22 Jul Market outlook: the future for jobs and work
Flexible working was a ‘nice to have’ six months ago, but COVID-19 has given it pole position in business strategy and planning. And that won’t change as the crisis fades, writes Ed Heffernan.
We can be sure of very few things in the next 12-18 months. Right now, some fundamental changes are happening in the world of work – changes both in the jobs market itself and in the way we work. In Barden, we have a few predictions for you about precisely that.
What will the jobs market for accountants be like in the year ahead?
In the short-term, people will work harder. Companies will be reluctant to replace headcount in finance or hire additional finance people, for a while at least. That means the current workload will be shared among the team that is now in place. This will likely result in a higher workload per person, but it may also offer a more diverse mix of activity in finance roles (which could be positive if approached and managed correctly).
The market has shifted from candidate-driven to client-driven. Supply will, for a time, exceed the demand and this will have an impact on salaries. We predict that wages will drop by roughly 5% in the next 12 months, but are unlikely to drop much further. The majority of accountants are still gainfully employed and will continue to be remunerated at pre-COVID-19 levels. Good accountants are less likely to move for less money. Bonuses and salary increases for 2020/21 are very likely to be put on ice in most companies. And don’t expect salary reviews in the next 12 months to be as favourable as those in 2019.
Candidates will also have to work a little harder and be a little more flexible when looking for a role. With less demand for people, candidates will have fewer options and must, therefore, be less prescriptive in their job search. They will need to be flexible when it comes to trading variables such as location, salary, the nature of the role, the kind of employment (more on that below), the type of business and so on if they want to advance their careers externally in the years ahead.
Contract roles will rebound faster than permanent roles. As with all previous recessions, the jobs market will rebound first through contract positions, followed by permanent roles. Why?
Contract roles represent a temporary commitment/spend and are therefore easier to get approved in an uncertain market.
Contract roles are often a “must hire” to cover key personnel during maternity/paternity leave.
Project work associated with finance business process transformations to drive efficiency (and ultimately lower costs) are often recruited for on a contract basis.
Many roles that are usually permanent will be recruited on a contract basis initially and, assuming improved trading conditions, will ultimately be made permanent (which has the knock-on effect of reducing the number of permanent roles that come to market). The value of contract roles for ambitious people should not be underestimated in the months ahead.
While a near full recovery is predicted by many for 2021/2022, the jobs market for accountants will lag slightly behind as many companies will invest in direct revenue-generating recruits first (sales roles, for example) and indirect revenue-generating recruits second (such as accountants). It will take some time to return to a normalised jobs market, but the astute finance professional that spends this time wisely will position themselves well for when that time comes.
How will work, work in the future?
First, flexible working will become more normalised. At a basic level, people will likely have more flexibility on start and finish times (staggered working patterns), more flexibility when it comes to working between the office and home, and more options to structure their working week to suit themselves (four-day weeks, condensed working hours, or a 40-hour week but work when you want, for example). Wider adoption of flexible working will have enormously positive effects on how life and work interact, as well as productivity.
Second, companies will re-think how they view the connection between job and location. Right now, these things are synonymous – a financial controller role in the New York office, for example. In the future, the two may not be so tightly connected – a financial controller role supporting the New York business, for example. In this context, flexible working enables remote working within the business itself. If companies are happy for their people to work from home, does it matter where that home is?
This thinking has both opportunity and risk for accountants in Ireland. The danger is that this thinking further enables the relocation of jobs to lower-cost locations. The opportunity is that this thinking might enable talented, sought-after people to choose where they live first, and what company and role they want second. If a highly skilled statutory accountant lives in Waterford, they may be no longer limited to jobs in their immediate vicinity; they could take a role previously held by an office-attending person in Dublin – or London, for that matter. The blurring of the connection between job and location is not a new concept, but the adoption of remote working policies has the potential to bring it to a whole new level. This shift could see Ireland change from a local jobs market to a global jobs market, which would have enormous and far-reaching consequences.
And third, there will be a shift in the tools we use every day. Companies will need to invest in infrastructure, security, and team working tools to both enable and make the most of this new flexible working landscape. Expect the continued proliferation of virtual meeting technology and its rapid advancement to virtual reality meeting technology. Expect a complete reorganisation of recruitment and onboarding processes to accommodate this new approach to working. Expect home office set-up costs to become a part of benefits packages. Expect the creation of HR functions to accommodate, monitor, and enhance flexible working processes. Expect all this, and a whole lot more.
The future of work will not look like the past, but with change comes opportunity; opportunity for those willing to embrace change.