Any company, whether it’s the small bakery down the main street or a Fortune 500 company, needs to make money in order to operate. To make money, it needs to spend money in the way of inventory, equipment, supplies, facilities, training, salaries and more.
This makes finance critical to the success of any business. The financial managers of this world are tasked with ensuring the financial health of a company, driving business strategies and plans forward. Excellent financial decisions made by a qualified individual will ultimately increase the value of a business.
Financial management is very closely related to accounting – accountants will collect, and present financial data and then financial managers take this data from financial statements and other information prepared by the accountants and make financial decisions for the company.
Nowadays, particularly in the challenging South African economy, most companies are faced with reduced budgets available for salaries, often combining the functions and responsibilities of two related or similar roles into one. This is generally done to save on costs of hiring two individuals where one can be capable of performing within a dual position.
We are seeing this come to light more with financial managers being required to be qualified CAs or management accountants in order to be able to perform the functions expected of both – gather the data, present it in the form of statements, budgets, cash flows etc. and then take that information, analyse and interpret it, and make strategic financial decisions for the business.
Financial managers’ main responsibility used to centre around monitoring a company’s finances, but now they are increasingly expected to do more data analysis and advise senior managers on ways to maximise profits, improving the bottom line and initiating cost savings in a very competitive and challenging market.
With such augmented responsibilities, how then do companies justify the apparent lower salaries they are offering to potential new financial managers with CA qualifications?
In the South African Salary Survey for 2019, the range of salary for a financial accountant (CA) is between R650 000 and R750 000 per annum, with an average of R700 000 per annum.
The range of salary for a financial manager is between R850 000 and R1 200 000 per annum, with an average of R1 025 000 per annum.
However, in a survey done online, taken with a search run on financial managers in the market in Gauteng and the available jobs advertised, the following data was noted:
The search criteria for financial managers in Gauteng were within the following parameters:
|Experience required||7-10 years of relevant experience, including about 3-4 years of managerial experience|
|Qualifications||Qualified CA with completed articles with either an Honors or Master’s degree in an accounting science or related science|
|Sample of candidates||340|
|Job title||Finance/financial manager|
|Current salaries||R850 000 to R1.2 million PA|
|Salary expectations||R1.25 million to R1.5 million PA – these allowing for growth, not lateral movements – and in line with job responsibilities|
|Offered salaries||Maximum of R850 000 PA and in coastal areas, R720 000 PA|
Financial managers, who are also CAs, have invested their time and spent a great deal of money in obtaining those degrees and accreditations with bodies like Saica, so why should they not be rewarded with the salaries to accompany their experience and their qualifications when they are considered for hiring by a potential employer?
Why are they undervalued when they are instrumental in guiding the business’s long-term strategies and plans aimed at achieving the goals that have been set?
Surely the rules of supply and demand in economics should be in play – there is a high demand for excellent financial managers in a struggling economy where competition is rife; the supply of financial managers in the market with specific qualifications and desired experience, is far less, the higher price for this resource should undoubtedly come into effect.
Where the critical success of a business is leveraged on the decisions made by financial managers, companies should be investing wisely in the right candidate and for the right salary. That’s the only way companies will attract the right people to assist them in attaining business goals and high value, ensuring they maintain competitive positioning and longevity.
When you hire a professional on this basis, you get what you pay for – the right candidate with the right skills and experience, coupled with the qualifications to make critical financial decisions that will see a company grow, maintain its stature within a very pressured economy and allow it to achieve its goals i.e. to stay in business, to make a profit and to provide the dividends it promises to its stakeholders.
“Hiring a professional will cost you a bit more than the average candidate, but can you imagine the cost of hiring an amateur in this sort of role? It extends way beyond a salary, to the facts that poor financial management could lead to business failure in its entirety.”
“Think about these things when you are seeking a new financial manager with “all the bells and whistles” and make sure the salary you are offering is justified and ensures that the person is valued for their critical role in the ultimate success of the business.”
Chantelle Smith is a recruitment specialist at HR Company Solutions.
The views and opinions shared in this article belong to their author, cannot be construed as financial advice, and do not necessarily mirror the views and opinions of Moneyweb.