Competition for financial executives may be heating up in 2006. That’s good news for job candidates, but it will pose some challenges for smaller businesses.
“About 80 percent of small to midsized companies believe they will invest in hiring in 2006, not just to replace, but to add staff,” says Michael Assaad, a vice president at staffing company Ajilon Finance. “These companies are growing their revenues as the economy gets better, expanding their headcount, and looking to grow in other aspects, such as office space and technology.”
Their biggest employment challenge: keeping up with rising salaries at larger companies. In the past two years, salaries for professionals in public and private accounting have increased an average of 10 percent each year, according to Ajilon. “Companies are dying for great talent,” explains Assaad — especially given the scrutiny brought by Sarbanes-Oxley — “and there is a labor shortage.”
Bill Coleman, a senior vice president at Salary.com, pegs the recent yearly increases somewhat lower, at 3.5 percent to 4 percent across large and small companies. This year, Coleman expects those figures to hold steady at smaller companies, but larger companies, he believes, may see those numbers rise.
Another challenge for smaller businesses is the inability to match benefits such as tuition reimbursement, a large 401(k) match, and lengthy vacation time that may be offered by their larger competitors.
To successfully compete for candidates, advises Assaad, these companies must instead highlight those characteristics that set them apart. “We find that at a smaller company, employees have more job security, autonomy, and a greater voice in the company,” he says. Assaad also maintains that the “next step” on the career path is better defined at smaller businesses; although the CFO might not pull down the big salary that a larger company would offer, “you can get the title and control a lot quicker.”
Salary.com’s Coleman also notes an interesting twist in the hiring picture as a result of recent regulatory reforms. True, he projects rising salaries for CFOs, controllers, and to a lesser degree treasurers, but the increases will be much more apparent at larger public companies where the scrutiny (and job intensity) has risen since the passage of Sarbanes-Oxley.
Smaller or private companies, adds Coleman, are somewhat immune to that increased pressure. For the finance team, both the risks and the rewards are lower than for their more-exposed counterparts at larger companies. That’s one more characteristic that might help a smaller company set itself apart: a little peace of mind.
A selection of salaries for finance executives at companies with less than $50 million in annual revenues, according to Ajilon Finance:
• Nationwide, chief financial officers and treasurers at these smaller companies earn $90,000 to $120,000, on average. In the Northeast and the New York metro area, they can expect to earn between $93,000 and $120,000; in the Mid-Atlantic region, $86,000 to $100,000; in the Midwest, $78,000 to $99,000; in the Chicago metro area, $83,000 to $120,000; in the Southeast, $83,000 to $100,000; in the Mountain region, $78,000 to $100,000; and in California, $92,000 to $139,000.
• Salary averages for controllers vary from $53,000 to $120,000 nationwide. In the Northeast, the range is $73,000 to $120,000; in Northern California, 80,000 to $100,000.
• Accounting managers earn $43,000 to $76,000 on average. As in most categories, Northern California has the highest compensation range and the Midwest, the lowest.
• Nationwide, Sarbanes-Oxley auditors at these smaller companies earn $51,000 to $94,000 on average; those in the Pacific Northwest average in the range of $67,000 to $94,000.