the first half of 2015. For the moment, the candidate supply is weak but this is only seasonal,” says Cheung.

In 2015 we expect much of the recruitment activity to be focused on financial planning and analysis.

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Hiring processes can be lengthy.

DECLINE IN RETAIL DEMAND FROM THE MAINLAND HAVING AN IMPACT

HONG KONG

SALARIES & BENEFITS

Annual salary increments are currently running at around 4-5%.

The economic upswing, organisational changes and compliance and regulatory issues are driving demand for Specialist Finance professionals in Ireland. In practices we have seen a significant uptick in demand at the newly qualified level. “When the recession hit, most firms curtailed the number of graduates they hired from 2009 to 2012 and as a result there is now a smaller number of suitable candidates at this level,” comments Niall Hughes, Practice and Accountancy specialist at Morgan McKinley’s Dublin office. “Coupled with the upswing in business, companies are looking at a diminished talent pool and industry is generally seen as a more attractive proposition for people coming out of training contracts,” he adds. Although they are recruiting, some practices are trying to contain salary growth.

Senior Finance Recruitment Consultant at Morgan McKinley David Fitzgibbon also reports a shortage of mid-level hybrid commercial accountants. Internal audit and audit are the main growth areas. “Internal audit and risk advisory are very busy, with the demand driven largely by financial services clients of the leading practices as well as in-house at both multinational and indigenous enterprises. Demand is also picking up from small and medium sized local firms, which are positioning themselves for renewed growth, having cut back on their cost base from 2008 to 2013,” says Fitzgibbon.

Supply is generally adequate to meet the requirements of the in-house market, which is also able to access talent through contractors. However practices are looking overseas, both to the EU and

to English-speaking countries such as the United Kingdom, Australia and the United States.

Specialist Finance professionals looking to take a step upwards are advised to communicate clearly the commercial and analytical aspects of their role and how they were involved in key decision-making processes. “Although there is a high level of demand there is a lot of competition in the market. Candidates should ensure that their next move is to a role that suits and will support their long-term ambitions,” says Fitzgibbon. “SMEs are now hiring finance professionals who will add value to the business rather than just doing the books,” he adds.

As the talent supply is limited we are seeing the return of counter offers and multiple offers to candidates.

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SMEs are now hiring finance professionals who will add value to the business rather than just doing the books.

MARKET REVIVAL EXTENDS TO SMES

IRELAND

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SALARIES & BENEFITS

Salaries will increase in in-house roles but are static in practices. Many practices have cut benefits below manager level and some at all levels since 2008. Some of these benefits may be reinstated as the talent supply is weak.

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The dream of lifetime employment has ended in Japan.

Despite the introduction of a new sales tax and an overall cooling of the Japanese economy, the recruitment market in Specialist Finance has remained buoyant and even shown signs of improvement. Two of the key drivers have been organisational change and IT changes, such as the implementation of new ERP systems and financial applications and processes. Treasury accountants, internal auditors and auditors have been in demand, with practices recruiting at all levels from trainee upwards, while in-house demand has been focused on assistant manager levels and above. Some lower-level accounting functions are being moved to shared service centres in Japan or overseas for cost-reduction purposes.

The contract market has been especially buoyant. “As many companies have set limits on permanent headcount they are getting around the problem by taking on contractors. Some hiring managers

are bringing people on as temp-to-perm to get around permanent headcount caps,” says Brendan Walsh, Manager, Accounting & Finance at Morgan McKinley’s Tokyo office.

Many companies are finding other ways around the restrictions. “For example, those who do recruit permanent replacement headcount expect that new recruits will take on more responsibilities than the staff they are replacing (for example, overseeing an ERP implementation as well as managing the accounting team,”) says Walsh. For this reason, qualification by experience is often as important, or more important, than formal accounting qualifications on a candidate CV. Fluency in a foreign language is also frequently a requirement and, since SAP implementations are very big right now, exposure to this software platform is a major asset.

We have also detected other changes taking place in Japan. “Finance professionals are getting more proactive. The dream of lifetime employment has ended in Japan, as elsewhere,” comments Walsh.

In this environment it falls upon finance professionals to assume greater responsibility for career progression, developing a business partnering mind-set and thinking about how they can add value to their current employer and any company they are thinking about joining.

“Language and cultural barriers abound and many finance professionals have not yet learned how to move outside the finance silo and look at how they can help the business to achieve its targets,” says Walsh. Hiring organisations are very picky and will insist on candidates who tick most if not all of the boxes on a job description.

OPPORTUNITIES FOR FINANCE PROFESSIONALS WHO CAN THINK BEYOND FINANCE

JAPAN

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SALARIES & BENEFITS

We expect to see modest increases in the order of 5-10%. More employers are offering sign-on bonuses to get around tight salary bands.

Many Singapore-based commercial and industrial enterprises are currently downsizing and this is having an impact on internal audit teams in particular. They are doing this in a variety of ways, possibly removing the internal audit lead or senior managers or else reducing their intake of juniors. In other cases they are increasing the number of travelling auditors and among many Singapore-based finance professionals there is a reluctance to travel, while many employers are reluctant to take on talent from overseas.

Moreover, many regional treasuries are no longer based in Singapore, so organisations only require treasury accountants for back office work, reporting to an international or regional HQ, a role that will not suit many candidates. “Hence there is currently something of a mismatch between employers’ and candidates’ expectations,”

comments Yanni Ma’at, Manager, Accounting & Finance and Human Resources Recruitment (Commerce & Industry) at our Singapore office.

“The trend is away from Specialist Finance towards more generalist roles,” says Ma’at, “and most demand for new headcount is at junior/career starter and assistant manager levels.”

In this difficult environment we advise finance professionals to sit tight in their current jobs until they have a concrete offer of employment. Opportunities are declining at the moment, and many companies are now offshoring their tax function as well as treasury and internal audit.

“I think this is a temporary phenomenon and am positive that more specialist functions will return to Singapore in future,” concludes Ma’at.

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There is a mismatch between employers’ and candidates’ expectations.

SPECIALIST FINANCE IN (PROBABLY TEMPORARY) DECLINE

SINGAPORE

SALARIES & BENEFITS

Internal audit candidates will probably need to lower their expectations, especially if they are unwilling to travel. A move to tax functions used to bring a 20% increment but this is no longer the case.

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Employers understand that they are buying talent and are willing to pay for professionals who can take them to the next level. UNITED ARAB

EMIRATES

Many UAE-based organisations have now reached a critical mass and are expanding into new regions (especially the Commonwealth of Independent States and Africa). For this they require more Specialist Finance senior talent, particularly in areas such as internal audit, project finance and corporate finance. The energy and manufacturing sectors were particularly active in 2014. They are implementing organisational and IT changes to manage the expansion and are facing new compliance and regulatory challenges, which is also driving growth in an upbeat economy.

“On the other hand, many organisations have lost out on top talent because of lengthy hiring processes and political pressures,” says Trefor Murphy, Managing Director, Morgan McKinley MENA.

Gulf Cooperation Council (GCC) employers are currently willing to relocate senior level specialist talent, chiefly from mainland Europe, the UK and Ireland, North America and Australia, for treasury and project finance functions. International experience is often a deciding factor in the choice of candidate. “Employers understand that they are buying talent and are willing to pay whatever is necessary – within reason – for professionals who can take them to the next level,” says Murphy. The GCC is a very search-oriented market so professionals with stable career histories and who can demonstrate a successful track record will be approached by recruiters and potential employers when the time is right.

Hiring organisations in the UAE pay close attention to qualifications and expect applicants to hold

a relevant post-graduate Chartered Accountant qualification and an MBA or MSc.

Murphy’s advice to senior Specialist Finance professionals is “to do your due diligence before moving to a new employer. We’ve seen many cases of people changing jobs, only to leave 9-12 months later because the new company has made a change of direction. This does not look good on your CV and can have an impact on your future career prospects.”

The GCC remains an attractive location at all levels and Specialist Finance professionals are assuming an ever more influential role in shaping their companies’ future. Therefore, while there are excellent opportunities, competition for them is fierce.

DEMAND INCREASING AS UAE COMPANIES REACH CRITICAL MASS

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SALARIES & BENEFITS

We expect a sustained increase in salaries as specialist skills will be in demand, although competition will increase. Probably 10-15% annually.

We saw sustained demand for Specialist Finance professionals throughout 2014, and while much of this has been for replacement headcount, more organisations are chasing top talent. “There are plenty of opportunities so candidates should think carefully before making a move. Think about the job ahead of the one you are currently applying for and how you are going to get there,” says Josh Rufus, Manager at Morgan McKinley London, specialising in public practice.

This optimism also extends to in-house finance teams, where we have seen some churn. “Long-serving employees are deciding it is time to look at new options, and in many cases they need replacing without there being a natural internal succession,” says Ashley Crich, Finance Recruitment Consultant, Commerce & Industry. There has been demand in the commercial

and industrial sectors for capital management specialists and managers as well as cash management managers. “Within commerce the demand still appears to be in technical accounting roles, such as IFRS specialists, financial accountants and reporting managers,” says Crich. “It is therefore important to stay up to speed with changes in this accounting standard.”

In financial services we have seen some employers converting contract staff to permanent.

“There are more product control roles at assistant vice president level,” reports Joannides Nefino, Manager, Banking Markets & Finance. Auditors and senior auditors are heavily in demand. A professional accountancy qualification and excellent knowledge of IFRS and UK GAAP are must-haves, particularly for Big 4 practices.

The larger practices are facing a staff retention challenge as the lure of an in-house role is strong. “Many are now paying their staff overtime in a bid to attract and retain. They have come to realise that work/life balance is important,” says Rufus.

Overall it is very much a candidates’ market with the best of them receiving multiple offers. “One candidate was interviewed for, and offered, five positions in the space of one week!” says Rufus. However, it pays not to be complacent. “Try not to resign from your current job before securing your next permanent role,” advises Nefino. “Employers will question any gaps on your CV.”

Hiring processes can be lengthy and hiring organisations will find it difficult to meet salary expectations.

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Candidates should think about the move after next.

STRONG DEMAND FROM PRACTICES, BUT THE LURE OF INDUSTRY IS GREAT

UNITED KINGDOM

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SALARIES & BENEFITS

In the practices base salaries are currently flat so, with demand exceeding supply, hiring organisations have to pay overtime and other benefits to a much greater extent than in the past. In commerce and industry salary increases required to attract new hires are currently between 5 and 10%. Those staying in their present role are unlikely to see an increase above 3-5%. In financial services salary increases are likely to be at the upper end of these ranges or above.

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GLOBAL TREND REPORT SPECIALIST FINANCE

2015