Submitted by Ledgent Finance & Accounting
The finance and accounting labor market will continue to evolve in 2018: unemployment is decreasing, demand for talent is going up, availability of candidates is going down, and salaries are rising. With more open positions than available professionals, everyone is a candidate – including “passive” jobseekers. Recruiters are focused primarily on individuals who are currently employed, even if they aren’t looking. This means your employees are becoming top targets. You don’t just have to convince people to come in, you have to convince them to stay.
Salary always has and always will be a major influencer in maintaining a robust workforce.
While a 3.2% wage increase is predicted in 2018, on average employees earn a 5.2% pay increase when changing jobs (Glassdoor). Among finance and accounting professionals, salary is top of mind when seeking a new opportunity:
- Competitive wages (69%)
- Good benefits package (68%)
- Flexible work arrangements (52%)
- Opportunities for career advancement (51%)
While many employers are eager to meet the demands of new hires, they often find that pay for their current employees hasn’t risen much. Replacing an employee can cost up to 400% of their annual salary (ERE Media), so it’s prudent to do everything you can – with regard to salary and beyond – to retain your current workforce.
Pay is Up
Pay is up in 2018. Based on Consumer Price Index (CPI) data through April of this year, the consumer advocacy group estimates the cost-of-living adjustment for 2018 is predicted to be about 2.1% (Investment News). Meanwhile, inflation is forecast to slow to 2.4% and unemployment is predicted to continue its downward slope to about 4.6% (Economic Research Institute). Last year, we saw a general salary increase of about 3-5% across positions.
Among U.S. employers, salary budgets are expected to grow by 3.2% in 2018, up from a 3.1% increase in 2017 and 3.0% in 2016, according to the Economic Research Institute.
Typically, employees earn a 5.2% pay increase when changing jobs (Glassdoor). Meanwhile, 28% of active candidates currently employed expect a pay raise of 15% or more if they land a new job (Indeed). If you’re poaching candidates, the price can be even steeper. About one in three (32%) passive candidates expect a salary increase of more than 15% if approached by recruiters (Indeed).
Wages have grown just 2.5% over the past year, only slightly higher than inflation. Since 2010, nominal wages have grown about 2.5% each year, while inflation has averaged 2% (Politico). Even as the labor market has tightened, wage growth hasn’t accelerated.
The Gender Pay Gap
When adjusted for the same job title, employer and location, the gender pay gap in the U.S. falls to 5.4% (roughly 95 cents to the dollar) (Glassdoor). Any sized gap is a problem and it’s up to you to fix it. Glassdoor found that 33% of the gender pay gap is “unexplained,” which points to possible workplace gender bias (Glassdoor).
Only 20% of women are completely satisfied with the amount they earn, compared to 44% of men (Gallup). Amongst employees planning on actively seeking a new job in the next six months, 71% of women and 74% of men say their employer is taking no action to address gender inequity (Payscale).
Retention: Dollars and Sense
If your current employees have fair and competitive pay, this will have a tremendous impact on your employer brand – and will bring in top talent to stay. This retention-focused philosophy requires action:
- Do not wait for your employees to bring up salary – be proactive
- Use resources like Ledgent’s Salary Guide, Glassdoor, and SHRM to best understand competitive pay
- Keep an eye on what your competitors are paying
- Review your department budgets and adjust accordingly
- Be keenly aware of which employees are vital to the success of your company (they are top targets for your competitors)
- Practice pay transparency
- Create structured career paths with set pay ranges
Engagement should also be a top priority in the finance and accounting space. While the finance industry as a whole is on relatively middle-ground in terms of engagement (they ranked 10th of 18), engagement has been declining over the past three years. The proportion of finance employees who are hostile, disengaged, and merely contributing has risen 3.4 percentage points over the last three years (Quantum Workplace). Take a good look at what your organization offers beyond pay, including comprehensive benefits, a shared purpose, work-life balance, and meaningful recognition.
No matter what your organization’s salary situation is, you have options. But you must move forward with intent, awareness, transparency, and dedicated action.
About Ledgent Finance & Accounting
Ledgent Finance & Accounting, a Roth Staffing Company, specializes in delivering full-service finance and accounting staffing solutions and executive search. We are proud to be recognized by Inavero’s “Best of Staffing®—Client Satisfaction” and the “Best of Staffing®—Talent Satisfaction”, as well as one of Fortune’s 50 Best Small & Medium Workplaces in the U.S.