Finance salaries continue to increase amid a firm jobs market, according to a couple of recent surveys, although lagging corporate performance is eating away at the bonuses of CFOs at large companies.

A recent salary guide from staffing company Robert Half projects that starting salaries for a range of finance positions—from CFOs, treasurers, and controllers all the way to financial analysts and accountants—will rise a average of 3.7% next year.

That's down from the average 4.7% increase that the company projected for finance jobs this year. But Tim Hird, executive director of Robert Half Management Resources, argued against interpreting the lower number for 2017 as a sign of softening in the market for finance jobs. "What's happening is the employment landscape is just leveling out," Hird said, calling the 4.7% projected in 2015 for this year "almost unsustainable."

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The 3.7% rise projected for next year "is still extremely healthy," he said, noting that it is the second highest annual increase the report has shown since 2009. "The market still has significant shortages of talent, especially in areas that require expertise."

Hird pointed to Bureau of Labor Statistics data for the second quarter showing an unemployment rate of 0.5% for compliance executives, far below the overall U.S. unemployment rate of 5%. Similarly, the BLS shows a 1.8% jobless rate for financial analysts, a 2.2% rate for accountants and auditors, and 2.8% for financial managers, a category that includes treasurers. "It gives you an idea of how acute this talent shortage is in the marketplace," he said.

Certainly Robert Half's survey, which is based on the thousands of placements the staffing firm makes each year, shows some finance positions are expected to see above-average salary increases. Controllers; internal auditors and general accountants at midsize companies; and business systems analysts at large and midsize companies are among the jobs expected to see increases of 4% or higher.

Bonuses Weigh on Total Compensation

A separate survey conducted by Compensation Advisory Partners, an executive compensation consulting firm, evaluated the compensation received by CEOs and CFOs at 100 large corporations. The finance chiefs in that survey received a median salary increase of 3.9% this year, up from 3.0% in 2015, while CEOs got a median increase of 2.5%.

But when it comes to overall compensation, those salary gains were partly offset by lagging bonuses. The overall compensation for CFOs rose just 1.4% as the bonuses they received declined, while CEOs saw overall compensation rise 2.2%.

Kelly Malafis, a partner at Compensation Advisory Partners, linked that offset to companies' lagging results last year.

"When we look at performance, it was not as strong in 2015 as it was in 2014, so the numbers were down," said Malafis, pictured at left. "Even though the salaries were up and the long-term incentives were up, the bonuses were down, so the total was not up as much."

The effect of the bonus component on overall compensation points to the fact that salary is a relatively small part of top executives' pay. According to the Compensation Advisory Partners survey, salary represented just 21% of surveyed CFOs' compensation last year, while bonuses made up 22% and long-term incentives, such as stock options, were 57%. Salary is even less of a factor for CEOs, at just 12% of total compensation, while bonuses made up 21% and long-term incentives 67%.

The survey also showed that CFOs get salary increases more frequently than their bosses: In 2015, 77% of finance chiefs received increases in salary, versus 58% of CEOs.

Malafis said the disparity is the result of "the spotlight on CEO pay.

"A lot of companies and boards of companies prefer increases to CEO pay to be in the form of performance-based comp, perhaps a higher bonus opportunity or a higher long-term incentive opportunity," she said.

Beyond Salaries

Companies' efforts to attract new employees go beyond increasing the pay that they offer.

Tim Hird, Robert Half"The salary itself is not enough to get a talented candidate with in-demand skills to join the company," said Robert Half's Hird, pictured at right. "A broader package is needed." Such packages might include "work-life balance, flexibility in hours, telecommuting, professional development opportunities, [or] mentorship opportunities," he said.

The demand for finance employees is also pushing companies to streamline their hiring processes, he said, since companies where the process is prolonged or involves multiple rounds of interviews risk losing talent.

"When candidates are looking to join a company and they have multiple offers, they're not going to wait around for a company that has taken three months to go through a hiring process," Hird said. "So [companies] are trying to condense hiring timelines. The more condensed, the more decisive companies can be in the hiring cycle; it's giving a better impression of the organization."

According to the Robert Half report, certifications that are in demand include CPAs, MBAs, chartered financial analyst (CFA), and certified internal auditor (CIA).

Hird said that in addition to the traditional credentials related to technical knowledge, more finance workers are considering certifications that expand their horizons and develop softer skills, such as a certification in project management. He linked that to the fact that finance and treasury jobs have evolved beyond back-office work and now involve strategic decision-making and projects. Thus, they require finance employees to possess additional skills, such as the ability to influence the company's leadership and communicate verbally and in writing.

"People are looking to expand their credentials in other areas outside of their professional discipline, mostly to build these softer skills they can use outside the worlds of finance and treasury," he said.

 

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Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.