by Owen Firth CA, CEO, FinanceMark

What does the employment market for Finance Professionals look like for 2008?  Will the ridiculous imbalance in supply and demand ease off?

Well, the good news is, we believe it will.  But it is likely to be only a limited improvement, driven by slight easing in demand, towards the second half of 2008. 

Macro and Micro Trends

There are signs at macro and micro levels that the very high demand for finance people will slow down to some extent this year.  At a high level, there are poor results coming out from blue chips, tightening access to credit, some distressed businesses (that were darlings of the market up until recently), concerns about the US economy and so on.  To some degree, the continued strength in the resources sector is masking softer performance in other sectors. 

At a micro level, we have started to see some belt tightening and restructuring within Australian corporates for the first time since 2001-02.  If this continues, there may be a flow on effect to SMEs and other B2B businesses that support those corporates.  There is also evidence that continued interest rate rises domestically are starting to have an impact on consumer spending which will impact B2C businesses.

Specific Trends in Finance

At the same time there are some specific trends within Finance that will ease demand compared to recent years.  For example, some of the major drivers of demand for Financial Accountants, like the adoption of AIFRS and SOX, are now mostly maintenance issues for many companies. 

Investments in sophisticated reporting tools (eg TM1, Cognos, Hyperion, etc) has made reporting and analysis more efficient, requiring fewer Management Accountants and Business Analysts.  Resources in this area are generally the first to be impacted when business growth or profitability slows down, as they are often seen as non-critical positions.

At the junior end, the supply of Graduates and Assistant Accountants has shown signs of improving already, however the increased volume is impacted by issues with English communication skills evident in an increasing proportion of candidates at this level.  The drive to shared services and off-shoring over the past 3 to 5 years will limit some new demand for support roles in AP and AR in particular.

The credit squeeze and market nerves will potentially tighten the purse strings of private equity and VCs, which would dampen start-up, growth and IPO activity, key drivers of demand at the CFO level.  Any flow-on effects of US instability and the potential slow down domestically in non-resource sectors would further reduce new senior finance roles that would otherwise result from growth. Reduced senior opportunities and uncertainty typically results in less movement of more risk averse senior Finance people.

The main positive light at the senior end, barring a quick economic turnaround, is the impact of the ageing population.  The increasing rate of retiring senior finance people may reduce the impact of the other trends.

In Summary