2020 MELBOURNE ACCOUNTING MARKET - Thompson Cook
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2020 MELBOURNE ACCOUNTING MARKET
NATIONAL JOB MARKET
WE HAVE INCLUDED BELOW TWO KEY
EMPLOYMENT GRAPHS:
z The ANZ Job Ads Index which shows historical -1%
job ad volumes over many years
y It can be seen that Nationally across Australia -3%
job ads are trending down suggesting the jobs
-8%
market will be challenging in 2020
z The SEEK Job Ad Index for Accounting Jobs -13%
which shows by State job ad volumes versus last
year
y Clearly the major States of NSW and VIC are
-6%
showing declines in job ad volume with the
other States being mixed
Source: Seek Employment Index Jan 2020
It is interesting to reflect on the objective jobs data
in these two graphs and the conclusions that can
be drawn for the Melbourne accounting market. The
graphs clearly suggest the Melbourne accounting
market should be a flat market with less jobs
available. However, sentiment amongst companies is
THE JOBS MARKET CAN BE SEGMENTED
that it is very hard to find quality accounting talent
and many good jobs are available.
AS FOLLOWS, USING A TYPICAL
COMPANY WITH 100 STAFF:
z 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.
z Positive market: 10 recruitment requirements: If a
company has 100 staff, they will grow to 105 staff
via 5 new hires and they are likely to lose 5 of
their existing staff, creating 5 replacement hires.
z Flat market: 5 recruitment requirements: If a
company has 100 staff, they are likely to lose 5
staff, creating 5 replacement hires.
z 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.
2020 Melbourne Accounting Market260
240
Seasonally adjusted
Number of job ads per week, 000s
220 Trend
200
180
160
140
120
100
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Source: ABS, SEEK, Dept of Employment, Skills, Small and Family Business, ANZ Research
SALARY AND BONUS TRENDS
ACCOUNTING SALARIES:
z Executive market $250k+: While salaries have z First mover CA’s from KPMG, EY, PwC and
been relatively flat for about 5 years, there have Deloitte: As is often the case when there is strong
been some signs that executive salaries are demand for accountants, the salary levels for
beginning to trend upwards, this was especially Chartered Accountants moving out of KPMG,
the case in 2019. Positions that were recruited 5 EY, PwC and Deloitte have all increased notably
years ago at $250k can most likely be recruited in the last two years. Typical 2020 first move
for $300k in 2020. The most significant change salaries are:
we observed in 2019 was CFO salaries for mid-
y 3-year CA $80k
sized companies with revenues between $30m
to $200m. Previously, we could recruit a CFO y 4-year CA $95k
at $200k, the salary banding is now firmly at y 5-year CA $110k
$250k+. y Manager CA $120k
z Mid-market $140k – $200k: Salaries at this level y Director CA $170k
typically increase by $4k-$8k annually. However,
for 2020, companies are providing increases of
$5k-$10k.
z Support marketBONUS STRUCTURES:
z Bonus structures are very consistent and have not
changed a lot over the past 3 years.
z 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:
yEMPLOYER CHALLENGES:
Given that many accounting teams have been through
multiple cycles of process improvement and cost
cutting, most accounting functions are efficient and lean.
Accordingly, when an individual resigns, many companies
look to employ a person who has the skill set to complete
the position immediately rather than employing a person
who will grow into the role. The challenge for a candidate is
that they may well find themselves making a lateral career
move – completing the same role at a different company
without any career development or growth.
This issue remained prevalent in 2019, however with the
demand for accounting staff being high, many candidates
are able to choose between roles. Accordingly, in 2020 more
companies will be open to hiring someone who will grow into
a role.
In the last two years we observed the best companies were
able to accelerate a recruitment process for a standout
person whom they wanted to secure for their business. For
example, a typical recruitment process may take 10 business
days from first interview to offer, however a nimble company
would accelerate this into a 4-day turnaround for the right
individual. This will continue in 2020 with some companies
using this accelerated model as a deliberate strategy to gain
an advantage if required in the so called “demand for talent”.
SPECIALIST FUNCTIONS
TAX | TREASURY | CORPORATE DEVELOPMENT | RISK
The accounting functions of Tax, Treasury, We expect this trend to continue in 2020.
Corporate Development and Risk are all The specialist function of Risk will experience
becoming increasingly focused and smaller in the most growth in 2020 due to the Banking
size. Royal Commission which has influenced many
large ASX companies to refocus on their Risk
In some companies the functions have been
management functions.
outsourced entirely to PwC, Deloitte, EY,
KPMG and other specialist consulting firms.
For example, Tax functions are almost half the
size of what they were 10 years ago in many
companies, excluding the banks and large
mining companies.
2020 Melbourne Accounting MarketTHE DYNAMICS OF JOB SEARCHING
JOB VOLUMES:
Typically, for every 1 position at $300k there is 1 LinkedIn remains an excellent tool for company
position at $180k, 2 positions at $120k, 3 positions at research and people research.
$100k, 5 positions at $80k and 3 positions at $65k.
Press advertising has almost ceased for accounting
This remains unchanged in 2020.
positions as companies have found it to be
prohibitively expensive and a poor sourcing channel
for accountants relative to Seek, Linkedin and Indeed.
JOB SEARCHING: Headhunting remains an effective tool for many
Seek is the dominant advertising channel for all jobs – companies. Interestingly, headhunting now occurs
however Linkedin is gaining traction and is perceived for all levels of roles, not just senior level executive
to have better quality jobs advertised directly by positions. At ThompsonCook, we have a view that
employers. almost everyone will consider a good opportunity
We have also observed that Indeed is gaining traction that will grow their career.
as a new place to search for jobs given they host jobs
that are not on Seek.
Historically, the typical interview ratio on Seek is
“OFF MARKET CANDIDATES”:
1:30, only 1 person in 30 applications is interviewed. With improvements in technology and social media,
In the last two years this has increased to 1:45 – some of the better quality candidates can almost sit
why? Because it has become harder and harder to back and wait for jobs to be presented to them rather
find good quality accountants in Melbourne and we than actively engaging in the job search process. This
expect this trend to continue in 2020. trend will continue in 2020.
2020 Melbourne Accounting MarketTHE COST OF RECRUITMENT FOR EMPLOYERS
PREFERRED SUPPLIER AGREEMENTS:
Most mid to large sized companies will have some form of preferred supplier agreement.
Typical market fee rates are 16% below $200k and 18% above 200k+. The large banks and government PSA’s are
typically 3%-5% 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. In 2020 as the demand for
accountants continues to grow, preferred supplier agreements are becoming less relevant as line managers just
want access to the best available accountants.
expertise
challenge
opportunity
focused on Melbourne
experts in Accounting Recruitment
ThompsonCook was established in 2016 by Alexander Thompson Salary Benchmarking
and Matthew Cook - with a single strategy of providing high quality Career Planning
accounting recruitment services in Melbourne. The business has
grown rapidly as people begin to understand the value of dealing we are A team of 17 experts
with a recruitment firm that is only focused on one thing - accounting
we only do Accounting
recruitment in Melbourne.
We understand there are many accounting recruitment firms in
Melbourne - but we are the only firm that just does accounting. We
believe that over time we will earn a reputation in Melbourne for
providing advice that is frank, accurate and empathetic.
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