Chief Financial Officers in Brisbane enjoyed the biggest jump in pay last year, while their Perth counterparts saw no change in their average rate of pay, according to research.
Recruitment firm Robert Half's 2017 Australian Salary Survey found CFOs working for small Brisbane firms enjoyed a 2.9 per cent salary rise between the 2017 and 2016 financial years, with average salaries jumping from $140,000 to $200,000 in 2016 compared to $150,000 and $200,000 last year.
CFOs working in large Brisbane firms enjoyed a 1.9 per cent rise with average salaries rising from $190,000 to $350,000 in 2016 to between $200,000 and $350,000 in 2017.
Sydney is the city with the highest salaries for CFOs, according to the research. CFOs of large businesses can earn up to $450,000 a year, while a CFO in a smaller Sydney firm can earn up to $300,000.
In Melbourne, CFOs of large firms can earn up to $280,000 and CFOs of smaller firms can earn up to $215,000 a year, a figure that rose from $210,000 in 2016.
In Perth, CFOs of large firms can earn up to $275,000, while CFOs of smaller firms can earn up to $175,000, with no change to these amounts between 2016 and 2017.
Andrew Brushfield, Director of recruitment firm Robert Half Australia, says the difference in pay rates across the states is a function of different markets.
“New South Wales has the fastest growing and largest economy. The bigger companies that operate in the bigger states tend to pay more than big finance jobs in small companies or in the smaller states," he says.
But pay rate variations between cities are also influenced by what's going on in local markets at the time, he says.
“This time five years ago, when Perth was booming, staff were being paid more than on the east coast in some cases," he says. “Western Australia has experienced five challenging years, and therefore salaries have tapered off versus New South Wales. Market forces are always a factor and that will only continue in the future," he says.
It is worth noting Australian CFOs earn around what their US counterparts earn. According to Robert Half's US 2018 Salary Guide for Accounting and Finance Professionals, top US CFOs on average earn US$497,000, and US CFOs with the least experience are able to earn US$119,000 on average.
Skills in demand
The Australian Salary Survey found accounting, business and financial analyst as well as credit and collections staff, all in hot demand.
Australian trends reflect a worldwide situation where demand for good finance staff is being driven by firms' increasing use of big data. As a result, there's strong demand for people with accounting, financial analysis, controller and internal and IT audit skills in this sector.
Additionally, a shortage of candidates in public accountancy is leading to a war for good graduates.
The paper also noted that firms are increasingly offering flexible work practices to attract top talent. They are also putting on staff on a temporary basis to 'try before they buy' before appointing them to a permanent position.
Firms are offering perks like bonuses, extra holidays and flexible working to attract top staff.
“Flexibility is huge," says Brushfield. He says despite the fact that finance teams require people on the ground all the time, there are plenty of well-tested ways to give people the work life balance they want.
“The lead-up to month-end is always busy. But outside that there's an opportunity to give people flexibility," he says. “Lots of organisations have web-based ledger tools, so work can be done remotely. There's also some benefit to being away from the office; people get the time to do their work without interruption," he adds.
Brushfield says these non-financial incentives are becoming especially important because wage growth has been so slow recently.
To compensate firms are giving staff including CFOs non-financial benefits which can include days off in lieu of working overtime, and more professional development opportunities.
“These incentives are very relevant in an environment where you're not getting significant changes in people's base salaries," he advises.
Mind the gap
Research shows while males still take up the lion's share of senior finance roles, the gender pay gap is closing.
According to a study published by the Workplace Gender Equality Agency, Gender Equity Insights 2017, Inside Australia's Gender Pay Gap, men make up 70 per cent of the 55,300 senior leaders in Australia.
But the pay gap between the genders has narrowed over the past few years. According to the research, the pay gap for senior management in 2015 was 28.8 per cent, but by 2016 it had dropped to 25.5 per cent.
Pay grades and gaps notwithstanding, Brushfield says there will always be demand for top quality senior finance executives.
“Every company has a basic need to report the numbers. They expect good finance people will have the technical capability to report those numbers. But the trigger to hire is more about the candidate's commercial acumen and operational knowledge. Quite often the trigger for a business to let someone go is a lack of those soft skills," he says.
Brushfield notes a constant feature of the market is the relative scarcity of senior roles.
“The more senior you become, the fewer jobs there are. But there is a greater degree of mobility now in terms of opportunities to move into roles overseas or interstate, if the candidate is willing to travel. This often involves an increase in pay as well."
Overall, Brushfield is optimistic about opportunities for CFOs. “Governments are imposing extra regulations on companies regularly. More regulation means more reporting, which is good news for finance people."
Key Takeaways
- Salaries for CFOs are rising in many cities, with Perth the exception to the rule, and top CFOs can earn up to $450,000 a year in Sydney.
- Skills in demand include financial analysis and IT audit, as firms bring more new technologies into their operations; but soft skills and cross-business skills are equally important.
- With wage growth stagnant, firms need to offer non-financial incentives to attract top staff, including days off and professional development.
- The gender pay gap is closing for senior finance staff.