Recruitment Market Trends

Summer 2010
Accounting & Finance Recruitment
Australia
Introduction

2009 proved to be a challenging year for employers, employees and recruiters

alike, with local economic conditions being defined by a global financial crisis
and a large degree of caution about the future.

The employment market, always the first to be hit by economic downturns,

took some real blows in the first six months of the year, with companies
battening down the hatches for what many commentators believed was going
to be a stormy year ahead.

As 2009 draws to a close however, there are a number of signs that the worst
of the storm clouds may have passed us by. The financial markets are bouncing
back with unrestrained enthusiasm, business confidence is booming and the
unemployment rate continues to decline – all positive indicators for
employment market prospects in 2010.

For employees, this is undoubtedly good news. For those currently looking for
work, the expanding economy represents an opportunity to re-enter the
workforce under favourable terms. For those already working, an increasing
number of positions will allow employees to turn their attention from job
security, back to career development (not to mention the opportunities for
improved remuneration).

Whilst employers welcome the improving market conditions, they will also need
to be prepared for the recruitment and retention challenges ahead. Companies
who react slowly to the change in conditions are in danger of losing key
personnel, and those who intend to win the war for talent that is currently
brewing will need to analyse all aspects of their recruitment strategies to
ensure they are capable of competing in an increasingly aggressive
marketplace.

In such an environment, the value of working with a trusted recruitment

adviser has never been more apparent. Changes in market conditions will bring
both challenges to face, and opportunities to explore.

At Ambition, we’re looking forward to meeting them both.

Gavin Houchell
Managing Director, Ambition Finance

Ambition Market Trends Summer 2010 | 2

Contents

Introduction ....................................................................................................................... 2
Economic Overview .......................................................................................................... 4
Ambition Accounting Jobs Index ................................................................................. 5
Demand Factors - What’s Happening Now?.............................................................. 6
Ch-Ch-Changes .......................................................................................................... 6
Still an Employers Market - for now ................................................................... 6
A Focus on Internal Skilling ................................................................................... 6
Opportunities for External Up-Grades ............................................................... 7
A Surprisingly Active CFO Market ........................................................................ 7
Strong Demand for Management Accountants - and others ..................... 8
Temporary and Contract Roles on the Up ......................................................... 8
Sector Notes ................................................................................................................ 8
Supply Factors – What’s Happening Now? ............................................................. 10
Still Plenty of Accountants Looking for Work ...............................................10
Aspirational Fluidity ...............................................................................................10
Lowered Salary Levels = Increase Risk of Flight ............................................10
Bonuses, STI’s and LTI’s ..........................................................................................11
An Attractive Employment Destination ...........................................................11
Future Trends .................................................................................................................. 12
The Oncoming Challenge of Retention ............................................................12
The Need to Refresh the Employer Brand .......................................................12
Speed Will Kill...........................................................................................................12
More Information .......................................................................................................... 13
About Ambition.............................................................................................................. 13

Ambition Market Trends Summer 2010 | 3

Economic Overview

Whilst there can be little doubt that the Global Financial Crisis had a strong
negative impact throughout the last twelve months, early indicators suggest
that Australia may have come through the worst of the crisis in comparatively
good shape.

The resiliency of the Chinese economy and their demand for Australian
resources, along with aggressive fiscal and monetary policy by the Federal
Government combined to limit the damage witnessed in other parts of the
world, as the global economy constricted rapidly in response to deflating
financial markets.

That’s not to say Australia has come through the crisis unscathed, with many
sectors of the employment market feeling the brunt of declining business
optimism, plummeting company profits and in many cases, a negative flow on
effect from overseas head offices that were suddenly hemorrhaging cash.

February 2009 saw historically low levels of confidence in the Australian

business community, as the effects of a global recession began to hit home.
March saw record lows at the ASX, with the value of shares being slashed some
3000 points from the previous year – reducing the value of Australian
companies across the board. With share prices in free fall, and business
confidence in decline, companies began the hard work of reducing their
business expenses, leading to significant increases in the jobless rate.

Unemployment hit a high of 5.8% in September 2009, an increase of 1.7% on

the previous year, and currently sits at 5.7%. This rate was at one point tipped
to reach as high as 9% by some commentators and the Federal Government’s
Budget forecast suggested that rates around 8.5% were probably to be
expected.

But over the last few months the Australian economy has bounced back, as
international policy initiatives have begun to take hold and the global recession
comes to an end. Whilst there probably can’t be any real confidence about a
recovery until US housing prices level out, many international organisations are
revising their global growth forecasts up – particularly in the emerging Asian
economies.

This, combined with the strength of the Aussie Dollar and our comparative
advantage in the export of primary products has left Australia in a relatively
strong global position - and as the service sector returns to the business of
profit and growth behind increasing corporate confidence, there are
encouraging signs for a return to a progressive and expanding employment
market over the next twelve months.

Ambition Market Trends Summer 2010 | 4

 Ambition Accounting Jobs Index

As evidenced in Ambition’s Accounting Jobs Index, 2009 has been a difficult

period for the Accounting employment market, with year on year growth down
across the board, and a steady decline throughout the first six months of the
year (the index began at 100 in May 2003).

Obviously this reduction reflects the economic conditions both locally and
across the globe, with demand in most sectors declining, and business
confidence slumping.

Over the last few months though, we can see the first few, tentative signs that
conditions have changed. The declining rate experienced in the first two
quarters has halted, and appears to be heading back in the right direction,
moving from a low of 164 in August, with positive monthly results over the last
three surveys - an excellent sign that after a year of turmoil and setbacks, the
market is finally turning the corner.

450
400 389 388 396 375 381 378
348 354
350 338 312
300 292
2008
250 233 251
215 2009
197 186
200 184 164 185 172 173
163 171
150
100
50

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Ambition Market Trends Summer 2010 | 5

Demand Factors - What’s Happening Now?

Ch-Ch-Changes…

The last nine months have seen a sustained period of corporate re-shaping, as
companies worried by declining financial conditions have acted to ensure their
businesses were as lean and efficient as they can be.

Whilst there have been some cases of wholesale redundancies, the process has
generally been conducted on a much smaller scale. Employers have tended to
focus on specific headcount redundancies, refining their teams in strategic
areas with a trend toward eliminating non-core business roles.

Companies who may have been in a position where a number of staff had
negotiated inflated salaries during the previous period of employee scarcity
also used this opportunity to balance the books, achieving the twin aims of
market correction and payroll minimisation with the one move.

Still an Employers Market…for now

The “flight to quality” continues at the end of 2009, with demand for
accountants still being out-stripped by supply, and employers continuing to
enjoy favourable market conditions.

Whilst we are beginning to see signs of that dynamic shifting, right now
employers remain selective in their demands for high quality staff, with an
“exact fit” approach. This is a complete reversal from 12-18 months ago, when
demand for accountants substantially exceeded supply, and employers were
often forced to be flexible in their wish list for a prospective candidate.

As the market picks up however, the employer’s relative position of strength

over the employee will begin to dissipate. Already we are witnessing shifts in
employment strategies, as companies begin to consider not only how they are
going to secure the best possible candidates, but how they are going to retain
those candidates over an extended period of time.

After all, what is the point of attracting top level employees if you are unable
to retain them when the market turns around?

A Focus on Internal Skilling

With hiring freezes and limited resources, companies have been faced with
limited options in order to achieve their business goals with a constricted
workforce.

One option however, has been to focus on up-skilling or cross-skilling current

employees – and plenty of companies have done just that. Where as previously
accountants may have had one main area of expertise or they became more
‘specialist’, many found themselves working across a number of different fields.
Necessity is the mother of creativity, and with limited resources a number of
employers got inventive with job descriptions.

Working in a number of areas (or doing the work of a number of people –

depending on who you ask) creates different dynamics; the risk of lowering
employee morale or increasing the burnout rate in the short term, but on the

Ambition Market Trends Summer 2010 | 6

flipside, the opportunity to develop new skills and gain a deeper business
acumen.

As the market turns around, many employers may discover that this will be a
double edge sword - and that by broadening their employees’ range of skills
they have created a problem for themselves. Employees, buoyed by their ability
to handle several roles in challenging economic conditions look to gauge the
value of their new found skills on the open market or the prospect of returning
to roles post economic downturn.

Opportunities for External Up-Grades

Many employers have taken advantage of the favourable employment market

conditions to upgrade the quality of their finance team at a much reduced
price.

With salary reductions of up to 10-20% being quite common, and reductions

of up to 30% not being unheard of, some employers were able to inject their
teams with substantial skills and significant experience at a cost that would
have been impossible just twelve months before.

In the long term of course, the question will be whether or not these employees
will stay with a business at their reduced rate once the market turns around. In
the short term however, the advantages for employers who are enjoying top
level talent and bargain basement prices are clear.

A Surprisingly Active CFO Market

The senior finance recruitment market has had a degree over activity, partly
driven by the fact that boards and CEO’s have had to turn to their CFO to steer
them through a very challenging twelve months – which has resulted in a fair
degree of changing of the guard.

Accordingly, opportunities have arisen for replacing, upgrading or downgrading

(in situations where companies were looking for cheaper solutions) CFO’s - with
a mandate to guide companies through substantive financial turmoil. In many
of these cases the market turned to a voice of experience, and a degree of
maturity and finance operational experience has been sought after.

There’s no substitute for experience, as they say, and throughout the last six
months the market has generally tended to agree.

Having said that, the market sentiment today has increased dramatically from
the previous six months, and organisations are now beginning to talk seriously
about succession planning, as well as talent attraction and retention.
Candidates in this space who possess great technical, communication and
leadership talents, specifically with appropriate operational skills within a given
sector have the opportunity to flourish as the market rebounds.

Strong Demand for Management Accountants…and others

In recent years demand has been strong for technical accountants –

particularly those with a love of standards. In these less buoyant economic
times however, we have seen a drive toward Management Accountants –
including analysts and performance reporting professionals, as companies look
at ways to reduce their cost and improve their revenue streams.

Ambition Market Trends Summer 2010 | 7

In many situations, these new hires came with a mandate to reduce staffing
levels, so Management Accountants with sound communication and people
leadership skills, who were able to make structural changes without causing
undue panic and hostility within the workplace have been at a premium.

Risk professionals have remained in great demand – no longer seen merely as

advocates for better corporate governance, they have become important
strategic resources to many businesses as they seek to proactively prepare
against worst case scenario situations. As the globe focuses on compliance and
regulation frameworks and prepares to introduce new standards, the demand
for these professionals will continue in the upcoming years.

At the lower levels plenty of opportunities have existed for high quality
accounts, credit control and payroll staff, a direct reflection of the skills
shortage that market sector has experienced in recent years.

In recent months we’ve also seen a slight increase in project accounting roles,
an indication that perhaps the focus has started to shift from cash
management and cost control, into growth related opportunities.

Temporary and Contract Roles on the Up

Whilst not yet at the levels that would illustrate a definitive trend, over the last
few months we have witnessed an increase in the number of temporary
assignments going to market, as companies take the first tentative steps toward
re-stocking their depleted staffing levels with new talent.

Similarly, there has been an increase in fixed term contract offerings –

arrangements that not only reduce a candidate’s flight risk in the short term,
but also provide a company with a way to get around full time employment
headcount freezes that have been applied at a national or international level.

With temporary and contract roles considered to be lead indicators of

employment market trends, both the increase in temporary assignments, and a
gradual trend toward temp-to-perm offerings can be considered very positive
signs.

Sector Notes

Retail Banking Strength

The Australian retail banking market has shown genuine robustness in difficult
economic conditions, outperforming a number of international competitors
who struggled to remain buoyant throughout the global economic crisis.
Comparatively strong profits and well developed retail bases make this sector
one of the best candidates to experience real growth over the next twelve
months, as well positioned banks take advantage of their strong capitalization
to acquire new income streams in service delivery and wealth management
fields.

This expected period of consolidation should in turn provide plenty of

opportunities for savvy financial and management accountants, as well as
analysts with skills and experience in both corporate acquisition, banking
process and of course business integration.

Ambition Market Trends Summer 2010 | 8

Mining and Commodities Activity
Underpinned by the relative strength of the Chinese economy, and the
subsequent ongoing demand for resources, the mining and commodities sector
has been another shining light throughout the recent tough economic times.
Accordingly, demand for accountants at all levels of the market has remained
strong, with many senior management and financial accountants moving across
from other industries to enjoy the comparative job security this sector has to
offer.

Other Areas of Interest

Sectors with relatively stable demand, such as FMCG companies involved in
staple goods (pharmaceuticals, food and beverages), along with utilities, health,
education and certain government sectors all remained comparatively buoyant
over the last twelve months, with deteriorating economic conditions doing
little to alter their basic business model.

Other areas, such as the retail sector, property and the media and leisure
industries suffered significant setbacks, particularly the SMEs or highly
leveraged businesses. A number of investment banks also took a hit during this
period, particularly those with international parent companies that were
exposed to worse conditions than those experienced by their local counterparts.
Similarly, funds management companies have typically contracted – a direct
response to declining profit margins and disappointing returns.

Ambition Market Trends Summer 2010 | 9

Supply Factors – What’s Happening Now?

Still Plenty of Accountants looking for work

Despite improving market conditions, there remains a large number of

accounting professionals still actively looking for work. As we discussed in our
last Market Trends Report, there appears to be two classes of job seekers out
there: those looking because they “have to” and those looking because they
“want to”.

For those who “have to” be looking for work, it remains a difficult period, with
employers retaining a fair degree of caution and questioning the reasoning
behind their current circumstances. Many employers may still want to know
reasons behind redundancies, and those without strong explanations behind
extended periods of unemployment may face difficulties returning to the
workforce.

With a strong degree of competition existing in the marketplace, particularly

amongst the $65-$100k space, where candidates with only a few years of post
qualified experience haven’t created enough marketability in their profile, the
need for a well devised employment strategy is critical. Knowing your
weaknesses, marketing your strengths and providing employers with a
compelling personal case could make all the difference in your job search.

In relation to those who “want to” be looking for work, we are beginning to see
what could be some changes in the passive recruitment market. Previously risk
averse job seekers are finally growing comfortable with entering the job market
and are likely to experience counter offers or numerous offers once momentum
returns.

Aspirational Fluidity

Over the last twelve months employers have enjoyed a relative position of
strength in the ongoing battle to retain talent. With market conditions
generally poor, and a fair degree of insecurity about the economy itself, many
employees have decided it would be wiser to remain safe in their current roles
than it would be test their employment prospects on the open market.

That may be about to change.

With generally improving conditions and growing confidence about the

direction of the economy, many employees are beginning to once again gauge
the market for job opportunities. The aspirational fluidity that traditionally
drives a significant portion of the recruitment market has disappeared in these
current market conditions, but over the last few months we have noticed a
significant increase in the amount of passive job seekers – a clear sign of
growing confidence in the employment market.

Lowered Salary Levels = Increase Risk of Flight

Similarly, with confidence in the market growing, we are receiving a lot of

anecdotal evidence that widespread dissatisfaction with current salary levels
may not be too far around the corner.

Ambition Market Trends Summer 2010 | 10

During the height of the financial crisis, a number of employers experienced
growing confidence that they would be able to get their chosen candidate at
the right price. With job security at a premium, candidates were happy to take
significant reductions in salary – declines of 10% would have been experienced
pretty much across the board, but in certain market segments we have seen
candidates taking salary decreases as high as 30%.

Whilst employers have reaped the rewards of this situation, there is a real risk
in many quarters that employees will proactively look to improve their financial
situation – either internally or externally. Some employers are taking steps now
to ensure they don’t have to look too hard.

Bonuses, STI’s and LTI’s

The drive by many organisations to rein in costs in recent months has seen
some constrictive limitations placed on bonus payments to employees, but
there have also been some opportunities to maximize value for those who
received a component of their bonus in share based incentives. The lowered
value of share prices across the board, along with the expected share price
bounce back (much of which we have already seen) has made shares given to
staff during the last year particularly valuable. Staff who were lucky enough to
be awarded shares at deflated prices throughout the year are in many cases
already reaping the rewards.

One area that has been a hot topic of debate in recent times has been the
reworking of Long Term Incentive programs for Executive teams. In many
companies we have seen employers seeking to more effectively structure their
LTI schemes, so that the rewards not only reflect appreciation for the previous
year’s performance, but also serve as a retention mechanism in the upcoming
business year. By tying bonus payments to continued service within a company,
employers are able to decrease the risk of flight for key personnel.

An Attractive Employment Destination

The relative strength of the Australian economy, combined with an impressively

robust Aussie dollar has combined to make Australia an attractive employment
destination for overseas travellers.

As for Australians looking to return home, we have seen a steady increase in

the number of returnees over the last twelve months, however not the quite
the stampede that many commentators predicted. The decline in international
conditions seemed to encourage some expats to return, however the strong
Aussie dollar seemed to hold the masses back, as they waited either for
international conditions to pick up, or to get more bang for their buck when
sending their money home.

In addition to that, the aforementioned economic stability and strong Aussie

dollar (not to mention some pretty significant environmental and lifestyle
factors) continue to make Australia an attractive destination for young, skilled,
newly qualified accountants – particularly from the UK.

With many companies turning toward the contracting market to cover existing
shortfalls in their staffing levels, opportunities for overseas accountants in this
space look set to continue over the next six months.

Ambition Market Trends Summer 2010 | 11

Future Trends

The Oncoming Challenge of Retention

With the prospect of increased activity in the Accounting market, and a

possible return to the war for talent that ensued prior to the onset of the
global financial crisis, many companies are starting to move away from damage
control and into planning for potential growth. Key amongst this agenda is
identification and retention of key employees – whether that is for the
purposes of ongoing business efficiency, or to develop a workable succession
plan for the future.

Accordingly, staff retention promises to be a key challenge for businesses

during the coming year. Savvy companies are already taking steps to ensure
that their best talent is retained within the business unit, dealing proactively
with staff dissatisfaction issues in an attempt to ensure that the current trickle
of employees seeking new positions does not turn into a flood.

The Need to Refresh the Employer Brand

Whilst some organisations are less concerned about their employment brand in
this candidate rich market, they face the real danger of tarnishing their brand
now through poor recruitment practice, which will inhibit their ability to
attract talent when the market recovers.

We are experiencing adverse feedback from many candidates that they are not
being managed very well through the recruitment process by companies either
through on site career portals or overworked line or human resource managers.

It is in this area that the benefits of working with a trusted adviser, like a
professional recruitment agency begin to emerge. Strong lines of
communication between HR professionals, proactive recruitment agents and
the candidates themselves can do much to minimise the damage caused to an
employer brand through what can be sometimes necessarily difficult
recruitment processes.

Speed Will Kill

During periods of economic difficulty, companies tend to adopt a more

conservative approach toward their recruitment processes. More time is spent
weighing the genuine need for new staff. More people become involved in the
sign off process. More time is spent analysing a candidate’s suitability, and
comparing that suitability with a large number of other potential employees.
Accordingly, more time is taken to hire new staff, and the recruitment cycle
becomes that much slower. Assignments that used to be done in one to two
weeks can now take four to six weeks, as employers become more hesitant in
their hiring decisions.

Already we are seeing examples of companies who have been unable to adjust
the speed of their recruitment processes being outmanoeuvred by competitors
who have adapted more quickly to the changing market conditions. As the
demand for accountants begins to increase, the need for recruitment processes
to be flexible and efficient will also become important.

Ambition Market Trends Summer 2010 | 12

Careers Recruitment and Contracting
Accounting, Finance and Technology

Sydney AccountAbility - Sydney

Level 5, 55 Clarence Street Level 5, 55 Clarence Street
Sydney, NSW 2000 Sydney, NSW 2000
Tel (02) 9249 5000 Tel (02) 8296 5300

Melbourne AccountAbility - Melbourne

Level 36, 140 William Street Level 36, 140 William Street
Melbourne, VIC 3000 Melbourne, VIC 3000
Tel (03) 8629 1000 Tel (03) 8629 1300

Parramatta AccountAbility - Kogarah

Level 4, 3 Horwood Place Suite 2, 684 Princes Highway
Parramatta, NSW 2150 Kogarah, NSW 2217
Tel (02) 9633 7300 Tel (02) 9588 0999

Brisbane AccountAbility - Brisbane

Level 7, 410 Queen Street Level 7, 410 Queen Street
Brisbane, QLD 4000 Brisbane, QLD 4000
Tel (07) 3211 9333 Tel (07) 3009 6100

www.ambition.com.au www.AccountAbility.com.au

Hong Kong
1202 – 1205 Alexandra House
18 Chater Road
Central, Hong Kong
Tel (852) 3101 3066

www.ambition.com.hk

Singapore
65 Chulia Street
#39-05/06 OCBC Centre
Singapore 049513
Tel (65) 6854 5600

www.ambition.com.sg

London
13 Southampton Place
London WC1A 2AL
Tel (44) 20 7404 4004

www.ambition.co.uk