" alt="">01.03.2024
Are you ready for Annual Reviews?
Am I paying my staff enough? What is the appropriate inflationary rise? How do we compare with our competitors? These are just some of the questions I am regularly asked as the accounting profession moves from the hectic tax season to the world of annual reviews.
It would be easier if I could give an exact answer, but there are many variables to consider. So, while we prepare our Annual Salary Review, we wanted to share an insight into trends from the past 12 months that will help you remain competitive in the market and supportive of your team.
KEY TRENDS
Despite a slowdown in inflation, the cost of living is still driving people to search for new roles that increase their income. Of course, many more factors influence job seekers, but salary is an important part of the jigsaw and as a good employer, you must get the balance right.
With a high demand for good people, there remains an easy temptation to switch for more. It wouldn’t be the primary motivation for my career choices, but pound signs have definitely been driving a desire for change.
Interestingly, the gender pay gap is still prevalent in accountancy. According to the ONS, the median hourly full-time pay gap increased to 7.7% in 2023, so there is still a lot of work to be done. To ensure you support your female staff, I encourage you to remember this at review time.
Employers continue to find staff training a challenge when people work from home. You simply don’t learn as much remotely, and we have found that some employers’ expectations for delivery have fallen short of what they are paying.
Candidates have also found challenges when switching jobs linked to home working. When required to be in the office full-time during their probation and to work in a hybrid way thereafter, it doesn’t always fit with the lifestyle they have established. Adjusting their routine for 3-6 months can be a barrier to accepting a new role.
The Big 4 and national firms have a clear advantage as they can offer more flexibility. Not as reliant upon staff being in the office, they offer a range of working patterns, something much harder to achieve for smaller firms.
Having said that, there has been an upturn in the level of interest in smaller firms due to the attraction of working a more 9 to 5 role and less pressure than the demands of the Big 4.
FOOD FOR THOUGHT
In 2024, the accountancy sector will continue to face candidate shortages. Coupled with a scarcity of new skills that are changing the way the sector operates – data analysis, technology integration, and AI – we expect salaries to continue an upward trajectory.
With bonuses introduced more widely to combat this, the biggest attraction for our candidates is the balance between salary and flexible work patterns, with firms offering consolidated hours or a 4-day working week having the upper hand.
We expect to see this level out in 2025 as what people want is to be able to live in the same way as they have been doing. With 60% of monthly salaries spent on essential purchases and 1 in 5 unable to save each month, most monetary requests are linked to being able to live comfortably rather than greed.
Undoubtedly, the best investment any business can make is in its people, but it needs to be the right people. Whatever you choose to do with your annual reviews, I urge you to also place a renewed focus on your recruitment process.
If you can get this right, you will see improved productivity, a better culture, and increasing levels of client and customer service, which all go to directly improve the bottom line and keep your team happy.
