Key considerations for salary negotiations

Negotiation

Demand for management accountants is high in many parts of the world, meaning that talented professionals may be able to negotiate better terms on a new role. Meanwhile candidates are becoming more aware of their worth and increasingly looking to discuss terms with potential employers.

While negotiations once tended to focus only on salary, employers can now also be open to discussing a wide range of options, including flexible working. But successful negotiation requires a careful and sensitive approach — get it wrong and you may lose a great opportunity.

Singapore is one area experiencing an acute shortage of qualified management accountants, particularly with a multinational background. Demand has increased to a level where top candidates receive numerous offers, according to Jeffrey Ng, director at Michael Page Singapore.

He said that the market rate for salary increases when someone changes jobs averages 10% there. But it can be higher for management accountants.

“The scarcity of highly qualified management accountants gives them an advantage,” Ng said. They have received salary hikes of 15% to 20% when switching jobs, so [successful candidates] are well placed to ask for at least [that much]. They will also often get counteroffers from their current companies.”

When negotiating salary, professionals should familiarise themselves with the hiring manager and the industry, he said. Investing time in networking and open communication with your potential employer will help you build rapport and be well informed enough to stay away from topics that are non-negotiable, Ng said.

Candidates should exhibit genuine interest in the job opportunity and scope and should be transparent with a potential employer about areas of interest and career development, Ng said.

“Portray yourself as self-driven and focused — many companies appreciate this,” Ng said. “But do not appear too fixed on your goals. Employers may have better ideas or suggestions for you. So be open to their recommendations and demonstrate interest in other areas so they can see your motivation.”

Experience level

Lee Owen, senior business director at Hays Accountancy & Finance, said demand in the UK market tends to be higher for newly qualified candidates than for those with four years’ post-qualified experience. The more senior the vacancy, the greater the supply of candidates. So the former are in the best position to negotiate, he said.

“Employers will typically fight harder to secure a candidate with exceptional traits such as a strong work ethic and excellent stakeholder management skills, and candidates are also more aware of this,” he said.

However, Owen said candidates attempting to negotiate must read the situation carefully, especially if it is the first time they have tried it.

One resource available to members of the Association of International Certified Professional Accountants is an online salary calculator. That tool enables members to compare their remuneration package to those of counterparts in their country, industry, or level of experience.

Employers generally prefer a degree of humility, Owen said.

“You may lose a dream job if your tactics are too bullish,” he said. So, it’s best to find out, either in discussion with the employer or working through a recruiter, how open the organisation is to negotiating.

Owen said that verbal negotiation is preferred, “as much of the sentiment can get lost in written communication”.

The best way to achieve a result is to come armed with evidence, said Owen. If you ask your prospective employer for more salary, they will want to know why you deserve it and what they will get in return.

What to negotiate

Companies are increasingly flexible around which terms they are willing to negotiate, recruiters say.

London-based Marcus Williams, an associate director of finance and marketing at Morgan McKinley, said: “In the past, it was all about negotiating salary. In the last three to five years, that has shifted towards negotiating flexible working hours, which has become just as important to people, if not more, than a salary. They want a better work/life balance, and companies are responding to that.”

Owen said that Hays was seeing many other aspects besides salary as negotiation points. Those include flexibility in hours, bonuses, and additional benefits.

Ng said that in Singapore salary is the most common area of negotiation. But it’s not the only point. Base salary, sign-on bonuses, and other benefits are being negotiated regularly.

Focus on European financial services

The European financial services market is experiencing significant upheaval as UK firms make contingency plans for Brexit by moving some operations into other EU countries.

This is strengthening the market for management accountants in alternative financial centres, such as Dublin. But it is also driving demand in the UK for finance professionals who can help manage the transitions. Both are in a strong negotiating position, recruiters say.

“There is demand for management accountants in finance business partnering positions and financial analysis roles, driven by organisations such as banks and asset managers setting up abroad because of Brexit plans,” Williams said.

Williams said that Morgan McKinley was recruiting for locations such as Dublin, Amsterdam, and Frankfurt. “Our clients are having to offer good salaries, packages, and relocation fees to attract talent,” he said. “Those applying to relocate from London to somewhere like Dublin may be in a stronger negotiating position.”

Whether negotiating on their own or through a recruiter, candidates should keep their expectations constant throughout a process, unless they receive a better offer. Only then are they in a position to negotiate, he said.

“Before you even think about negotiating, you need to understand the strength of your position — for  example, how far the company is through the process, how many others are still in contention, and if the feedback from the company is positive,” Williams said.

Tim Cooper is a freelance writer based in the UK. To comment on this article or to suggest an idea for another article, contact Neil Amato, an FM magazine senior editor, at Neil.Amato@aicpa-cima.com.

Members of the Association of International Certified Professional Accountants can compare their remuneration package to those of counterparts in their country, industry, or level of experience using the Association’s online salary calculator.