The state of pay
Basic salaries for qualified accountants in permanent roles rose by 3.7% in 2007. Fifty percent received an increase between 4% and 6%, while the average pay award in the UK, excluding bonuses was 3.6%. Inflation stood at 2.1% in November 2007. (Source: The Office of National Statistics).
Sector focus
The energy, oil, gas, utilities, property and financial services sectors led the market for pay rises in 2007. This is broadly in line with expectations as they were highlighted as sector hotspots in the last edition of Finance connections. Many employers are opting to compete head-to-head and award pay increases and bonuses in an effort to retain key talent. Senior executives in the £70,000pa+ bracket were awarded the highest pay increases at 4.4% of their basic salary. The junior and senior support staff who earn up to £30,000pa were awarded the least at 2.5% of their basic salary.
Bonus review
The majority (62%) of accounting and finance professionals in permanent roles were not awarded a bonus in 2007. Employees were asked two questions: “as a percentage of your salary; what level of bonus can you earn in addition to your basic salary?” and “what percentage bonus did you earn last year?”. Over a third (38%) of employees surveyed said that they were eligible to earn a bonus. If they were awarded a bonus, which 30% were, payments were healthy at 9.4% of basic salary.
Finance staff within the financial services, pharmaceuticals and services & consultancy sectors earned the highest bonus awards at over an average of 11% of basic salary. Over 25% of finance staff within the pharmaceuticals sector were awarded a bonus over 21%. No other sector awarded bonuses at this level. Bonuses within the financial services sector were also high with 30% awarded an average pay out of 12.3%.
Bonuses in the London market outstripped the average in 2007. Finance staff were awarded bonuses of around 10.4%. In a similar story to the salary stakes, senior executives in the £70,000pa+ bracket were awarded the highest bonuses at 12.5%. Junior and support staff were awarded around half this figure.
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