New payment technology – a legacy of great change in finance

By Katy May

Katy May joined Marks Sattin as part of the Change Management team in July 2011 with a specific focus in Operations Change. Prior to this she has worked within the Financial Services industry for 4+ years building extensive relationships with Front, Middle and Back Offices across financial institutions within London, Spain and Portugal. Her background and experience lies primarily within the Fixed Income and Derivatives space, although she has built a good knowledge base across all asset classes, trade flows and operational processes. 

It’s not only British athletes who are looking to leave a lifelong legacy at London’s 2012 Olympic and Paralympic games – games sponsors Visa and Samsung are striving to use their mobile payments technology for the sporting event to leave a lasting legacy in the market for banks, retailers, mobile operators and consumers. But what impact will their efforts for long-term change in the way we use mobile payments and the efforts of suppliers of other new payment methods alike, have on banking and payments?

Challenging the establishment

By Michael Mosley

At the start of 2010 it was claimed (once again) that this would be the ‘year of the boutique’. When this failed to materialise, the Bulge Bracket Banks once more held aloft the mystical figures that saw off these up-start challengers, ‘the rainmakers’.

The rainmakers have for sometime been the defining feature of the Bulge Bracket Banks with their ability to bring work to the M&A team, their ability to make or break a bank’s year and some say their ability to walk on water.

But nothing lasts forever and the Bulge Bracket Banks have stopped asking themselves a simple question. A question every firm should ask themselves about revenue generating staff - what if they left? The answer…5%.

SME's up their game with fresh optimism at the fore

By William Archer 

William Archer is the Marketing & Communications Manager for the Institute of Financial Accountants and the Federation of Tax Advisors. 

As we approach the end of 2011, many of us are starting to look hopefully towards 2012 as a year of growth and renewed optimism within the UK economy.  According to the Institute of Financial Accountants, ‘the big voice for small businesses’, skills, development and talent are moving up the agenda for small businesses as quickly as they are for large businesses.  And as large businesses step up hiring activity, SMEs are set for a battle to attract  and hold onto the best financial professionals and are becoming increasingly pre occupied with recruitment and retention. 

The Bribery Act - An Opportunity Window for Auditors?

By Jordan Marsh

Jordan Marsh is a consultant of the Professional Services team at Marks Sattin.He currently recruits accountancy professionals throughout the Yorkshire region. For more information about accounting and finance roles in Yorkshire, please do not hesitate to contact the Professional Services team at Marks Sattin, by clicking here.

 

To fight the extant threat of corruption that is tarnishing the reputation of and casting shadows over the business world, a new piece of legislation was introduced by the coalition government earlier this year. The Bribery Act[1] 2011, was brought into force on 1^st July 2011.  

Under this act, the Serious Fraud Office has the power to prosecute both individuals and companies (UK and foreign owned) for offering or accepting bribes. Companies may also be liable to legal action if they fail to prevent the incidence of bribery and/or are found to be abetting to acts of bribery.   

The introduction of the Bribery Act[1] 2011, has put the UK government at the forefront of global efforts to tackle unethical business practice, and demonstrates the importance of Corporate Governance in today’s business world.

However, no additional requirements have been made to the statutory audit and external auditors will be required to assess and comment on companies’ procedures in greater depth, with paperwork no doubt increasing twofold. So in retrospect,  the Act may well benefit the accounting profession and those looking for work in that sector because companies will be compelled to spend more time, money and resources on compliance as a result of this new legislation.

According to the Financial Reporting Council[2], firms registered to carry out statutory audit work decreased significantly between 2004 and 2009 as an upshot of the audit threshold being increased.  With  fewer organisations requiring audit work, there was also a considerable drop seen in the  number of young finance professionals qualifying for accredited accountancy bodies, and a scarcity of available qualified staff ensued. Consequently, there has been a significant increase in audit fee rates.

Given these circumstances, audit candidates who have a good knowledge and understanding of the Bribery Act are likely to stand a far better chance of obtaining jobs with reputable accountancy practices in the current economic climate. Expertise in this area will give a candidate competitive advatage and differentiate them from the rest of the talent pool - it will demonstrate to prospective employers that they have a commercial awareness and a genuine interest in the industry which they are seeking to venture into.

So, despite commentators painting a rather gloomy picture of  'auditors' career prospects, there will always be audit job vacancies in the market place, and candidates who train towards their professional qualification within audit roles will find that they are very much in demand after they qualify.

Skills such as legal awareness and analysis  of accounting procedures (derived from newly acquired audit based skills) will stand you in good stead for jobs in consulting, transactional services, forensic accounting and corporate finance as well as audit work itself.

 

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[1] Bribery Act 2010

[2]  The Financial Reporting Council, Professional Oversight Board, Key facts and trends in the accountancy profession, June 2010

 

Marks Sattin is a leading specialist financial recruitment company, with offices in 7 countries around the globe and over 150 consultants. With over 20 years of proven recruitment experience with some of the biggest international brands in the market, Marks Sattin provides its employees with a lively and fast-paced work environment where hard work and dedication are generously rewarded. 

How Will the Basel III Accord Affect the Banks?

On September 12th 2010, the Basel Committee endorsed the next piece of their master plan. Having originally released details on July 26th 2010, the Basel III Accord was revealed and aspired to once again make the banking system safer by putting measures in place to avoid a repeat of the “worst recession in over 100 years” (Ed Balls, Shadow Chancellor).

The Basel II Accord was originally introduced in June 2004 to ensure that savers’ money was protected and that banks had a bit of a cushion to absorb unexpected shortfall from the potential inability to repay loans. Basel III was constructed using the same three-pillared framework, but was developed following the credit crunch. It strengthens the bank’s capital requirements and introduces new regulatory requirements on liquidity.

Basel III looks to define new capital target ratios, or the amount of ‘ready’ capital a bank must have. Other changes include the increase in transparency, quality and consistency of the capital base. The new regulation states that banks must have available capital equivalent to 4.5% of assets. There is an additional requirement of 2.5% which is in place to withstand future stress.

The second major change from Basel II is the additional strengthening of the capital framework’s risk coverage. This includes strengthening the capital requirements for counterparty credit exposures, by raising the capital buffers to allow for these exposures. All the changes are in a bid by the committee to encourage the banks to raise their own capital buffer in times of a good economy, so they can be called upon in more troubled times.

Following the crisis of 2009, the banks are now working much closer with the regulators to ensure that it is not repeated. But, in reality, how will the banks and their recruitment processes be affected by the introduction of the Basel III Accord?

The long-term benefits speak for themselves: an estimated net benefit for European banks of 30% of GDP, equivalent to 10 trillion Euros. This prediction by UK economists comes on the back of the sizeable buffers that the new Basel mandates all major banks have at their disposal.

Having said this, the short and medium-term problems cannot be ignored. While the big banks are no longer ‘able to fail’, the IT implications and integration costs and resources threaten to drive down the financial sector’s profits.
 
Although the capital requirements are being introduced gradually, the scale of the change that banks will have to go through cannot be underestimated. Barclays are in the process of raising £3.3bn in order to cover the costs of Basel III – some of which will be used to cover the capital requirements, but a large amount will be spent on retraining and recruiting qualified staff. 

The next piece in the Basel jigsaw will surely lead to increased hiring levels to accomodate the changes.


Oliver Gale is a Change Management Consultant for Marks Sattin.

Corporate Advisory

Looking back on 2010, the general trend witnessed across advisory services was one of an unpredictable market. The pressures of a global downturn, a General Election and bad weather inevitably meant that businesses moved cautiously; 2010 was most definitely a year of peaks and troughs.

Towards the end of 2010, and certainly within the first quarter of 2011, confidence in the market has improved. There has been increased activity within corporate recovery, insolvency, forensic accounting and corporate finance. A fresh excitement seems to have entered the market and this has had a huge impact on recruitment.

Forensic clients are definitely feeling optimistic about this year, although 2010 was a reasonable year within the London Forensic world. There were, of course, points in the year when activity was concentrated on pitching for new work and initial investigations, but the decision to litigate was being held back. This was coupled with the fact that a number of government agencies were holding back work until the new fiscal year. Although this would have ordinarily caused caution, it was balanced by the fact that financial services work increased.

Moving into 2011, we continue to see clients recruiting for increased FS and Fraud work. There seems to be an appetite for AML, FS and Fraud experts alongside the usual Forensic, Valuations and Investigations applicants. Clients have reported that there is a lot more litigation work happening. A good sign that the market is becoming busier is that some clients have been proactively recruiting recently qualified auditors to train within Forensic Accounting.

The Insolvency and Restructuring world saw peaks of activity. There was a marked increase within the restructuring world; some teams were working to full capacity last year. Towards the second half of the year there seemed to be a lot of lender led, Business Review and restructuring work. This has of course meant we have seen an increased need for experienced restructuring candidates.

Clients have recently been recruiting at all levels; from newly qualified to director level. The insolvency world had some very busy periods in London but there seems to be a lot less trading administration work. November and December were quieter than usual.

The first quarter of 2011 indicates that the insolvency world is picking up. A number of firms have been busy in investigations and formal insolvency. It is felt that with the Tax Year end and the quieter-than-expected Christmas results in the retail market, the formal insolvency world will be busier this year.

All indicators suggest that clients are preparing for a busy 2011 – we have already seen firms recruiting across the board.



Shaila Verma is an Executive Consultant within the Marks Sattin Practice Division, specialising in Qualified Corporate Advisory Recruitment. She has successfully recruited for senior appointments both in C&I and Public Practice and has over 10 years’ financial recruitment experience.

What’s the Going Rate for Freelance Accountants?

Freelance accountancy rates are squeezed while finance remains an attractive sector for freelancers and temps.

Twice a year I get to crunch all the numbers that come out of all the data we hold on our systems for umbrella contractors. The trends that are uncovered always throw up some useful stats and lead to some interesting conversations around the office.

The findings have shown that the average hourly rate for umbrella contractors has fallen in the last 12 months from £34.41 to £33.12; however, contractors over 35 are typically £10 an hour better off than their younger counterparts.

The accountancy sector remains an attractive sector for contractors, temps and freelancers; the average hourly rate remained slightly above average at £33.16. However, this time last year the average hourly rate for accountancy temps working via an umbrella company was £35.36. So freelance accountancy professionals are feeling the squeeze just like everyone else.

The study also found that:

• Greater London and the South East remain the best places to contract in the UK based on hourly rates, with both regions seeing slight increases. Rates in Greater London have risen from £36.16 to £36.88 and in the South East from £36.64 to £36.74.
• The lowest average rates can be found in the East Midlands (£25.81) followed by Northern Ireland (£27.25) and the North West (£28.64).
• The Oil industry enjoys the highest average hourly rate at £90 followed by Construction (£59.50), Finance (£48.37) and Healthcare (£45).

In contrast to the rest of the UK’s labour markets, the study suggests that rates do get better with age for freelancers. The average rate in the 25 to 33 year-old category is £28.68, compared to £37.09 for 35 to 44 year-olds and £37.21 for those aged 45 to 54.

You can attribute the drop in rates to the state of the UK economy; however, it’s hard to explain why there’s a gender gap in umbrella contracting. Many industry commentators often put it down (rightly or wrongly) to factors such as women taking a break from their career to have children. I’m not so sure this stands up in the profession and it definitely doesn’t in contracting. Surely a hirer is engaging a contractor because they have a specific skill set and the going rate for that skill set is market led?

The age difference is perhaps more straightforward. The older a contractor, the more experience they have and this is reflected in the rates they can command as they secure more senior roles. So unlike the rest of UK Plcs, age appears to be a benefit for professional accountancy freelancers and contractors.

I firmly believe that freelancers have a massive contribution to make to the UK’s economic recovery. Over the last two months we’ve seen an increase in the number of contractors making enquiries with us, so prospects are picking up.


Rob Crossland is the Chief executive of the Parasol family of companies, which also includes ClearSky Accounting, and provides umbrella PAYE services to over 9,000 freelancers in the UK.

Just How Good or Bad is the Accountancy Job Market?

There is conflicting media evidence concerning the state of the UK job market. On the one hand, there are job losses in the public sector, but there are also promising signs that many new jobs are being created.

In my experience, there is now much more movement in the job market. People who have stayed in their jobs during the downturn are now feeling more confident about making a career move. This game of ‘musical chairs’ is creating many new opportunities for well-qualified accountancy and finance professionals.
          
My professional clients are securing new jobs more quickly than other occupations, as organisations have focused on cutting costs, increasing efficiencies and re-structuring their borrowings. Government spending cuts, including the knock-on effects in the education and health sectors, should sharpen demand for capable accountants.

I have always maintained that the government statistics and the data produced by recruitment consultants is misleading; some jobs can be found within the ‘hidden job market’ and can be accessed through networking. Many jobs lost in the banking, financial services and fund management sectors have been quietly replaced over the past three years.

To access the best jobs and to give yourself more choice in the opportunities open to you, you should use a combination of job-hunting tactics. It is worth considering which organisations you would most like to work for and create a target list of these. You should of course look at specialist job sites like GAAPweb, but also keep an eye on your target employers. 

Use recruitment consultants wisely, by being clear on what you want and what you can offer. Although some employers are side-stepping recruitment consultants, many continue to use them for specialist hires because they relieve them of the burden of sifting large numbers of candidates and give them more reassurance than taking a direct hire.

The job market remains solid for those who are prepared to look a little harder.



Simon Broomer is a Senior Consultant at CareerBalance Ltd.

The Effect of UK Visa Restrictions on British Business

The Highly Skilled Migrant Programme and its subsequent points-based replacement, the Tier 1 (General), has always provided a route for UK businesses to access the best international talent.

However, on 23rd November 2010, Home Secretary Theresa May announced that the Tier 1 (General) route will be closed effective of April 2011 in an attempt to place a limit on non-EU economic migration to the UK. A temporary cap is already in place. Replacing the Tier 1 is the ‘Exceptional Talent’ Visa, which will provide space for just 1000 individuals from a Science, Cultural or Sporting background, unlikely to stretch to Accountancy or Finance. The next best option for skilled overseas candidates is to apply for a Tier 2 Visa which will require them to gain sponsorship and a job offer from a UK company, or the Tier 5 which will limit their stay to 2 years. Even then Tier 2 Visas have been limited to 20,700 places per year themselves.

Many critics believe that these kinds of restrictions are particularly harmful when the state of the UK economy is still vulnerable and skills shortages are very much apparent. Businesses are particularly worried about losing key staff due to difficulties renewing their visas. A recent survey from the Chartered Institute of Personnel and Development (CIPD) and KPMG revealed that 17 per cent of UK employers have been unable to recruit non-EU migrant workers due to the temporary UK immigration cap. According to these figures, more than 52 per cent of the people moving to the UK with visas came from outside the EU.

The cap will have differing implications. Multinational institutions will find some peace of mind in that there are no restrictions imposed on intercompany transfers. Smaller companies and many public sector institutions such as the NHS, with 30% of their workforce born overseas, will not find this a possibility. Universities may have to cut jobs due to a fall in international enrolments and loss in fees. Monash University had to cut 300 academic jobs on the back of changes in immigration regulation in Australia in late 2010. Companies with sponsorship certificates set aside will sees these cut which may be detrimental with the proliferation of BRIC economies and greater emerging market talent.

Recruitment companies will be increasingly required to supply outstanding candidates as the demand for migrant workers increases and supply invariably drops. Certain finance contract markets such as Product Control, which is characterised by a high turnover of international professionals in particular, may see a rise in rates in order to secure international contractors from a smaller pool of talent. In general, agencies will need to keep better track of highly-skilled candidates, not just from abroad but from home as well.

Restrictions are likely to free up more jobs for British Citizens, but will this be at the cost of sourcing the best candidate for the job?



Craig Klessa is a Consultant for Product Control at Marks Sattin.

Why finance teams should break the mould of company complexity

In an increasingly complex world, the idea of simplifying business is an appealing one. Partner this with the publication of the Global Simplicity Index (GSI) recently – which has estimated that the world’s largest 200 companies lost $237 billion dollars collectively over the past year as a result of business complexity – and a desire for simplicity becomes a necessity.

The GSI is a joint work between Simon Collinson, Professor of International Business and Innovation at Warwick Business School, and the Simplicity Partnership, a management consultancy committed to simplifying the way that companies operate.
 
Together, they have calculated that ‘bad complexity’ within companies reduces profits (EBITDA) on average by 10.2%. However, the stage at which companies begin to destroy value as a result of their overcomplicated methods can be difficult to identify. Essentially, when a company grows it naturally develops processes which initially enable the company to flourish, but they inevitably reach a ‘tipping point’ whereby the benefits of additional complexity are outweighed by costs. Add this to pressing issues such as economic volatility, and the detrimental impact of complexity becomes ever more apparent.

Nevertheless, for large (and sometimes even small) companies who have become almost acclimatised to the complications of working life, it is difficult to identify what quantifies negative complexity. In their study, the Simplicity Partnership identified five main internal drivers of complexity: Products & Services, Strategy, People, Organisation and Processes. It is important, therefore, that companies review complexity more holistically than before. Although many companies have explored ways to reduce complexity from their processes, Simplicity Partnership argue it is unproductive to tackle complexity in this area alone.

So who should take responsibility for company complexity? The natural route would appear to be the finance department – not simply because monitoring company profitability is one of their key roles, but also as a result of the fact that the finance function is one of the few departments that has the luxury of working across the business. With attempting to increase company profits as the consistent bottom line for finance teams, it makes sense for them to also consider the detrimental effect that complexity may be having throughout the business. Indeed, when analysing companies, it was noted that some finance directors were taking up to four months out of every year in planning as a result of over-complicated scenario forecasting. It is actions such as these that truly demonstrate the pitfalls of excessive business complexity.

By tackling business complexity, the benefits could go beyond simply increasing profit margins. The founder of Simplicity Partnership, Melvin Jay, observed that “people don’t enjoy working in highly complex systems, they want to see the impact of their work – complexity is sapping morale”. Therefore, by identifying potential areas for simplification with the ultimate aim of increasing profits, it can easily evolve into equally beneficial changes for the company as a whole.

Ultimately, it is rational to suggest that in order to strive towards growth and increased profits, companies – finance teams in particular – need to look beyond the standard and assumed and assess the company as a whole. The myth that complexity signifies a highly advanced and functional business needs to be reconsidered. Instead, finance departments need to lead a culture of simplicity in order to see companies thrive.



Megan Evans is a Researcher for Trace Recruitment. Trace delivers senior finance recruitment briefs in industry, financial services and the third sector across London, the South East and Europe.