Update of the Market – End of 2021

People around me know I’m a big fan of Christmas, my jumpers come out in November, Radio X has already been swapped for Heart Xmas Classics and I’ll be watching Elf and Home Alone this week with my daughters. 

I would imagine that this year for many accountants (and recruiters!) Christmas can’t come fast enough.  

2021 has been bonkers. Bedlam.  Mindboggling. Mystifying. Frustrating. Elating.  The recruitment rollercoaster in all it’s terrifying glory and on its fastest setting.

The general facts:

• The demand for qualified and part qualified finance professionals has been extreme all year from start to finish.
• The competition for talent has been fierce from Jan to now. 
• Salaries have raced forward in finance in both permanent and interim markets. 

As we enter Period 12 there seems to be very little change – employment is high, last week’s job boards reported highest ever vacancy postings, the private sector is hiring in full force and the public sector has large swathes of open positions. 

Alexa, Where are all the candidates? 

Candidate ‘appetite to move’ is improving – but it’s marginal.  Application volumes are suggested to be up around 10%-15% in November versus July.  But are still behind 2019. 

So, it looks like the war for talent party is going to continue… and we might even be getting a lock in!

— Or is it???

Well demand ain’t changing anytime soon from our view.  Our broad network suggests that all areas of the market are looking to stay ‘on green’ when it comes to hiring expectation.  

• Plc’s are forecasting high sales and their challenges are linked to delivery rather than need: supply chain, raw materials and labour availability. 
• PE activity has been manic and we can expect this to remain solid through 2022.
• Privately held businesses in the main seem keen to capitalise on a ‘not as bad as we expected’ couple of years..

Lots of sectors are seemingly flying; manufacturing, distribution, construction, ecommerce, fintech, biotech…. And that’s without hospitality, leisure and travel coming back to life in full force at some point….

In particular high demand:

Commercial FCs, finance managers, FP&A leads, Management Accountants, Financial and Group Accountants, recently qualified finance business partners and commercial accountants, CIMA and ACCA studiers…  pretty much the whole market (with the slight exception in that FD / CFO roles are probably more steady currently). 

Salaries have been crazy – we’ve seen a broad range of individuals getting 20 – 50% pay increases in one move this year (against a standard 5-10% in a ‘normal’ year as a benchmark). 

• There are lots of factors at play but the short version is that there have simply been more businesses looking for candidates of a ‘similar profile’ so demand has increased price. 
• Businesses have been forced to pay more to attract talent and conversely employers are countering the move with salary increases to retain their current folk. 

Have we seen the ‘great resignation’ – absolutely not. 

Is it coming? … to some degree yes. 

In the same way that there are very few houses coming to market there have been fewer candidates coming to market in 2021 than normal. 

But the momentum feels like it is shifting – there are slightly firmer levels of job-seeker interest in Sept / Oct / Nov.

BUT expectation is on the ceiling – people exploring a move have high expectations and rigid requirements. 

At some stage the balance will tip – when is anyone’s guess this is only my personal view (crystal ball at the ready) but I expect this to happen between March and June 2022… 

• Year end will be out of the way for most groups.  Actuals will be clear.  New wage (and material) costs will crystalise.  Pricing discussions will be had and budgets will get thrashed out.   And I expect a crazy March to July as a result. 

• Costs will be massively scrutinized in 2022.  I would expect more than ever.  Because everything this year has spiraled and most businesses seem to have been adopting a ‘roll with it’ approach – largely because consumers seem willing to be sucking up the pricing increases. 
• Even with national wage increases this seems unsustainable … and if sales dip, budgets squeeze, then candidates start to come to market proactively – for more money, better opportunity, more progression, supportive cultures……. And so I predict an element of ‘floodgate’ in Q2/Q3 2022. 

So what?

Well, the more savvy businesses will be ‘gearing up’

• Understand your internal talent pipeline – who are your rising stars and have you incentivised them to stay (money, mapped out progression, development and mentoring, flexible working to suit them, acknowledged and removed their frustrations?)
• Leave some flabbiness – is your team so lean that everyone is peddling to the max and there is zero flex in the team?  Sensible businesses will be hiring talent where they can – to build in some contingency and to reduce the chance of burnout. 
• Understand the gaps coming down the line.  Scenario planning and getting hiring strategies in place on the front foot.  Some are obvious to plan – maternity, retirement, secondments etc. 
• Get your benefits structure competitive – if your holiday allowance is 20 days it’s poor. Don’t shoot the messenger.  25 days is seen as the norm.  The majority want hybrid working – get it set up if you can.
• Get your graduate / apprentice programme fixed – next year the talent race is continuing so businesses that create home grown stars will reap benefit for their investment and hard work in 2022/2023. 
• Understand your pockets of underperformance and throw time at supporting your existing squad – this should allow you to be more decisive in the thick of the action next year. 

It’s likely to be a very busy year an no doubt there will be some interesting twists and turns!  

Thanks as always for reading!! If you have recruitment needs in finance….

ARG was established to provide accountancy & finance professionals an opportunity to work with a recruitment business that can be trusted. 

We coordinate a wide spectrum of finance positions for UK businesses including roles requiring a high degree of proactivity and those needing particular sensitivity / confidentiality through the search.