Sector Analysis: Accountancy
Published: 14 May 2008
There may have been job losses in the City, but the accountancy sector has held up well, despite fears of a more widespread economic downturn
Recruitment in the accountancy sector remains strong, even after reports of an economic downturn and a series of job losses in London's financial district.
Salaries in the sector have risen slightly, vacancies remain level and newly trained candidates are still in demand.
A JP Morgan report predicted 40,000 jobs would be lost in the City this year — at 6% of the workforce, it should be a worrying number. However, accountancy recruiters told Recruiter they weren't noticing a downturn in business.
Tom Forrest, associate director at finance recruiter Joslin Rowe, believes the perception of the credit crunch has been distorted by the media, calling the report "a headline grabber" which "sits in with the sensationalist reporting going on a the moment". He continues: "We haven't noticed it — where are these people being made redundant?"
Chris McCarthy, director of Hays Senior Finance, told Recruiter: "We work on four-week cycles — last cycle my sector was 8% higher in qualified appointments than the year previously. International business is growing exceptionally. Businesses with established operations in India and China are still going for it."
John Lacey, managing director of Longbridge Search & Selection, which specialises in legal, banking and financial sectors, believes clients have become more selective, increasing the requirements for candidates in banking and finance.
He says redundancies have been made in money-generating areas but they haven't had much effect on the accountancy sector.
Gavin Hinks, editor of accountancy magazine Accountancy Age, says: "If there was going to be a major blow we would not feel it until the third or fourth quarter, and a real downturn the following year — by then the economy may have recovered."
McCarthy says financial institutions often use economic downturns to restructure.
"If you go into a downturn, businesses look at the staff they have and replace under-performers. A percentage of the reported job cuts will be part of this."
According to reed.co.uk's salary index, which tracks online advertising, the number of vacancies for qualified accountants in England dipped slightly last year, from 10,000 to 9,000.
In Scotland the number of positions advertised peaked at 450 in December, returning to 275 in April, the same as the previous year.
The number of vacancies advertised in Wales has varied dramatically during the year. In December vacancies peaked at 230, but it currently stands at 110, down 30 on the same period last year.
According to the index, temporary positions for qualified accountants dropped during the year, from 800 to 700 in England, while permanent positions dropped from 8,200 to 6,800.
In Scotland, the number of job postings for qualified accountants was 210 in April, roughly the same as last year.
Hays has experienced an increase in demand for temporary personnel. "Temporary recruitment has increased — people are bringing in professionals to identify and implement what they could be doing smarter," says McCarthy.
According to the index, salaries in England remained level at around £45,000. In Scotland there was a significant rise, from £40,000 to £45,000.
There is a shortage of newly qualified accountants. McCarthy told Recruiter: "In the newly-qualified market, demand exceeds supply. Historic weaknesses in training mean there are still limited numbers of qualified accountants coming through."
Hinks says: "After the dotcom bubble burst, graduate recruitment was scrapped. People are keen not to make the same mistake again."
As banks try to evolve structurally, there has been an increase in demand for candidates with excellent communication skills.
McCarthy says businesses want people who can use numbers to drive an organisation and strengthen succession planning.
• Sourced from reed.co.uk's salary index
christopher.goodfellow@centaur.co.uk Accountancy (PDF 132.8K)
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