Treasury and Finance Pros’ Salaries Increase Modestly in Challenging Economic Environment
The latest compensation survey from the AFP shows treasury and finance professionals earned a 4.4% raise in 2023.
On average, finance professionals saw a 4.4 percent increase in their base salaries in 2023, according to results from the “2024 AFP Compensation and Benefits Survey Report.” This is lower than the average 2022 increase of 5 percent, but it is similar to the average pay increase for finance professionals in 2021 (4.3%).
The talent shortage and Great Resignation drove companies to offer higher salaries in 2022, for both recruitment and retainment purposes. In 2023, hiring managers continued to face challenges filling skilled positions like those in finance. At the same time, however, high interest rates increased pressure on employees to stay put. Fear of a potential recession—which would, necessarily, bring layoffs—likely contributed to last year’s reduction in the rate of increase in respondents’ base salaries.
Additionally, survey respondents listed the following factors as influencers of their salaries:
- Those with advanced degrees earn 10 percent to 17 percent more annually than those with only a bachelor’s degree or less.
- Those who hold the CTP or FPAC certification from the Association for Financial Professionals (AFP) make 2 percent to 15 percent more annually than those without the certifications. The greatest difference is seen in middle management.
- Differences in the cost of living across regions often account for salary variances. The survey report analyzed salaries based on respondents’ employment in the four regions defined by the U.S. Census Bureau—Northeast, South, Midwest, and West—as well as a virtual region. Among the four geographic regions, workers in the Northeast command salaries 7 percent higher than those in the Midwest, the region with the lowest average base salaries. But this trend tends to even out across high-cost cities—for example, those working in Chicago command higher salaries even though they reside in the Midwest.
- Salaries vary widely between industries, with those in the government/nonprofit sector making the least and those in technology services making the most—an average of 22 percent more than government and nonprofit workers, in fact.
- Finance professionals working for an organization with annual revenues of at least $1 billion earn, on average, 20 percent more than those working for an organization with annual revenues of less than $100 million.
For many finance professionals, bonuses are a key component of the compensation package. Our survey revealed that, in 2023, 68 percent of organizations granted bonuses, down 2 percentage points from 2022. Of those that did grant bonuses, 89 percent awarded cash bonuses, while 41 percent awarded stock options. Another 26 percent of survey respondents reported receiving profit-sharing incentives; 22 percent receive recognition/non-cash incentives; and 16 percent receive a retention bonus.
Executive-tier finance professionals received the largest average bonuses in 2023, by far, both in terms of dollars and as a percentage of their base salary. The average bonus for executive-tier professionals was $69,583, or 33 percent of their base salary.
When determining the type and size of performance bonuses for employees, the typical organization reviews a variety of factors. In 2023, 61 percent of organizations identified operating income or EBITDA (earnings before interest, tax, depreciation, and amortization) targets as the top determinant of bonus calculations. Other major factors in determining bonuses include completion of specific projects (42%) and profit or increased profit targets (40%).
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Benefits
Almost all (98%) the organizations represented in our survey offer their employees health insurance. The majority also provide dental (95%) and vision (93%) insurance, as well as life insurance (89%), retirement/pension plans (87%), and disability insurance (81%).
Paid time off (PTO) is also widespread, although the type of PTO varies from company to company. The majority of organizations (58%) offer a specified amount of PTO and expect both personal and sick leave to be deducted from that amount. But others offer separate paid leave (49%) and sick leave (45%). Unlimited PTO (also known as “discretionary PTO”) is available at 16 percent of the organizations surveyed.
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Job Performance, Challenges, and Responsibilities
Metrics for measuring treasury and finance employees’ job performance differ by organization, but for the majority of those surveyed (71%), meeting predetermined objectives/goals is number one. In many companies, quality of work (60%) and company performance (48%) are determinants of finance professionals’ job performance as well. Respondents also cited levels of productivity (37%) and efficiency (29%), in addition to other subjective measures (25%).
Like in 2022, survey respondents continued last year to see limitations on resources and a growing volume of work as their biggest obstacles to success in their current roles. However, outdated technology replaced recruitment as the third biggest challenge in 2023 for respondents with job titles in finance. For treasury professionals, forecasting came in as the third greatest challenge.
In terms of the significance of particular job responsibilities, both finance and treasury professionals cited forecasting as the most significant, followed closely by treasury management. But when ranked by segment, the significance diverged, with 55 percent of treasury professionals rating forecasting as significant versus 13 percent of finance professionals. Finance professionals ranked financial planning and analysis (FP&A) and forecasting as their top two responsibilities, while treasury professionals ranked treasury management and bank relationships as their top two responsibilities.
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Talent Management
When it comes to talent management, ensuring employees’ well-being is a huge factor in retention and recruitment. This can take the form of flexible work schedules, additional benefits, and recognition, among other factors.
A significant majority (85%) of survey respondents cited the importance of a flexible work schedule, and 77 percent of organizations represented in the survey offer flexible schedules. Fourteen percent of survey respondents are working completely remote schedules, while 25 percent work on-site except for a few days per month and 32 percent work a hybrid schedule. Only 14 percent work completely on-site.
More than half of organizations have a process for performance recognition in place, such as annual awards, but only 46 percent of survey respondents feel that this is an important benefit. Nearly as many—40 percent of survey respondents—want to be able to earn time off for volunteer activities outside of work, and 44 percent of organizations offer that opportunity.
Sixty percent of respondents place importance on opportunities for additional leave, such as birthdays, longer lunch breaks, and early closure on Fridays, though only 41 percent of organizations offer this benefit. Mentorship programs are also important to nearly half of survey respondents, but are offered at only 36 percent of organizations.
Disparities between employees’ expectations around compensation and benefits and employers’ offerings perpetuated hiring challenges for companies represented in our survey. Recruiting skilled talent to fill treasury and finance roles has been an issue for years, and 60 percent of our 2023 survey respondents said it is an ongoing issue. They also pointed to upskilling talent (48%) and retaining talent (41%) as key challenges for their treasury or finance organization.
When asked what their employers should be doing to alleviate these issues, respondents to our survey cited the following remedies:
- Work-life balance (cited by 95% of respondents)
- Flexible work environment (91%)
- Professional development opportunities (91%)
- Higher compensation (90%)
- Incentive compensation (86%)
- Improved benefits (79%)
However, a wide gap remains between employees’ and employers’ views on how to resolve talent management issues. For example, 90 percent of survey respondents said higher pay would help to mitigate talent management issues, but only 46 percent believe their employer is actively taking this approach. Similarly, 86 percent of survey respondents believe offering incentive compensation would assist in managing talent, but just 56 percent of companies are offering incentive compensation.
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Competencies, Development, and Upskilling
According to survey respondents, strong analytical skills are the most important competency treasury and finance professionals can develop to improve their chance of success in the profession. Interestingly, they ranked two soft skills as second and third in importance: the ability to communicate effectively with internal and external stakeholders (41%) and leadership and people management skills (40%). Being able to analyze the numbers is crucial for finance professionals, but if they can’t communicate the story the data tells, they’re likely to fall short. This is especially important when it comes to communicating with non-finance stakeholders.
Where, then, do respondents to our survey see the biggest talent gaps? The most often cited talent gap is problem-solving skills (reported by 39% of respondents), followed closely by strategic and innovative skills and leadership skills (each 37%), interpersonal skills (34%), and analytical skills (28%). Which leads us to professional development and upskilling.
Exactly half of survey respondents work for an organization that provides in-house learning opportunities, and nearly half (46%) can choose their own professional development options, with the cost subsidized by their employer. In contrast, though, 27 percent of survey respondents work for organizations that offer limited support for professional development opportunities. And 16 percent have no professional development or upskilling opportunities available at all.
Providing employees with upskilling and professional development opportunities is more important than ever before. On the business side, it means enhancing job performance, which in turn improves productivity and profitability. And for employees, an investment in their future makes them feel valued, which increases job satisfaction and, ultimately, retention.
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