· Accountants expect bonuses of 15% this season – a fall of 2 percentage points compared with last year.
· Average bonus now expected to be £9,087
· Total average accountancy remuneration expected to be £68,987 for the year
· Total accountancy bonus pot expected to be £4.8bn
UK accountants expect to receive an average bonus of 15% this bonus season (2012-13), according to research from specialist accountancy and finance recruiter Marks Sattin.* This represents a 2% fall in bonus payments compared to last year, mirroring a 2% fall between 2010/11 and 2011/2012.
With average accountancy salaries currently standing at £59,900, total remuneration is projected to be £68,987 for the year, a 1.9% fall compared with last year when total remuneration was £70,300. However, total remuneration is still 6% higher than in 2010/11, when average bonuses higher at £10,436, and average salaries were lower at £54,300.
Lower bonus expectations are reflected in the mixed results announced by the Big 4 over the past 12 months where profits per partner fell up to 5%. While revenues increased over this period, the cost of headcount growth particularly at KPMG and Pricewaterhouse Coopers, has led to the drop in profits.
Dave Way, Managing Director of Marks Sattin comments, “Previous year’s dip in bonus levels and the mixed fortunes of the Big 4 have clearly influenced the perception of upcoming bonuses among accounting professionals. There has also been strong political pressure on employers to limit their bonus payments. Hence there has been increased emphasis placed on salary growth as employers seek alternatives to compensate employees. With annual pay resilient, it’s clear that reducing size of bonuses is not an attempt to reduce labour costs but a change from short termism to a more long term view as accountancy revenues increase at the biggest firms.”
The decrease in bonuses means the total bonus pot is anticipated to fall 8% to £4.8 billion in 2012/13 bonus season, compared to £5.5 billion last year (2011/12). Only 25% of accountants reported a fall in headcount in their teams over the past year, with 78% stating headcount has either increased or stayed the same, meaning the bonus pot has had to stretch further.
While traditionally, financial benefits including bonuses were seen as an incentive to stay in a role, separate research by Marks Sattin** has found that only a little over a quarter of accountants (28%) decided to move roles purely for financial reasons. More common causes are a more interesting position (37%) and seeking greater challenges (29%).
Dave Way adds: “While a stretched bonus pot might be daunting for some accounting professionals, awareness that the industry is focused on growth and development makes for fewer sleepless nights. Employers should also take note that a focus on other factors such career progression and flexible working options can go a long way to keeping employees happy even without the higher bonuses of a few years ago.”