Men Accountants earn 60% more than Women

Source: FinancialDirector.co.uk

Male accountants over 45 earn 60% more than female counterparts, study reveals

The pay-gap between male and female accountants over 45 has stretched to 60%, a new study has found.

The average basic salary for a male accountant over 45 is £98,400, while their female colleagues’ average is £60,500, according to a Career Benchmarking Study released by the ICAEW and recruiters Robert Half.

This difference increased in the past year, with women aged 46-55 seeing their wages drop by an average of 10% from last year’s figures, compared with just a 1% drop for males.

However, for younger accountants the difference is much smaller. Females under 30 receive an average wage of £47,300 (an increase of 3% from the previous year) while the average male salary is only 4% higher at £49,300 (a decrease of 5% from the previous year).

Michael Izza, chief executive of the ICAEW, said: “Our studies show that to attract and retain female talent, it is also vital to meet employee expectations regarding career progression and work-life balance.”

SG Comment: Whilst the above article provides quite revealing stats on male/female salaries, it doesn't attempt to explain why there appears to be a wide gulf between male/female salaries at equivalent grades, particulary for ages above 30. This should be incredibly obvious - a lot of women leave the market to have children, and then resume their careers later on. Of course, a women that has taken 3-5 years out of the market to have a family will be re-employed on a lower salary level than an equivalent man that has stayed in the market, that makes sense and is the case. Conversely, I think it is also the case that, in the majority of situations, women that don't have career breaks to have a family stay at the same salary levels as men, which again is not factored into the above study.

Tax Temps - who employs you?

By Simon Godley
(Legal source: Field Fisher Waterhouse LLP)

In the long-awaited decision of James v London Borough of Greenwich, the Court of Appeal has upheld the decision of the employment tribunal that an agency worker, supplied by an employment agency, was not employed by the end-user (and therefore was not entitled to those statutory rights which are only available to employees, such as the right not to be unfairly dismissed).

The Court of Appeal has clarified, to some extent, in what circumstances an agency worker is or is not an employee of the end user, emphasising that the implication of a contract of service must be necessary to give effect to the business reality of a relationship between the worker and end user.

The Court of Appeal confirmed that the correct legal question is not whether the individual is an "agency worker" but whether he is employed by the end user under a contract of employment. The two types of contract - agency agreement and contract of employment - are not necessarily mutually exclusive and it is legally possible for a worker to have one kind of contract with the agency and another with the end user. A tribunal should therefore assess the factual evidence carefully to determine whether the individual is an employee. Where there is no express contract, the tribunal must consider whether it is necessary to imply a contract of employment between the parties.

In this case, the tribunal was entitled to conclude that the individual, Ms James, was not an employee of the end user (the Council) because there was no express or implied contractual relationship between her and the Council. Her only express contractual relationship was with the employment agency and, similarly, the Council's only express contractual relationship was also with the agency. The tribunal was correct when it found that it was unnecessary to imply a third contract between Ms James and the Council to give business reality to the relationship between the parties: what both Ms James and the Council did was fully explained by the express contracts they had respectively entered into with the employment agency.
Interestingly, the Court added that it is aware of the controversy at both a domestic and EU level about the absence of job protection for agency workers. However, it emphasised that courts and tribunals cannot confer the right not to be unfairly dismissed on a worker who does not have a contract of employment. It is not for them to express views about a change or to initiate change: this is a matter of social and economic policy for debate in and decision by Parliament.

The above case shows that the whole area of companies 'employing' temps via agencies is still a bit of a minefield, particularly regarding the rights of the worker (temp). It seems that the pressure is on the agencies to be very clear about contracts that are put in place, and between which parties.

Any other input or views on this would be very welcome.

In-House tax execs moving back to Big Four......

By Simon Godley

In my last two blog postings on people moves, I have highlighted senior tax executives (either Head of Tax or senior divisional tax manager) that have been attracted back into the profession into Big Four firms at senior levels.

Clearly the Big Four are tempted to bring into their tax service lines senior industry tax execs, I guess because they have very valuable insight (ie from the 'users' perspective) of a particular industry. Notable moves have been from financial services / insurance groups into a Big Four's FS tax practice in London. Also, the tax service line is bringing in a well known figure in that industry, someone who will have a valuable network and possible in-roads into existing and new clients.

However, I have also picked up that there are risks for the practice in opting for this type of hire. A senior Head of Tax will be looking to join the practice at Tax Partner level to offer them the financial incentive for the move. A Head of Tax of a very large corporate group could be earning a package of £200 - £350k including bonus, and so will need to join as an equity partner. This salary level is above what could be offered at Director level. This could lead to two areas of concern for the practice. Firstly, this new Tax Partner is under pressure to bring in the revenue stream proportional to their salary level, and to demonstrate that they can convert their industry contacts into fees, which I suspect is not easy. Secondly, and more of an immediate issue, is what impact this appointment may have internally to those at Director level in the practice who are trying to carve out a progression to a Partner role. In a very buoyant and growing economic backdrop, these two issues may become less significant, but in more tense and uncertain times?

For the above reasons, I think this is why the vast majority of Tax Partner appointments are home grown, but clearly sometimes the Big Four like to take more of a risk to raise their profile in a particular sector.

Tax skills shortage - what can be done?

Thoughts of the day - Simon Godley

I keep seeing examples of very well known, high profile and blue chip UK companies (or international companies in the UK) really struggling to recruit UK and/or international tax professionals. It can now take 6 months or more from inception of a role to having a candidate accept an offer. Then in most cases they will serve a 3 month notice period, and so it can take 9-12 months (or longer) to have a tax professional start in a specific role which has been vacant. When a Head of Tax is advised that this could be the timescale to recruit, they will seem highly concerned - in a 12 month period, the outlook or landscape of a business could have completely changed.

As I have discussed in previous articles, this is due to a combination of an acute shortage of fully trained tax professionals in the UK, coupled with a lack of appetite from tax professionals in the UK to move jobs. That's the candidate effect, but there is also the client effect ie when it comes to considering candidates from different backgrounds for a role, just how flexible will a company be? In my experience, not very, which can be fair enough, because in-house tax functions want to recruit in experience which is very targeted for a particular role, thereby not needing to spend time training them after they have joined.

But I think the UK market, and particularly companies, are possibly missing something here. When I look through my candidate database, I have a sizable number of qualified and potentially highly skilled tax candidates from overseas - popular places of origin are India, Australia, South Africa, and Eastern Europe. These candidates are not usually included for first interview because they either lack or have no UK tax experience. But if they were included for first interview, and they held a highly skilled migrant visa to work in the UK (which quite a lot do), and there wasn't a major language barrier (and there rarely is), and the company was prepared to allow them some time to retrain into the UK tax system, then companies may have someone up-to-speed and trained in a role quicker than if they hold out for a UK tax candidate.

The employer will also benefit from the salary that they will have to offer ie lower than an equivalent UK tax professional, and at the same time an attractive salary level from the candidate's perspective.

I'm not at all saying that recruiting candidates from overseas is not without some major pitfalls, for example, physically relocating the person and their family. But I feel that there is more scope for UK/international candidate arbitration than is currently practised.

Views on this warmly welcome.

Back into tax after a career break

By Simon Godley 29 October 2007

I have recently worked with two tax candidates, both looking to get back into the tax market following rather lengthy career breaks. One had decided to move on from a Tax Manager role with a major London bank, and take a cultural sabbatical to Latin America, lasting 3 years. The other person had been offered an attractive pay-off from a professional firm in late 2001, and decided to pursue various academic interests, amounting to a 5 year career break.
Both candidates found good quality tax positions within a matter of months. Both had to take a step back in level, but my feeling is that within a one to two year time frame, they will both be back up to a level where they left off before their career breaks.

Time Out of Tax
The longer you take out of the tax market, the higher the risk of not being able to get back in. Tax is an area which is constantly changing, and so the landscape can look very different if you haven’t been around for, say, 3 years. If however you decide to go off travelling for 6-12 months, and cannot arrange unpaid leave with your employer, then getting back into a new job on your return shouldn’t take too long, depending on the underlying demand in the market on your return. This latter point is key - if you had decided to go trekking in the Himalayas for 12 months at the point when Enron collapsed, you may have found a few more ‘closed doors’ on your return. In fact given the current nervousness in the financial markets, now may not be the ideal time to take a (short) career break.

Practice vs Industry
Depending on your role and tax experience before the career break, you may be looking at a route back into a tax team within the professional firms, or into an in-house tax role. If your previous experience has been largely corporate tax within industry, then you will undoubtedly find least resistance to finding a role back in industry. If however you have grown up within a Big Four corporate tax team, for example, then you could look at roles within both practice and industry. If you have taken a long career break (18 months or more) then instantly stepping back into a professional firm could be more difficult, as there is more of an emphasis on being technically up to date and conversing fluently with clients on complex tax matters. Industry can be less concerned about technical know-how, with the emphasis being on practical tax accounting skills, and to be able to communicate and connect well with senior finance and business heads in the group. Things like interpersonal skills and commercial maturity will hopefully not wear off, and indeed may improve, through taking a career break.

Getting back in – some tips
• Closely review new roles appearing on tax job sites and the tax press, for example etaxjobs.com, taxcareersonline.co.uk and taxation-jobs.co.uk and respond to those that closely match your prior technical experience
• Apply for interim roles e.g. 3-6 months tax contracts in industry, requiring your prior technical experience. This will get you back up to speed with some of the tax rules, and could possibly lead into a permanent role
• Use your network – contact ex-bosses and colleagues to see if they can point you to a route back in. They may have heard of roles in the market, and your ex-boss my offer you a job again, should you be happy going back to the same employer
• Keep in close contact with recruiters – if there is now a gap on the CV because of a career break, then making it onto a shortlist for a role will be more difficult. You need to be regularly picking up the phone to them, keeping on their radar for when new roles/contracts come up
• Do some technical reading to find out which areas of tax have mostly changed in the time you have been away. This will not help to get you interviews, but ultimately will show in the interview that you are making efforts to get back to speed

Extra holidays - impact on business

The introduction of eight additional days’ holiday entitlement could have serious consequences for some businesses.

That is the warning from the Forum of Private Business (FPB), which is concerned that firms that do not currently give their employees 28 days’ paid leave every year will have to take cost-cutting measures to cope with the changes.

The government has published new regulations to boost the minimum holiday entitlement from 20 days a year to 24 days from October 2008, and to 28 days from April 2009. All part-time workers will be entitled to the extra holidays pro rata.

The FPB’s Research Manager, Rebecca Leavers, said business owners will not just be hit by the cost of finding cover for employees on leave. ‘Although it is true that there will be a substantial cost for some firms in terms of reduced productivity or finding extra cover for workers on leave, the impact on smaller businesses doesn’t end there,’ she said. ‘There is also the administration of such a change – contracts will have to be rewritten, for example.’

The Government claims businesses would benefit from reduced absenteeism and a more motivated workforce – but Ms Leavers is reserving judgement.

‘Many employers, who have a good relationship with their staff and actively promote flexible working, and the health and safety of employees in the workplace, still suffer from absenteeism,’ she says.

SG comment - what the above article does not reveal is that the proposed 24 and 28 days would include bank holidays, so I don't think this has major shakes. Not sure about other sectors, but all tax professionals I see have a minimum of 20 days holidays plus bank holidays, so the above proposals won't really change anything.