Banner Default Image

What is having the biggest impact on salary expectations in Finance and Accounting? 

blog author

8 days ago

by Eleonore Jones

What is having the biggest impact on salary expectations in Finance and Accounting? 

In today’s dynamic financial landscape, salary expectations within Finance and Accounting are being influenced by various factors. The industry is undergoing rapid transformation, driven by technological advancements, shifting work models, economic pressures, and evolving regulatory demands. Companies seek top-tier talent and aim to retain skilled professionals amidst a competitive job market. 

At the same time, finance and accounting experts are recalibrating their expectations, valuing a combination of competitive pay, benefits, flexibility, and job stability. This evolving environment has led to significant shifts in what both employers and employees prioritise, ultimately reshaping the compensation landscape. Here's a breakdown of the biggest influences:

1. Talent Shortages and High Demand for Specialised Skills

Data Analytics & Technology: With the rise of data-driven decision-making, professionals skilled in data analytics, financial modelling, and forecasting tools are in high demand. This trend is pushing up salaries, especially for roles that require expertise in platforms like Power BI, Tableau, or advanced Excel.

Digital Transformation: Automation, AI, and cloud computing are reshaping the industry. Professionals who understand Robotic Process Automation (RPA), blockchain, or AI-driven financial tools are commanding higher salaries. Finance and Accounting departments are also looking for individuals who can integrate technology and finance, driving up expectations for those with dual expertise.

Accounting Specialisations: Areas like tax, auditing, forensic accounting, and regulatory compliance are seeing increased demand due to evolving regulations and complex tax environments. Candidates with niche expertise in international tax laws or anti-money laundering (AML) are particularly sought after.

2. Remote Work and Hybrid Models

Location Flexibility: The shift to remote and hybrid work has blurred geographical boundaries for salary expectations. Companies are now competing for talent on a broader scale, leading to salary adjustments based on the cost of living in different regions. Many professionals expect compensation that reflects their skill set, not just their physical location.

Competition for Remote Talent: Top candidates are expecting higher pay for remote roles, given the increased flexibility and competition among companies to attract top talent. This has led to an overall upward pressure on salaries, especially for roles that can be performed fully remotely.

3. Inflation and Cost of Living Adjustments

Rising Inflation: Inflation is impacting salary expectations across the board. Finance and Accounting professionals, who are often well aware of economic trends, are factoring inflation into their salary negotiations. Employers are feeling pressure to increase wages to maintain purchasing power for employees, leading to higher salary demands.

Cost of Living Increases: In areas with significant rises in the cost of living, particularly in financial hubs like London, salary expectations have increased accordingly. This is causing a shift even in remote roles, where some candidates expect compensation packages adjusted for higher living costs in target areas.

4. Regulatory Changes and Increased Complexity

New Compliance Requirements: With evolving regulations (like ESG reporting, IFRS changes, or new tax laws), there’s a greater demand for compliance specialists and financial controllers. As the workload and expertise needed to stay compliant increase, so do salary expectations.

Environmental, Social, and Governance (ESG) Focus: There’s a growing emphasis on ESG reporting and sustainability metrics. Finance professionals with expertise in ESG compliance, sustainability accounting, and non-financial disclosures are in short supply, leading to increased salary expectations.

5. Talent Retention and Competition

Retaining Skilled Employees: With a competitive job market, companies are facing pressure to increase wages, offer bonuses, or introduce incentives to retain top talent. This includes mid-level roles like financial analysts or accountants, who are seeing better offers from competing firms.

Poaching by Competitors: High turnover in the industry due to better offers from other companies or sectors has led to a “salary arms race,” where companies are forced to match or exceed offers to retain their workforce.

6. Focus on Work-Life Balance and Benefits Beyond Salary

Holistic Compensation Packages: Candidates are not just looking at base salary; benefits like healthcare, retirement plans, flexible work arrangements, bonuses, and stock options are now a significant part of the conversation. Many companies have adjusted their total compensation packages to remain competitive.

Emphasis on Flexibility: Many professionals value flexible schedules and hybrid work models as much as (or more than) a salary increase, and companies that can't offer flexibility may need to provide higher salaries to attract similar talent.

7. Skills Gap in Finance Technology

Accounting Software Proficiency: Skills in specialised accounting software (like SAP, Oracle, and NetSuite) are increasingly sought after, pushing up pay for candidates with this expertise. Those familiar with enterprise resource planning (ERP) systems or capable of financial process automation are seeing better salary offers.

Cybersecurity Awareness: With the increasing focus on data security, there’s a need for finance professionals who are also savvy in cybersecurity, especially as financial data is highly sensitive. This specialised skill set is leading to higher salary expectations.

8. Generational Expectations and Shifts

Millennials & Gen Z Impact: Younger professionals are placing a premium on transparency, purpose-driven work, and work-life balance, leading to shifts in salary negotiations. They are more willing to change jobs or pursue non-traditional finance roles if compensation and benefits do not align with their expectations.

Boomer Retirements: As Baby Boomers retire, there’s a generational shift with Millennials and Gen Z professionals stepping into leadership roles. This has shifted expectations, with newer generations often prioritising different benefits (like student loan assistance or mental health support) over traditional perks.

9. Economic Uncertainty and Market Volatility

Uncertain Economic Environment: Economic volatility, including fears of recession or economic slowdown, is leading finance professionals to seek higher base pay as a security buffer. This desire for financial stability can result in elevated salary expectations, especially in roles that are perceived as more stable (like risk management or financial planning).

10. Private Equity and Investment Management Trends

Demand for Performance-Based Compensation: In investment-focused roles, there's an increasing expectation for performance-based bonuses, profit sharing, and equity stakes. As private equity and venture capital continue to be active, top talent expects compensation linked to company performance, influencing overall salary benchmarks.

Competition for Financial Advisors and Analysts: The increasing focus on personalised financial advice and wealth management has driven demand for skilled financial advisors, portfolio managers, and investment analysts, leading to higher salary expectations in these areas.

Overall Outlook

Salary expectations in Finance and Accounting are higher than ever, reflecting the complex interplay of technological advancements, economic changes, and evolving workforce priorities. As organisations compete to attract and retain the best talent, they must balance financial incentives with holistic compensation packages that include flexible work arrangements, professional development, and long-term career opportunities. 

For finance professionals, the demand for specialised skills and the increasing complexity of the industry offer opportunities for significant career growth and compensation. Navigating these shifts successfully requires adaptability, a keen understanding of market trends, and a commitment to ongoing skills development to meet the demands of a rapidly changing financial sector.

Share this article