GLOBAL TREND REPORT SENIOR FINANCE 015 2015 OUTLOOK
AN EAST-WEST DIVIDE In line with our commitment to keep professionals working in Senior Finance functions up to date with employment and recruitment trends, in the last quarter of 2014 Morgan McKinley conducted an international survey of its consultants in eight markets. Our report paints a very mixed global picture. Broadly speaking, the outlook is rather better (from a candidate perspective) in Ireland, the United Kingdom and the United Arab Emirates than in our APAC countries. In many countries employers expectations are becoming more and more demanding as candidates are required to take on additional responsibilities, such as driving transformation, ERP or compliance projects. Hiring processes are becoming increasingly lengthy and this increases the risk that employers will lose out to counter offers. QUICK LINKS AUSTRALIA... 2 MAINLAND CHINA... 3 HONG KONG... 5 IRELAND... 6 JAPAN... 7 SINGAPORE... 9 UNITED ARAB EMIRATES...11 UNITED KINGDOM... 12 In Australia there is a strong demand for strategic thinkers who can drive change Business partners are likewise in demand in China, where fluency in English is increasingly a requirement There are few new opportunities being posted in Hong Kong, and few candidates coming forward, but that should change after the Chinese New Year The best candidates in Ireland are receiving multiple offers and employers that do not act quickly are likely to lose out The market in Japan is generally robust, but hiring organisations are becoming more demanding Singapore is currently the toughest market, for a variety of cyclical and structural reasons The UAE is probably the strongest market, but candidates generally need local experience to succeed In the United Kingdom demand is strong and the focus has moved back to value-add roles, but the candidate flow is weak 1
Stakeholders require a senior finance view more than ever. AUSTRALIA INCREASED DEMAND FOR GOVERNANCE, RISK AND PROJECT CHANGE EXPERTS Although the market shows signs of improvement in Australia, opportunities at the senior level are relatively scarce and employers will wait for candidates who tick all the boxes before commencing them to interview. The skills and experience requested by employers often varies depending on the organisation, but for senior level roles board-level exposure and operational experience outside of a finance role can be highly regarded. Accounting qualifications are a given. Operational leaders require a senior finance view more than ever. Sound commercial and financial advice is critical as most organisations have an increased focus on governance, risk and financial control, says Matt Jacobs, Associate Director, Finance & IT with Morgan McKinley Australia. Economic uncertainty and continuing cost saving measures are dampening down demand. Despite the high expectations employers have when hiring externally, many companies will try to recruit directly in order to save on a recruitment fee. This means they often miss out on top talent by not completing a thorough market search and end up appointing someone who is not the best fit. In the long run, this can actually lead to a more costly recruitment process, says Jacobs. Demand continues for specialists in project finance and transformation roles; this is often driven by organisational restructures or changes to the IT infrastructure. Business intelligence systems are a particular focus as organisations look to exploit big data. SALARIES & BENEFITS Salaries are currently increasing at a rate of 5-10%. 2
Companies are looking for candidates who can demonstrate that they add value to the organisation. MAINLAND CHINA A TOUGHER ENVIRONMENT FOR SENIOR FINANCE PROFESSIONALS Growth rates have slowed in Mainland China and there is some economic uncertainty. We saw little discernible change to the recruitment market in Senior 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, with a focus on roles in strategic finance (commercial/fp&a) as well as CFO/Finance Director. Fluency in a foreign language and ability to communicate with the business are likely to be the important attributes for landing a senior role at a multinational or internationally active company. Senior 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. 3
SALARIES & BENEFITS We expect to see merit increases of around 8% in 2015, rather less than Senior Finance employees might have expected in recent years. 4
Most companies will promote internally before even looking at the external talent pool. HONG KONG A QUIET MARKET The recruitment market for Senior Finance professionals remained slow in the second half of 2014, with a prevailing mood of economic uncertainty depressing demand and globalisation shrinking many organisations finance functions. Hong Kong s retail and luxury goods sector has been particularly hard hit after the Chinese Government took action to raise awareness on bribery and corruption. As a result, consumers on the mainland have been rather more cautious in their spending. With many organisations in commerce and industry freezing pay and recruitment, and many consolidating functions, there has been little movement. In this environment; most companies will look to make an internal promotion before they even consider the external talent pool, says Jacky Cheung, Manager at Morgan McKinley Hong Kong. Any external recruitment that has taken place has been focused on strategic finance, systems and finance projects, and at the very top level (CFO and Finance Director). We expect to see new systems implementations and conversion projects initiated next year and this will stimulate the demand for experienced finance professionals who can lead these projects. Things may improve later in 2015 but the market traditionally goes very quiet in the lead up to the Chinese New Year, as people await first end of year bonuses and then discretionary bonuses in February, says Cheung. SALARIES & BENEFITS We expect to see increases averaging around 4-5% in 2015. 5
There is pressure on the contract market as candidates have more permanent options. IRELAND TOP CANDIDATES GETTNG MULTIPLE OFFERS In Ireland the economic upswing is making an impact on the Senior Finance recruitment market, with companies taking on new headcount in both financial services and commerce and industry. As confidence grows companies are investing in more commercial and regulatory roles. To secure their preferred candidate the focus now needs to be on streamlining the end-to-end recruitment process. Salary, benefits and clear progression plans are now equally weighed in the candidate s decision-making process. Companies that provide full visibility to these offerings during the interview process are inevitably securing the top talent. This is putting pressure on the contract market as candidates have more permanent options, adds Saoirse O Brien, Senior Consultant, Finance & Accounting. Whilst we have seen a growth in the economy the demand for high quality candidates remains competitive, with candidates receiving multiple job offers. In financial services in particular it is vital that Senior Finance professionals stay on top of the international regulatory environment and IFRS changes. Qualifications remain vital and it is important to keep up to date with the latest regulatory and reporting changes. In the current market, where there are plenty of good opportunities, my advice to candidates is to choose where they want to work very carefully. Working for a strong brand during your early to mid-career and building commercial awareness will ultimately help accelerate your progression into a senior role, says Grace Gilbert, Senor Consultant at Morgan McKinley, Dublin. SALARIES & BENEFITS We expect to see salaries increasing by about 5% on average in 2015 and bonuses reintroduced based on improved market sentiment. With the contract market heating up employees can expect to see more performance-related payments, including completion bonuses. 6
Candidates must be able to articulate how their experience can add value in setting the business strategy. JAPAN ORGANISATIONS LOOKING FOR ADAPTABLE & FLEXIBLE FINANCE PERSONNEL Hiring has remained robust in Senior Finance in Japan despite a rather sluggish economy, which largely shrugged off the effects of a hike in sales tax last April. Many organisations are going through a period of organisational change, IT implementations and globalisation of some functions while facing a shortage of suitably qualified local talent. There are also new compliance and regulatory challenges coming up. We are seeing more replacement headcount but contract hiring is increasing in importance in this market, says Brendan Walsh, Manager, Accounting & Finance at Morgan McKinley s Tokyo office. Employers may find it increasingly difficult to find suitably qualified bilingual talent. The talent pool is very passive in the current climate of uncertainty, says Walsh. Business partnering is the key phrase that we hear time and again from hiring organisations. Finance professionals looking to step up to a more senior role must be prepared to explain to hiring managers the value that they can add outside of the finance silo. There is an expectation that the head of finance can provide valuable input on setting the business strategy, says Walsh. At interview, it is vital that candidates demonstrate that they have done some research into the company and can clearly articulate how their experience can help it to succeed. Domain-specific accounting knowledge is also very important. For example, retail organisations want to hire people who understand how accounting practices apply specifically to the retail environment people who can hit the ground running. With many organisations facing a tough economy there is a strong focus on doing more with fewer resources. A major factor in the current Japanese employment market is the weakening yen. This is benefiting export-led companies, but many are suffering as a result of the rise in the price of imported goods and services, notably energy. 7
SALARIES & BENEFITS Salaries are now trending upwards in Japan after some years of stagnation or negative growth, but not significantly. Those changing jobs can realistically expect an increase in salary in the order of 5-10%. We don t envisage any changes to bonuses or performance-related pay, though more companies are considering sign-on bonuses as a way of getting around rigid pay ranges. 8
There is a growing expectation that Senior Finance professionals should be more hands-on. SINGAPORE WILLINGNESS TO TRAVEL INCREASINGLY IMPORTANT We currently have approximately ten well qualified Senior Finance candidates chasing every two open Senior Finance positions here in Singapore s commercial and industrial sectors, says Yanni Ma at, Manager, Accounting & Finance Morgan McKinley Singapore. The situation was somewhat better in financial services. Economic performance was relatively weak in 2014 and there is lingering uncertainty about the future, which is having an impact on recruitment decisions. Companies will sometimes go through seven or eight rounds of interview only to decide not to proceed with any external candidate or to put the role on hold, says Ma at. I would advise Senior Finance professionals to stay with their current employers until they have a confirmed job offer. Any other approach is too risky as many Senior Finance professionals have been unemployed for several months, adds Ma at. Greater internal global mobility and reorganisations are also having a negative effect, on the contract as well as permanent employment market. More and more Singaporebased companies are offshoring or outsourcing transactional finance functions, so in 2015 most senior-level opportunities will be in strategic finance, financial reporting and systems and project finance. Candidates with experience of ERP software suites, especially SAP, will have an advantage. Willingness to travel is very often an important requirement in a job specification and even if it isn t, Senior Finance professionals will often find it difficult to advance if they are not prepared to travel extensively or even relocate. This is creating frustration and dissatisfaction on both sides. Many are unable to travel extensively, while other Senior Finance people do not have strong regional experience. Moreover, with the consolidation of functions, there is a growing expectation that Senior Finance professionals should be able to be more hands-on, working with less support for long periods. Many are reluctant to work under these conditions, says Ma at. This is a new environment. While it is frustrating for some, it creates opportunities for younger candidates who are more flexible, concludes Ma at. 9
SALARIES & BENEFITS Pay increases will be very low and some working in commerce and industry will even face pay cuts. 10
Emiratisation is a major challenge. UNITED ARAB EMIRATES LENGTHY HIRING PROCESSES The United Arab Emirates is an excellent market for top candidates but these are thin on the ground, while lengthy hiring processes and political considerations are making it difficult for many candidates looking to step into a senior role. There are plenty of opportunities in Dubai but Emiratisation is a major challenge for candidates from abroad and for many hiring organisations, says Vilius Dobilaitis, Consultant at Morgan McKinley United Arab Emirates. There is an inadequate supply of local talent, so if companies are unable to fill a post with a candidate who is a native or who is already based in the UAE they will tend to look to Europe, in particular Ireland and lower cost Eastern European countries, and to Australia and South Africa. However, relocation is often a last resort and regional experience gives candidates a distinct advantage. Organisations like to promote internally if possible but there is quite a lot of movement between organisations and industries. Hiring organisations believe that a fresh pair of eyes can help solve ongoing issues, says Dobilaitis. Experience of ERP systems, in particular Oracle, SAP and Microsoft is a distinct advantage, as is fluency in a second language. SALARIES & BENEFITS Top candidates command a premium while salaries are likely to increase across the board by an average of 10% in 2015. 11
Organisations will be challenged to identify and attract top talent, with the best Senior Finance professionals being highly regarded by their current employers. UNITED KINGDOM ORGANISATIONS COMPETE FOR THE BEST SENIOR TALENT In the second half of 2014 we saw many organisations looking to bolster value add functions such as Financial Planning & Analysis, in contrast to the first half of the year, when the focus was on regulatory positions in response to pressures from the Bank of England, the Financial Conduct Authority and the Prudential Regulation Authority. Nevertheless, compliance and regulatory issues remain a strong driver of demand with the ongoing adoption of the Basel III framework. The challenge for many companies is to identify and attract top talent, with many Senior Finance professionals being highly regarded by their current employers. This means that the best people will almost certainly get a counter offer in an effort to stop them joining a competitor. Some organisations may be willing to look abroad as an alternative to the London market but visa constraints are a problem when considering candidates from outside the EU, comments Paul Jagdev, Manager, Senior Finance Recruitment, Financial Services at Morgan McKinley s London office. A number of financial services firms are looking to exit certain business areas which attract a high capital reserve, therefore making profits harder to generate. The resulting redundancies may stimulate candidate flow in 2015, although the very best individuals will be mopped up internally, perhaps before potential new employers are aware of their situation, he adds. Preparation for interviews is the key to success in this market and it is crucial that candidates for senior roles should prepare from both a technical and competency perspective. I make a point of meeting every candidate before an interview to help with how to structure the best approach to the various aspects of the interview, says Jagdev. Exposure to both IFRS and other international accounting frameworks, such as US or Japanese GAAP, are powerful assets alongside familiarity with Basel III. In addition to such technical skill-sets there is demand for individuals with strong people-management kills and the ability to network and build relationships with key stakeholders. 12
SALARIES & BENEFITS We are unlikely to see much movement in salaries at the moment. We may see the bonus buy-out culture return as hiring organisations compete against each other for top talent in 2015. 13
GLOBAL TREND REPORT SENIOR FINANCE A MORGAN McKINLEY GROUP COMPANY