2015GLOBAL TREND REPORT CORE FINANCE

2015 | OUTLOOK

AN IMPROVING BUT CHALLENGING GLOBAL RECRUITMENT MARKET

• In Australia, the market continues to improve and in some instances excellent candidates will receive multiple offers

• In Mainland China and Hong Kong we have seen no discernible change compared with H1, with the focus on replacement headcount

• Ireland is currently the market most favourable to Core Finance professionals, with much of the demand coming from indigenous companies and SMEs

• The situation is improving for Core Finance professionals in Japan, but hiring organisations will tend to hold out for the perfect candidate

• Singapore is probably the toughest market – job applicants are having to lower their expectations in many cases

• In the United Arab Emirates there is significant movement at senior levels, with a growing preference for locally based candidates

• Companies are recruiting new headcount in the United Kingdom, though not as aggressively as in H1 2014

• In general there is a demand for candidates who offer a broad range of skills including fluency in a second language or familiarity with ERP projects

• Ability to “partner with the business” is often a requirement as roles become more commercial and hybrid

In line with our commitment to keep professionals working in Core 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. Overall the global market has continued to improve in line with our report at the end of the first half of the year, though in some countries it remains challenging for professionals seeking a new role. Growth in salaries will be moderate and candidates will need to stand out if they are to be successful. In particular, many organisations are looking for Core Finance professionals who can demonstrate quantified results in adding value to their employers.

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QUICK LINKS

AUSTRALIA .............................................. 2MAINLAND CHINA ...............................4HONG KONG ......................................... 6IRELAND .................................................. 7JAPAN ....................................................... 9SINGAPORE ...........................................11UNITED ARAB EMIRATES .................. 13UNITED KINGDOM ............................. 15

The market is showing definite signs of picking up in Australia, but for Core Finance it is still running at two speeds. Professionals below management level are now at times receiving multiple offers, whereas at senior levels new opportunities remain scarce. The contract market is particularly buoyant. This mixed picture reflects continuing economic uncertainty. IT changes such as the implementation of ERP systems, organisational changes and compliance and regulatory issues are among the main drivers of increased recruitment, which is focused on roles in Strategic Finance, Financial Accounting & Reporting and Systems & Project Finance.

To be successful in the current market, an accounting qualification is a given; candidates now need to bring more to the table. This can come in the form of additional qualifications (such as an MBA) or broader experience. Experience in demand includes

project management, process improvement, commercial finance or exposure to a particular ERP software suite.

Foreign languages and experience abroad have become increasingly useful. For example, as more Chinese companies are setting up subsidiaries in Australia, Mandarin may be required.

“The current market is offering extensive opportunities for Core Finance professionals early on in their career. Most organisations focus on promoting internally; therefore external hiring is commonly at the accountant or analyst level. Employers with a track record of promoting from within and rotating their people through a variety of roles to increase their experience are setting themselves apart to attract the best talent,” says Matt Jacobs, Associate Director, Finance & IT with Morgan McKinley Australia.

Organisations are evolving rapidly in Australia and companies are looking for people who can add more value than in the past, for example through business partnering and strategic thinking, and the ability to communicate effectively with stakeholders across non-finance functions such as marketing, sales and operations. ERP system upgrades and business intelligence system projects are growing in importance as businesses seek to stay competitive. Increasing efficiency and reducing costs over the long term are also essential.

“Although the market is improving it is still highly competitive. Candidates who do not perform well at a first interview will rarely get a second chance,” says Jacobs.

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Employers with a track record of promoting from within and rotating their people through a variety of roles to increase their experience are attracting the best talent.

IMPROVING SITUATION FOR JUNIOR LEVEL CORE FINANCE PROFESSIONALS

AUSTRALIA

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SALARIES & BENEFITS

Salary increases will be modest, probably in the order of 0-5%. Bonuses are more common in finance remuneration packages than in the past. However, actual payments received vary a great deal between organisations so it is worth investigating the success rate of bonus payments beforehand.

Growth rates have slowed in Mainland China and there is some economic uncertainty. We saw little discernible change to the recruitment market in Core Finance in H2 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), Senior Finance (CFO/Finance Director) and Transactional (Accounts Payable, Accounts Receivable, Record to Report and Order to Cash) roles.

In addition to professional accounting qualifications such as ACA and CIMA,

fluency in a foreign language is likely to be the best qualification for landing a job at a multinational or internationally active company (though for this reason many Core Finance professionals may prefer to apply or roles at domestically focused companies).

“Core 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.

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Companies are looking for candidates who can demonstrate that they add value to the organisation.

A TOUGHER ENVIRONMENT FOR CORE FINANCE PROFESSIONALS

MAINLAND CHINA

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SALARIES & BENEFITS

We expect to see merit increases of around 8% rather less than Core Finance employees might have expected in recent years.

Over the past six months many multinational companies in Hong Kong have seen some restrictions put in place on new headcount for Core Finance functions, so the overall situation is largely unchanged, with the focus on replacement staff. Globalisation of some functions has been an important factor, as have continuing economic uncertainty and organisational change. Compliance issues have been a driver of some new recruitment.

“Hiring organisations have raised their expectations and will look for the perfect fit, and with the supply of candidates exceeding demand, many Core Finance professionals face a competitive environment,” comments Jacky Cheung, Manager at Morgan McKinley Hong Kong. Salary expectations are often higher than companies are ready to offer.

“Many multinational companies are restructuring to define a more specific regional scope, for example between north and south Asia rather than APAC as a whole, and this will have an impact on recruitment in Hong Kong,” he adds. The focus of recruitment has been on Strategic Finance, Financial Accounting & Reporting and Systems & Project Finance, and we expect this trend to continue.

However there has been some movement in the market as companies increasingly prefer to attract new talent from outside the organisation for Core Finance positions. The contract market is currently stable.

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Core Finance professionals face a competitive environment.

REGIONAL REORGANISATIONS IMPACTING RECRUITMENT

HONG KONG

SALARIES & BENEFITS

Salaries are likely to increase but only modestly, probably around 5%. Bonuses depend on company performance within the region and are likely to be less than hoped for in the retail sector as the shopping habits in Mainland China have not been as expected.

In Ireland the economic upswing is making an impact on the Core Finance recruitment market, with companies increasing headcount. “Recruitment within SMEs and indigenous businesses has been notably strong, with compliance and globalisation of functions key reasons for recruitment into the larger organisations,” comments Mary Mullin, Division Manager (Accounting & Finance) at our Dublin office. IT implementations and organisational change have been further factors driving growth in this market in the second half of 2014.

Newly qualified accountants coming out of the Big 4 are in high demand. The market is more competitive for candidates at the senior end but we expect to see this change in 2015 as

organisations build up their teams in response to business growth. We are already seeing some organisations repatriating Core Finance functions that were outsourced during the lean years. Many companies have kicked off new system implementations to be in a better position to handle growth. “Overall, the market was more positive in H2 2014 than at any time since the recession,” says Mullin.

“There are plenty of opportunities out there so I would advise Core Finance professionals to take their time and do their research. Work out what type of role you want and in what sector. Then make a target list of companies and network within the right circles.” While professional accounting qualifications and knowledge of IFRS remain vitally important, candidates who have

other strings to their bows will land the best jobs. Fluency in a second language is often a deciding factor, as is ERP experience. Knowledge of SAP and/or Oracle is increasingly important for Core Finance professionals looking for roles in larger organisations and MS Navision in SMEs.

Market conditions will become more competitive for hiring organisations, but many will have the increased budgets that are required to attract high calibre talent. “We’re advising clients to accelerate their hiring processes to avoid missing out,” says Mullin. Finance professionals who can demonstrate commercial awareness and theability to partner with the business will be snapped up quickly.

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Overall, the market was more positive in H2 2014 than at any time since the recession.

STRONG BACK-HIRING AMONG IRISH BUSINESSES

IRELAND

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SALARIES & BENEFITS

We expect to see salaries increasing by about 5% on average in 2014 but Core Finance professionals who offer in-demand skills may expect considerably more when moving into new roles.

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Hiring times and interview processes are getting longer.

We have witnessed some interesting changes in recruitment patterns in Japan as many companies 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. “There is greater focus on managerial accounting and business finance, with mainstream accounting increasingly covered by contract hires and offshoring,”

he adds. “Adaptability and flexibility are the key words.”

Consequently Core Finance professionals who are looking to get ahead should, Walsh argues, “Develop a business partnering mind-set and show that they can engage with the business and manage stakeholder relationships.” It is still very much a buyer’s market and hiring organisations are looking to back-fill roles with candidates who are more skilled and who can take on more responsibility. “Hiring times and interview processes are getting longer as clients often prefer to leave a position unfilled rather than close it with someone who does not tick all the boxes,” says Walsh.

As is generally true in Japan, there is a lack of suitably qualified candidates with the language skills needed, a challenge that will persist for the foreseeable future. As finance becomes more specialised, candidates will need to be suitably qualified, with exposure to IFRS/US GAAP particularly important. On the IT front, exposure to SAP is becoming more and more important.

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.

ORGANISATIONS LOOKING FOR ADAPTABLE & FLEXIBLE FINANCE PERSONNEL

JAPAN

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SALARIES & BENEFITS

Salaries are now trending upwards in Japan after some years of stagnation or negative growth, but not significantly. We don’t envisage any changes to bonuses or performance-related pay.

It’s a mixed picture in Singapore but overall the Core Finance recruitment market seems to have worsened in 2014. As a whole, employers are looking for experienced finance professionals who are willing to roll up their sleeves and take on a range of tasks but few are happyto stay in such roles for any length of time. At the other end of the spectrum line managers’ expectations of junior staff have been increasing. They are looking for future potential leaders and are not afraid to wait for the right candidate, even though the supply of junior candidates who meet all of their criteria is rather limited. “I used to be able to close a junior role within a week, but now it can take two or three months,” says Yanni Ma’at, Manager, Accounting & Finance Morgan McKinley Singapore.

Strategic Finance, Financial Accounting & Reporting and Transactional Finance (AP, AR, RTR and OTC) are the main growth areas. “Overall, there is adequate local supply to meet the demand. But expectations are not always aligned, with Singapore-based candidates often wanting a better work-life balance or higher salary than candidates from overseas are prepared to accept,” says Ma’at.

“My advice is to stay in your current role while looking for a new one. Even if you face losing your job because of a company restructuring, it is often best to stay until your last day as this shows commitment and your current employer will give you an excellent testimonial for this. When looking for a new role in the current climate, you should be

selective when considering prospective employers, but be realistic about terms and conditions of employment. For example, if you are looking for a role with international exposure, a willingness to travel is going to be part of the deal!” says Ma’at.

When assessing candidates for a Core Finance position, employers in Singapore often set greater value on MBAs or similar graduate qualifications and hands-on experience, especially in ERP systems, rather than professional account qualifications such as ACA and CIMA.

It’s likely to remain a tough environment. “Candidates sometimes go through five rounds of interviews only for the position to be frozen or filled internally,” says Ma’at.

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Expectations of junior staff have been increasing.

WAITING FOR THE RIGHT CANDIDATE

SINGAPORE

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SALARIES & BENEFITS

Salaries are currently increasing at an annual rate of 5-12%.

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Regional experience gives candidates a distinct advantage.

UNITED ARAB EMIRATES

The Core Finance employment market sawlittle change going into the second half of 2014, apart from at the senior levels, where there has been significant movement particularly around financial strategy and commercial reporting roles, as several large organisations have focused on the underlying drivers in their business activities across the region. The economic upswing is making an impact and companies have emerged from a period of retrenchment and are reviewing their operating models to capitalise on the improving market conditions.

That said, political considerations have meant that the improvement has been much more subdued than one would have expected in the Gulf Cooperation Council (GCC) countries. “Conflicts in Israel, Syria and Iraq have tempered

the ambitions of multinationals operating in the GCC. However, locally based companies, which have a better understanding of the region’s dynamics and are often better funded, have capitalised on the gaps left by their multinational competitors. They are snapping up the most talented professionals,” says Trefor Murphy, Managing Director, Morgan McKinley MENA.

Companies in the UAE now prefer to recruit local talent. “There is adequate local supply so relocation is a last resort. Regional experience gives candidates a distinct advantage,” says Murphy. “However, 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.”

A professional accounting qualification is absolutely essential for mid-level roles upwards. The “qualified by experience” concept is a thing of the past. To raise their profile further, however, Core Finance specialists are advised to get active on social media, attend relevant professional events and take part in continuous professional development courses. “The number of applications that employers and recruiters receive for vacancies runs into the hundreds so candidates really need to stand out,” says Murphy. Nevertheless, employers should not rest on their laurels. “Hiring organisations must also keep up with the changes in the marketplace if they wish to secure top talent.”

PREFERENCE FOR LOCAL TALENT

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SALARIES & BENEFITS

We don’t expect significant increases in salaries in the UAE and they will not keep pace with the cost of housing. Given the extensive supply of candidates, GCC companies are not under huge pressure to meet current expectations.

There is clearly greater confidence in the UK market and greater movement. However, this is generally replacement rather than new headcount. Even where businesses say they are recruiting for “new roles” they are often simply getting their teams back to where they were a few years previously after holding back for some time. Roles that are in demand include Strategic Finance, Financial Accounting and Reporting and Systems & Project Finance. Technical accounting has, however, been the main focus of hiring as a result of IFRS changes coming into force in 2015. Many London-based employers in particular are going through a period of organisational change. This may include the globalisation of some Core Finance functions.

In some areas there is a lack of qualified talent and for many employers UK experience is a must so recruitment from overseas is not a solution.

Despite the improving situation, many companies still have cost saving measures, including pay and recruitment freezes, in place. Where possible, companies in this situation prefer to recruit internally for Core Finance positions and will often try to recruit directly, although this could mean missing out on the best talent.

One noticeable change in recent months is that there is a more consistent flow of new roles, without the peaks and troughs shown in H1 2014. Companies are recruiting more than in previous years, but they are not hiring as aggressively as they were early in 2014, with many roles being cancelled as hiring departments come under pressure to be cautious with regard to new full time headcount.

The contract market remains stable.

“Market confidence will see more people wanting to consider their options. My advice to Core Finance professionals looking to get ahead is to focus on

gaining quantifiable experience. When applying for that next role you really need to be in a position to demonstrate value,” says Ashley Crich, Recruitment Consultant, Finance, Commerce & Industry at Morgan McKinley’s London Office. Stephen Tarrant, Associate Director, Home Counties advises Core Finance professionals to “Spend as much time as possible working for multinational, branded businesses. Exposure to ‘world class finance’ will stand you in good stead for the future.”

We have also noticed a change in the type of qualifications that our clients are looking for. In the early 2000s, clients wanted Core Finance professionals with ACA from practice. During the recession, this changed – clients were keener on CIMA candidates, who required less training and support. This has now shifted back, with hiring organisations looking for ACAs who may have less relevant experience but are perceived as having greater potential.

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When applying for that next role you really need to be in a position to demonstrate value.

MARKET STABILISING AFTER AGGRESSIVE RECRUITMENT IN H1 2014

UNITED KINGDOM

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SALARIES & BENEFITS

With the market improving, hiring organisations will find candidates raising their expectations on pay, especially as they have experienced several years of pay restraint. Candidates are focused on base pay and are less motivated by promises of bonuses than in the past. “Companies will also have to move quickly or risk losing talent to other businesses,” advises Crich.

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GLOBAL TREND REPORT CORE FINANCE

2015