Pay Displayed

Despite the gloom reflected in the English ICA’s latest study of the prospects for accountants in the 21st century, the prevailing mood at present remains one of cautious optimism, this is according to the 1996 Qualified Accountants survey conducted by Accountancy Age and specialist financial recruitment consultancy Harrison Willis.

The joint survey, an annual event which involves more than 1200 qualified UK accountants working in public practice, commerce, industry, financial services and the public sector focuses on salary and benefits packages earned by the country’s finance professionals, as well as investigating some of the social issues influencing the accountancy profession. This year sexism and stress came under the spotlight.

Although the best rewarded newly qualifieds are now being offered starting salaries of as much as #35,000 and partners in some firms are earning figures usually associated with those appearing in Hello! magazine, our poll suggests that, for the majority of accountants, pay is relatively unimportant. Only 43% of respondents to the survey rated pay and benefits as the most important factors in their working lives and overall they were placed third after job satisfaction and security.

However, a cynic might take the view that the reason behind this fairly blase approach to earnings has been brought about by another finding of the survey – that few qualified accountants are likely to be losing sleep about how to pay their bills.

Survey results for the last three years show an undramatic but steady increase in salaries after a long period during the recession of the early 1990s when they remained stagnant or even, in many cases, dropped. Less than a fifth of those taking part in the poll had gone without a salary increase at their last review, while almost half had received an increase of between 1% and 5%. Another fifth had received an increase of between 6% and 10% and as many as one in ten had seen their earning rise by more than 10%.

While the ‘feel-good’ factor may continue to be a source of debate in the wider world, there little doubt it is making its presence felt in the accountancy profession.

85% of those questioned expected some form of salary increase next time around, although the advanced guard of the hyper-inflationists, looking for rises in excess of 10%, thankfully remained in the minority at only 7% of the total.

While basic salaries are on the increase, so is the likelihood that qualified accountants can top up their earnings with bonuses and a whole range of other perks and benefits. 61% of respondents were receiving some form of bonus payment related to profit or individual performance, up substantially from only 42% of the poll in 1995. However, reward through the bonus system still seems to be the province of those whose earnings are on the generous side already. While 65% of accountants earning basics over u40,000 were receiving bonuses, only around a quarter of those earning less than #25,000 were benefiting from these ‘top-up’ payments.

When it comes to perks and benefits the most common remains the corporate pension, enjoyed by just over three-quarters of our sample. Medical insurance is also becoming increasingly popular with some 56% of the poll.

While the company car is still well in evidence, there are signs of its decline in the face of continuing pressure from the Inland Revenue. This year only 43% of respondents were driving a company vehicle, down from 49% in 1995.

Despite the less materialistic approach that is supposed to be one of the major features of this last decade of the century, it seems there are some in the profession who still are happy to embrace the ‘greed is good’ philosophy of the 80s. One ACA from the south-east obviously felt his benefits package did not reflect his true worth and requested a long list of additions including a corporate helicopter, a Platinum Amex card, together with a substantial entertaining budget to use on and extensive overseas travel in the company of a ‘stunning blonde’. It seemed a pity, given the anonymous nature of the poll, we could not put him in contact with the ACMA, who faced with our list of possible benefits, inserted the plaintive comment, ‘Any of the above would be nice’.

In terms of earnings potential the City of London and, to a lesser extent, the whole of the South-East remain the Mecca of British accountants. In commerce, industry, financial services and even the public sector, pay is significantly higher in these areas than anywhere else in the British Isles. At the newly qualified stage an accountant in central London can expect to earn as much as #8,000 more than a contemporary based in Wales or the north of England. The differences in rewards become even more extreme in the top tier of the capital’s banks. An accountant there with up to five years’ experience can find themselves on a base that is more than double that on offer to someone at a similar level in commerce or industry in Wales or the south west, together with a benefits package including a car, subsidised mortgage, profit share and a performance related bonus of as much as 50% of salary.

Nothing else could match the example we found in the south-east where the salary packages of two accountants of similar age and level of experience were separated by a staggering #150,000 pa!

Yet despite the continuing rise in reward levels and the profession by accountants that pay is relatively unimportant, it seems that expectations may be starting to overtake actual salary levels. 38% of those taking part in the poll felt that their earnings were below the industry average, a slight increase from the 35% who expressed this view in 1995. Dissatisfaction was highest in Wales and the West Country and lowest in central London, following the pattern established in both 1994 and 1995.

Whatever your view on the justification behind the pay of accountants, it seems that the profession is having to work just as hard as everyone else these days and that the days of long lunches and afternoons on the golf course are over. According to the Harrison Willis/Accountancy Age survey, less than one in five qualified accountants work a ‘standard’ 40-hour week. Nearly half are working over 44 hours per week and around a fifth are spending as much as 50 hours a week at their desks. In the south-east, earning those high rewards appears to involve working the most hours. Four-fifths of respondents in the region were working more than 40 hours a week in comparison to only 62% in the north. Finance professionals in the North may take heart from the fact that, while they may have less money in the bank than their southern colleagues, at least they have more time to spend it!