Accounting and finance salaries are increasing by as much as 25 percent in some cases, at the same time that compensation levels are up by the most in a decade. It’s the sort of perfect storm in which even a first-year analyst might come to the table and ask for six figures.
OK, that last point is based in anecdote — just something we recently dealt with (and politely declined) — but there’s no denying that change is afoot, nor that new compensation norms will have far-reaching implications for the 2022 budget season. What hasn’t changed this year, of course, is that having the right talent in place, from top to bottom across your accounting and finance function, remains the best way to meet your strategic objectives.
With all of that in mind, it’s high time to not only dial in on emerging trends but start engaging with stakeholders about salaries, talent and hiring in connection with budget season. Four experts from Tatum — Tim Carlson, senior vice president of our national professional search group; Fran Miller, northeast regional director; Matt Barnes, regional director of professional search; and Dann Wall, national director of training and development — weigh in.
1. “use it or lose it” hiring budgets could be in jeopardy
Planning your organization’s annual investments around talent acquisition usually happens on a department-by-department process — and this year probably won’t be any different.
But there is one thing that might be, and it has to do with two facts:
- the documented increases in the average length of hiring cycles
- the ongoing shortage of qualified accounting talent nationwide
Given that context, what’s going to become of all that money you had earmarked for a new hire who, unfortunately, you just haven’t been able to find on the job market — or at least not yet?
The answer is: You’re going to lose it, unless you strategically intervene, starting now. “That’s definitely one of the new risks we’re seeing for a lot of accounting and finance hiring managers,” Fran agreed. Her advice?
“Instead of waiting around until someone asks you for your budget numbers, at which point it’s already too late, you have to be proactive about this whole process, shape the story and drive the action,” she advised. “Bear in mind, you may need to go up the chain of command, in which case it’ll help to have strong allies not only within the accounting and finance department but across other functions as well.”
She added, “Be sure to frame the request in terms of ROI, cost savings and other bottom-line outcomes. Otherwise, nobody’s listening.”
2. digital transformation is taking precedence over compensation
Gaps, misalignments and weaknesses have an unfortunate habit of emerging on accounting and finance teams each budget season. That’s why financial analysts, for example, tend to become at once hard to find and highly in demand this time of year. But the impact of new budgeting priorities might be felt far more acutely farther up the org chart, according to Tim.
“We’re seeing a lot of vacancies at executive or leadership levels right now partly because there’s so much focus on digital transformation, and compensation is more in the background,” he said.
Research confirms this is true: One Gartner survey, for example, found that 82 percent of CFOs plan to invest far more heavily in driving digital transformation than talent-related outcomes (or, for that matter, than bolstering their supply chains or developing new services).
Tim continued, “When you need to fill a really key leadership role like CEO, CFO, VP or director, setting aside the appropriate budget isn’t usually a big issue, but this year I think it could be. If that happens, sourcing interim executive leadership is going to be a very attractive option for a lot of companies. It may be the only option.”
Matt suggested another possible workaround: “For a lot of key roles right now, especially on accounting and finance teams, passive talent is the only talent that’s out there.”
81% of CFOs plan to invest more heavily in digital transformation than talent-related outcomes.
3. new candidate expectations need to be accounted for (literally)
Even as salaries are skyrocketing for skilled professionals across the board, there’s a very real risk that today’s most in-demand candidates, especially those who work at the executive level, won’t sign on the dotted line. At least, that is, until you sweeten the deal with a sign-on bonus.
“Sign-on bonuses have suddenly become both incredibly important and incredibly prevalent,” Dann pointed out. “What was previously only seen at the executive or management level is now the new norm across all competitive positions in finance & accounting, even at the staff level, and this has happened literally overnight.”
So unless you’re willing to risk losing out on top talent, sign-on bonuses should probably be a line item on your budget — but this might prove contentious come budget season. After all, while the majority of companies plan to upwardly-adjust compensation offerings in response to inflation, does that also mean they’re going to factor sign-on bonuses into the calculation?
That much remains to be seen.
4. tap external resources for valuable institutional knowledge
If your in-house accounting and finance team looks like it’s about to get pummeled during budget season, you should at least be aware that there’s a better way.
When it comes to delivering results on tight timelines, after all, few things matter so much as institutional knowledge — the kind of industry expertise that’s only built through experience, the kind you might not have on your current team.
“When we place accounting and finance resources,” Fran explained, “experience is a big part of the value they bring to the table, because they’ve had the benefit of seeing how other companies operate. They know and recognize best practices. They know how things should get done.”
Which can be a game-changer for accounting and finance teams struggling just to stay afloat during a busy budget season.
“We’re constantly moving these external resources from project to project,” Matt added. “As a result, they have this unique level of industry and institutional knowledge that you might not have internally, and they bring it to every engagement.”
Balancing competing priorities and handling interdepartmental disagreements while also effectively advocating on behalf of your own hiring needs is a major challenge, by any standard — especially if you’re understaffed. That’s why, in light of the ongoing shortage of qualified accounting and finance professionals from coast to coast, many organizations are actively rethinking their hiring requirements right now in advance of the 2022 budget season.
That’s one approach, of course, but Tatum has a better one — and it’s also much easier. Whether you need help assessing your budget, launching projects or sourcing on-demand accounting and finance talent, we can deliver the best executive and professional talent for your organization. Get in touch with us today to learn more.