Accounting and HRIS/Payroll Quarterly Industry Update
Discussing Consultant Trends and Industry insights from January – March 2021
Archway Recruitment Accounting and HRIS Payroll division specialises in supporting organisations in the Government, Not-for-Profit and Private sector – whether they be Large or SME in size – with their recruitment requirements. We have an experienced team based in Wellington with plans to establish teams in our Auckland and Christchurch offices.
Our next quarterly update looks at hot topics from the first quarter of 2021 and predictions for the future along with new news that is hitting our industry and its impacts on recruitment.
Covid19 continues to restrict candidates within New Zealand.
With a vaccine now approved and distribution kicking off to frontline workers the move back to some sort of normal is still considered to be in the distant future. The roll-out will still take months to complete and all indications suggest that it may be some time before our borders and immigration policies return to what they were prior to Covid. Processing times are still taking vastly longer than “normal” – residency applications have been taken significantly longer to process and we have noted several candidates reporting two to four months processing time to transfer visa sponsorship between roles which is jeopardizing recruitment processes. This is leading many existing “local immigrants” to be very reluctant to apply for new positions in such an uncertain environment. Whilst many individuals on a one year work visa have received extensions these have often been extended by only six months – likely in an attempt to “plug a gap” and with consideration for our hospitality industries who are particularly hurting from a lack of candidates in the market. Therefore, these minor extensions have done little to alleviate the pressure on the candidate market within the Accounting and HRIS/Payroll community.
Furthermore, whilst some hope the Trans-Tasman bubble may offer a glimmer of hope to the candidate short market there is also a significant risk that many candidates who had returned home from Australia due to Covid19 investigating the possibilities to return back. We have already seen some returning due to the housing situations in Auckland and Wellington and it would not be a surprise to see others consider this option, even for recent CA grads who are seeking alternatives to the great UK OE based on some conversations we have had.
For those that remained overseas during the height of the pandemic – most notably those in the UK – the roll out of vaccine means most intend on staying for an extended duration providing their visa status allows/workplaces sponsor them. Having rode out 12 months of lockdowns many intend to enjoy the Northern Hemisphere summer at the very least prior to returning.
The Big Four are Hurting
The Big Four firms have felt the impact of Covid particularly significant as they are feeling the pinch of the lack of talent worse than many others. The models for these businesses have generally been configured in such a way that most candidates leave after completing their CA or after one more year to attain a Manager title and remove their bonding. Grad recruitment has been consistently decreasing, and when there have been skill shortages at a Manager+ level the organisations have often utilised their global business to give secondees opportunities to live and work in NZ – particularly from South Africa, Asia and the Sub-Continent.
The last 12 months has already put significant pressure on the workforce in these firms as they work to support their clients through the pandemic, and the heaped pressure has increased workloads on the existing staff. This increased pressure takes its toll as increasing numbers of staff look to exit the firms seeking other opportunities and the ability to backfill has become increasingly challenging – not only is there a lack of local talent but given the global circumstances secondees from overseas are no longer a viable option too. This means that the existing workload is piled on those remaining in the team, and as further teammates resign the pressure continues to escalate. At one firm this escalated to breaking point recently as four Audit Managers quit on the same day. In response we have seen some Big Four firms start enforcing two-to-three-month notice periods at Manager level.
The flip-side of this is that in such a volatile environment there is tremendous opportunities for those who remain with unprecedented acceleration of individuals careers being seen, with some candidates reaching Supervisory and/or Audit Lead roles after only two years of service. This is enough to incentivise some to remain in the Big Four, however as recruiters we’ve experienced many are eyeing the market for external opportunities.
Therefore, if you’re an organisation looking to attract Big Four talent there will seldom be a better time to tempt a candidate to leave. If you’re a Big Four employer it is an important time to consider how you can retain your employees through these times and if there are any additional benefits and/or entitlements you can offer to your staff to help support them through a challenging period.
First proposals for Holidays Act 2003 revision met with critical response from many Industry Professionals
The proposed changes to the Holidays Act have so far been met to a lukewarm response from professionals in the industry. Whilst it does address some of the compliance issues and changes to sick/bereavement leave and carry over of leave in the case of change/transfer of business these are being warmly welcomed most seem to see it as a missed opportunity, either because it doesn’t tackle to issues fully or formalise employer’s entitlements to accessibility of sick, bereavement, leave in advance etc.
Regarding the Holidays Act compliance many feel that the fundamental compliance issues and especially the retention of leave being calculated in ‘weeks’ is seen to be an incredible oversight. I am told that the leave calculations in weeks may be particularly challenging for employers who have employees who have adopted nine day fortnights. Many have said that whilst these changes were also supposed to streamline leave payment calculations that the four formula approach which is being recommended is overly complex and increases the burden on the payroll team. It is worth pointing out that the payroll working group engaged with this process had raised concerns that these issues weren’t being addressed so the fact that they weren’t is noteworthy.
Some employers have also indicated concern that they feel that the negotiated Act is configured in such a way that those that have the best conditions through the 2003 Act are not in a worse position than previously, and therefore most people will have a considerably improved set of conditions to be in line with them with associated costs carried on to the employer. Also, the removal of the wording of “gross earnings” to “all cash payments received, except direct reimbursements for costs incurred” is considered to be particular of concern and may have significant ramifications on the employer. Depending on the employer’s appetite for these additional costs there is a worry that this may have detrimental impacts on their employees or consumers of their products/services.
Contractor vs. Fixed Term
Across both Accounting and HRIS/Payroll there was a battle of wits seen last year as many organisations demonstrated a reluctance to pay contractor rates and encouraged workers to transition on to Fixed Term Contractors. Whilst some did accept FTC opportunities, many did not, and for those who refused to budge on their rates they are now seeing the spoils.
Within the Accounting industry especially the benefits are being seen for contractors with some reports suggesting that your more basic Financial and Management Accounting contracts are paying 30-40% more than what they were prior to Covid due to lack of available talent. HRIS/Payroll has returned to pre-Covid contractor rates.
With significant experience and networks across the accounting and HRIS/payroll industry, we know our stuff. Are you a candidate considering a new role or employer looking at making a placement?
Contact Sam Dick if you’re an employer or employee within Payroll and Finance and would like to find out more about how Archway Recruitment can help you!
