Hello, and welcome to this month’s edition of our Finance roundup.
With 2023 behind us, we’re looking at trends that we expect to carry through into the new year, specifically, a focus on interim finance capabilities. Last year, we saw increased demand for temporary and interim workers, particularly across H2. We’ll review why this could be and why we expect this to continue into 2024.
We’ll also review the most important parts of the Autumn Budget and look at recruitment challenges that companies could face in Q1.
More roles across interim and temporary market
We’ve seen an increase in the number of finance roles on an interim or temporary basis. Looking at demand in Q4 versus the previous quarters, there’s been a considerable hike of 53%.
Something that we’ve been discussing in several of our updates is the time it’s taking for permanent hires to be introduced to a business. While demand remains, the recruitment and interview processes are taking much longer than 2022 (up to double the time for niche skillsets). Because of this, more companies are relying on interim support to manage gaps between outgoing employees and new hires, particularly at the senior/qualified level, where notice periods are typically 3months.
With economic uncertainty continuing into 2024, it’s understandable that more businesses are opting to hire interim support until things become clearer. With many transformation projects on the horizon in 2024 – across system implementations, process improvements, automations and cost-cutting – using interim staff to cover the shortfall until businesses are confident in their permanent hiring can be an attractive option.
It’s no secret that last year was challenging for most businesses, so expectations were low for the Autumn Statement. That said, a few positives came out of the Budget for employers and employees alike.
Productivity metrics take their toll
As we noted last year, most leaders spent Q4 reviewing productivity and profitability. As the year progressed, more businesses looked at cost-cutting measures and how to “do more with less”. Cost-saving activities such as redundancies and hiring freezes have meant that there’s been a sharp rise in the number of active candidates in the market across both permanent and interim positions.
Swapping people for systems and putting more work through those that are left is an issue highlighted in the January Economic Update. It’s reported that the strain being put on the remaining employees at businesses where productivity overhauls are taking place can lead to a stand-off of sorts, creating resentment in the ranks and potentially undermining the very productivity they were hoping to achieve. It’s imperative, therefore, that productivity and cost-saving projects are appropriately planned and coordinated through a project team – ensuring the long-term benefits come to fruition. Could this be another factor in the increased demand for interim workers?
Remuneration growth for starting salaries
The REC has reported the rates of pay growth have increased from November lows. The latest surveyed data indicated that the rate of starting salary inflation has picked up, although we are still seeing businesses struggle to meet candidate expectations with budget constraints still firmly in place. Justine Andrew, Partner and Head of Education, Skill and Productivity at KPMG UK, said: “For those lucky enough to start a new role, there was another sharp increase in starting salaries due to competition for skilled workers. But the rise wasn’t as high as those seen in recent months as businesses face ongoing pressure on their budgets. Businesses which successfully planned and managed their workforce through the intense Christmas period will be breathing a sigh of relief, hoping that 2024 brings some much needed certainty to boost the UK economy and overall productivity.”
Recruitment challenges for companies
I recently posted two adverts for fully remote roles on LinkedIn – they were senior roles (VP of Finance and Financial Controller) and clearly attractive propositions; within 48 hours, I received 7,500 applications from applicants across the globe. This got me thinking: if companies are using direct adverts to hire for their roles, how is this manageable alongside their day job? Even for an internal recruiter, this volume would be overwhelming, surely?
Whilst I understand the reason why companies choose to run a recruitment process themselves, which is often financial, once you start looking at the cost of the time spent by one (or more) of your team creating the advertisement, managing applications, longlisting CVs, conducting initial telephone interviews before creating your final shortlist and initiating interviews, it begs the question whether a recruitment fee is really that more costly?
Thank you for taking the time to read our senior finance market update. As always, if you would like any advice on hiring, candidates, salary benchmarking, a general chat about the market, or to discuss your next role, you can now book a 30-minute call with me using this link – https://calendly.com/ashley-absolute-recruit/30min
N.B. For those unaware, we also run a Senior Finance Community where members share ideas, experiences, and solutions to finance-related issues, primarily through our WhatsApp group and quarterly meetups. If you would like more information or wish to join, drop me an email at email@example.com