Compensationomics: Latest salary trends and
key priorities for Sr. Finance Executives
Presented by Andrew Reina, Managing Director
Monday, March 14, 2011: Track One is from 1:45 – 2:35 PM
Learning objectives
Upon completing this workshop, you will be able to:
• Understand how the current economic environment is shaping the
workforce of today.
• Examine the latest salary and compensation trends for Sr. Finance
Executives.
• Discover the latest salary negotiation strategies and best practices
• Learn what employers are focused on and the key strategies that they
should implement to maximize company performance and results.
• Realize the importance of talent retention and leadership
2
Today’s agenda
• Who is Ajilon Finance, a part of Accounting Principals?
• How have salaries and compensation impacted the workforce?
• What does the current Sr. Finance Exec Comp look like
• What are some best practices and pitfalls in negotiating your salary?
• Why is Talent Retention Critical?
• Top 10 Takeaways
3
Our featured presenter
Andrew Reina,
Managing Director
Ajilon Finance
4
About Ajilon Finance, a part of Accounting Principals
• Ajilon Finance and Accounting Principals are joining together to help companies
looking for top accounting and finance talent achieve their goals more effectively
than ever before.
• Our combined industry experience and proven recruitment expertise make us
the authority in the world of accounting and financial recruiting.
• Global leader in talent recruitment and contract professionals for full spectrum
F&A positions including:
- CFOs
- Audit professionals
- Controllers
- A/P & A/R specialists
- Tax Experts
- Financial Analysts
- Accounting Managers
- IFRS specialists
- Staff Accountants
- Financial Reporting Professionals
5
The Alligator Pool
What “Alligators” are at your doorstep in 2011?
• Sharp increases in financial reform & regulatory compliance
• Greater Board of Director emphasis on Risk Management
• Extended responsibilities and areas of influence
• Greater Voluntary Turnover
• Continued SG&A scrutiny
• Increased M&A Activity
• Poor Employee Morale
• Shrinking Margins
7
Today’s agenda
• Who is Ajilon Finance, a part of Accounting Principals & our Speaker?
• What is the current outlook?
• How has the role of the CFO changed?
• What does the current Sr. Finance Exec Comp look like
• What are some best practices and pitfalls in negotiating your salary?
• Why is Talent Retention Critical?
• Top 10 Takeaways
8
Confidence in the Marketplace
HOW MANY OF YOU FEEL MORE CONFIDENT IN OUR ECONOMY?
HOW MANY OF YOU BELIEVE WE WILL SEE A STRONG REBOUND THIS YEAR?
HOW MANY OF YOU BELIEVE YOUR JOBS ARE SECURE?
HOW MANY OF YOU THINK YOU WILL LOOSE SOME KEY PLAYERS ON YOUR TEAM?
HOW MANY OF YOU BELIEVE YOUR COMPANY HAS A STRONG RETENTION AND
RECOGNITION PROGRAM?
9
Today’s reality…Recovering. Restructuring. Retooling. Rebuilding
confidence. Renewed Leadership.
• Employers are continuing to be cautious on making permanent hires, but adjusting
accordingly to build up their talent pipeline
- U.S. unemployment rate is at 8.9%, the lowest since April ‘09 (February ’11)
- Non-farm job increased to 192,000 and private jobs increased 222,000
- Since September 2009, more than 495,000 temporary and contracting jobs
have been added
• Financial services sector landscape continues to change and evolve with new
regulatory and compliance rules
• All major U.S. financial indices were up by the end of 2010
- Dow Jones Industrial = 11.02%
- NASDAQ = 12.78%
- S&P = 16.91%
10
How does the latest compliance and risk impact today’s Sr.
Finance professional…more alligators in the pool?
• When the Dodd-Frank Wall Street Reform and Consumer Protection Act passed, it was
the single largest overhaul of the U.S. financial regulatory system since The Great
Depression
• Financial services affected by the Dodd-Frank Act must implement various new
standards and procedures
• Mortgage lenders, student-loan companies and payday-loan firms, will be subject to an
increasing number of examiners that will probe and investigate when necessary
• Section 404 of SOX requires publicly-traded companies that generate more than 75
million USD to not only assess the quality of existing internal controls but allow thirdparty auditors to review findings
• For many small-to-mid-size organizations, the compliance and risk concerns are
understandable as many do not have a risk management executive on staff
11
Job Growth Outlook for 2011
• Predicting an
estimated 2.4 million
private sector jobs will
be created this year.
• 2011 has the potential
to be the best year for
private job growth
since the 90s.
Source: http://globaleconomicanalysis.blogspot.com
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Snapshot of key metropolitan unemployment (in January ’11)
Las Vegas
Miami
Los Angeles
Detroit
Atlanta
San Francisco
St. Louis
Seattle
Chicago
Cleveland
Philadelphia
Houston
New York
Dallas
Baltimore
Milw aukee
Boston
14.9%
11.8%
11.7%
11.1%
10.2%
9.9%
9.4%
8.8%
8.7%
8.5%
8.4%
8.3%
8.2%
7.9%
7.5%
7.3%
7.1%
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Today’s agenda
• Who is Ajilon Finance, a part of Accounting Principals & our Speaker?
• What is the current outlook?
• How has the role of the CFO changed?
• What does the current Sr. Finance Exec Comp look like
• What are some best practices and pitfalls in negotiating your salary?
• Why is Talent Retention Critical?
• Top 10 Takeaways
14
30,000 Ft - The Role of CFO & Sr. Finance Executives
The Good News:
• The role of the CFO is stronger than ever!
• Job Growth is Assured
• Unemployment in Minimal
• Baby Boomers are Retiring
• Finance is still the bedrock of a company
The Bad News
• The nature of the people who will become a CFO has changed
• Bean counting is out
• Quantitative Analytics, Project Management, Decision Science & Investor
Management
• Thought the Controller was your competition…think again
- GM, VP of M&A, Strategic Planning, FP&A
Top CFO Trends
• The Strategy Paradigm
- Sr. Finance leaders are being held accountable to create and implement
strategy initiatives and assist in identifying new areas of revenue growth
- Bean counting is out…strategy is in.
• Focused Attention on Talent Retention
- Although unemployment remains high, Finance & Accounting unemployment
remains very low at under 6%
- Financial leaders who focus efforts on retaining talent will experience an
accelerated recovery.
- “On-demand” staffing models are becoming the new norm as CFOs are looking
for flexibility in labor expense and workflow requirements
Top CFO Trends (continued)
• Expanding Empire
- Sr. Financial professionals are expanding their levels or responsibility to
unprecedented areas
• IT, HR, Procurement, Marketing, Operations, etc
• The CFO Organizational structure is growing
• A new dawn in regulatory reporting
- Financial and regulatory scrutiny is creating concern among various segments
including Financial Services, Healthcare and International firms.
• SG&A Sustainability
- CFOs are looking at additional areas to sustain cost efficiency. This includes
policy & procedure reviews, looking at business outsourcing and implementing
new ERP and Productivity enhancement tools.
Today’s agenda
• Who is Ajilon Finance, a part of Accounting Principals & our Speaker?
• What is the current outlook?
• How has the role of the CFO changed?
• What does the current Sr. Finance Exec Comp look like
• What are some best practices and pitfalls in negotiating your salary?
• Why is Talent Retention Critical?
• Top 10 Takeaways
18
Salary Trends 2010 – Senior Finance Executives
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Alternative Compensation areas and consideration
A study conducted by Lee Hecht Harrison examined what employees wanted and expected in their
next job. These findings, from those looking for work, can be applied to those who are currently
employed as well.
Employee programs/benefits
Compensation package
Want
Expect
Heath club membership
58%
8%
Flex time
57%
24%
Company car
53%
13%
Technology (e.g. laptop, cell, etc.)
52%
58%
Career development programs
46%
53%
Ongoing training opportunities
41%
70%
Tuition reimbursement
40%
46%
Child care
32%
4%
Concierge service
31%
2%
Want
Expect
Stock options
65%
30%
Signing bonus
61%
10%
Annual bonus plan
54%
60%
Base salary that exceeds
48%
16%
Pension plan
47%
58%
401(k) plan
42%
87%
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Today’s agenda
• Who is Ajilon Finance, a part of Accounting Principals & our Speaker?
• What is the current outlook?
• How has the role of the CFO changed?
• What does the current Sr. Finance Exec Comp look like
• What are some best practices and pitfalls in negotiating your salary?
• Why is Talent Retention Critical?
• Top 10 Takeaways
21
Best practices in negotiating your compensation (1 of 2)
• Think about the big picture
- Companies are under immense pressure to cut cost. You want to make
sure your company can afford to increase your salary.
- Look at what your peers are making in similar industries to ensure you are
inline with your position’s salary range.
• Know your worth
- Be confident and know the value you bring to your organization.
- Discuss your past performance and how that has aided in your company’s
success
• Be open to new opportunities
- Sometimes a change is required in order to move up in the ranks.
22
Best practices in negotiating your compensation (2 of 2)
• The Conversation
- The discussion should not start off with, “I deserve this because.” If your
ego is playing into the discussion your superior will take offense and will
stop listening.
• Practice, Practice, Practice
- Negotiating your salary is a lot like an interview. You need to rehearse the
discussion and be prepared for any and all questions. Go to the
discussion with your list of why a raise makes sense.
• Money isn’t everything
- Although an increase in salary is nice to have, it could be just as nice to
negotiate stock options or alternative compensation.
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8 Negotiating Strategies that are critical
•
Delay salary and benefit negotiations for as long as possible in the interview process.
•
Don't negotiate at the time the initial job offer is made. Thank the employer for the offer and express your
strong interest and enthusiasm in the job, but state that you'll need time to evaluate the entire
compensation package.
•
Do your research. The greatest tool in any negotiation is information. Make sure you have done a
thorough job of determining your fair market value for the job you seek, the salary range of the job for this
specific employer, and geographic, economic, industry, and company-specific factors that might affect the
given salary.
•
Just do it. You don't have to be an expert negotiator to get a sweeter deal; you just need to know the rules
and strategies of negotiation.
•
Always ask for a higher salary (within acceptable limits) than you are willing to accept so that when the
employer counters your proposal, the salary should be near your original goal.
•
If the salary you're offered is on the low end -- and the employer has stated that salary is not negotiable
(probably because of corporate salary ranges or pay grade levels), consider negotiating for a signing
bonus, higher performance bonuses, or a shorter time frame for a performance review and raise.
•
When presenting a counter-proposal to the employer, be sure and include a few benefits that are
expendable so that you can drop them in as a concession to the employer as negotiations continue.
•
Never stop selling yourself throughout the negotiation process. Keep reminding the employer of the
impact you will make, the problems you will solve, the revenue you will generate. And continue expressing
interest and enthusiasm for the job and the company.
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The Do NOTS in Negotiating Comp
•
Don't feel pressured to divulge a specific figure. Instead, indicate you are "open,"
"negotiable" or "competitive" during your discussions.
•
Don't give the employer an actual figure if you are asked directly about the salary you want.
Instead, turn the question around and ask what salary range would be offered in the
company for this type of job for someone with similar years of experience, level of expertise
and knowledge of the business
•
Don't let your current salary limit your viewpoint of what you're earning potential might be. If
your research shows that the industry is paying more than your were being paid, hold out for
this higher amount and remind the interviewer of your qualifications and experience
•
Don’t just focus on salary. Do look at the entire compensation package
•
Don’t enter salary negotiations as part of an ego trip or part of a game.
25
Alternative Negotiation Considerations
Base salary
Stock purchase incentives
Sign-on bonus
Payroll deductions-401 (k)
Individual
performance bonus
Company
performance bonus
Commissions
Keogh plan
Cost of living
increases
Pension plans
Earlier salary
review
Matching investment
programs
Profit sharing
Stock options
Vacation time
Health benefits
Gas allowance/
company car
Parking
Educational tuition
refunds
Seminars/training
Mass transit
expenses
Expense account
Professional
association dues
Legal assistance
Airline frequent
flyer mileage
Comp time for late
hours/
weekend work
Severance package
Career transition
assistance
CPA or tax assistance
Cell
phone/Blackberry
Flexible hours
Pre-retirement
planning
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Today’s agenda
• Who is Ajilon Finance, a part of Accounting Principals & our Speaker?
• What is the current outlook?
• How has the role of the CFO changed?
• What does the current Sr. Finance Exec Comp look like
• What are some best practices and pitfalls in negotiating your salary?
• Why is Talent Retention Critical?
• Top 10 Takeaways
27
Engagement & Retention: By the Numbers – Recent key stats
• According to our recent survey, compared to the end of 2008, the
percentage of Gen-Y workers looking for a new job in 2010 has more than
doubled (from 14% to 30%).
• Breakdown of those who plan to go on (or already have gone on) a job
interview as the economy begins to recover:
- 51% of Gen-Y workers
- 30% of Generation X workers
- 29% of Baby Boomers
- 22% of workers aged 61 and over
• Harvard Business Review (May 2010) and Conference Executive Board
stated the following:
- 33% admits to not putting all their efforts into the job
- 25% intend to leave within the year.
- 20% believe that personal aspiration are quite different from the
organization’s
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How much is that Turnover Really Costing you
Consider the following categories of cost to replace just one employee and hiring another if not
carefully managed.
Pre-hiring and On-boarding Costs
Hiring Costs
• Search firm / contingency fee
• Lost productivity costs
• Recruitment costs
• Overtime cost for co-workers
• Advertising costs
• HR support costs
• Hiring bonus costs
• Train cost for new hire
• Relocation costs
• Cost of co-worker during training
• Temporary help costs
• Project or design delays costs
• Testing, reference & verification
paperwork
• Management costs (interviews,
orientation, on-the-job training,
etc.)
+
• Opportunity costs
• Socialization costs (e.g. travel)
• Potential lost of client/s
=
Total True
Cost of
Turnover –
Normally 125%
to 150% of the
Salary
• Employee referral bonus
• New employee’s higher salary
29
Engagement & Retention: By the Numbers – Quit Level Has a
Direct Correlation With Consumer Confidence Index
Color Legend
= Quit level
= Conference
Board Confident
Index
Source: BLS
30
Engagement & Retention: Best practices
• Determine if there is a retention issue, specifically the voluntary turnover may
be hurting your business.
• Uncover to see if departmental management issues are causing consistent
turnover.
• Analyze any recent turnover patterns and find out who is actually leaving and
possibly where…especially for your critical talent.
• Gather critical data using employee surveys, exit interviews and focus groups.
• Benchmark other companies within your industry
• Systemically review your internal retention management program regularly to
ensure up-keeping
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Today’s agenda
• Who is Ajilon Finance, a part of Accounting Principals & our Speaker?
• What is the current outlook?
• How has the role of the CFO changed?
• What does the current Sr. Finance Exec Comp look like
• What are some best practices and pitfalls in negotiating your salary?
• Why is Talent Retention Critical?
• Top 10 Takeaways
32
Top 10 Takeaways
• The economy and consumer confidence levels continue to see
improvement…FINALLY!
• The Role of the CFO & Sr. Finance Exec has become more strategic and much broader
in scope…expand those soft skills and understand IT
• CFO Compensation is rising but be reasonable when negotiating
• Flex Time and Health Club memberships rank as the 2 largest employee “Wants”
• Extensive due diligence is critical before any comp discussion…know your market
value, competitor rates, industry trends, major accomplishments & overall company
guidelines
• Money isn’t everything, consider alternative forms of compensation
• Implementing a retention program is mission critical especially in a recovering
economy and as the talent war heats up.
• Turnover is a true cost and effects the bottom-line more than most know.
• Leadership is being recognized more than ever before!
• And the # 1 Takeaway….
• Alligators are all around you, be careful where you step and don’t get pushed in the
pool!!
Conclusions