Overview
Barclay Simpson analyse the salary data that accumulates from the placements we make in the UK. This provides a useful guide to the trend in salaries for internal auditors.
In the first table, base salary is the average accepted by internal auditors securing employment through Barclay Simpson. No allowance is made for any benefits other than company cars, which are valued at £5,000. The numbers are averages for the UK and reflect salaries ranging from £18,000 to in excess of £100,000.
The percentage salary increase represents the average salary increase achieved by internal auditors who have changed position and is based on the same data as base salary. The averages are weighted by the percentage increase achieved by individual internal auditors rather than total salaries. The average hides substantial variances and should not be viewed as typical.
Graph 1 – Average salaries
| |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
| |
|
|
|
|
|
|
|
|
| Base salary |
£39,435 |
£40,924 |
£42,434 |
£44,715 |
£47,035 |
£49,439 |
£51,584 |
£53,629 |
| % increase on previous year |
6.2% |
3.8% |
3.7% |
5.4% |
5.2% |
5.1% |
4.3% |
3.9% |
Graph 2 – Salary increases when changing job
| |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
| |
|
|
|
|
|
|
|
|
| % increase for people changing job # |
14.4% |
11.7% |
12.1% |
15.0% |
13.9% |
13.8% |
12.6% |
11.2% |
| RPI |
1.6% |
2.1% |
2.6% |
3.3% |
2.4% |
3.7% |
4.3% |
5.0% |
| Average earnings |
4.4% |
3.9% |
3.6% |
3.7% |
2.9% |
3.9% |
3.9% |
3.4% |
# Whilst the high percentage increase in base salary achieved by changing job might be more than expected, the increase in total package in the year immediately following a move, is significantly lower. The reason is the qualifying period in many companies to be eligible for both annual bonuses and salary reviews. Many internal auditors give up the possibility of impending bonuses and salary increases and may have to wait over a year to merit them with a new employer. We would estimate that this accounts for approximately 5% of the increase that internal auditors receive as a result of changing position.
2008 saw salary increases drop
The average salary accepted by internal auditors during 2008 was £53,629, a 3.9% increase on 2007 and broadly comparable to the overall increase in national earnings. However, the average salary increase achieved by internal auditors changing job dropped to 11.2%. This is the lowest it has been in recent years and follows a trend that has been established since 2004. Nevertheless, corporate costs during 2008 were closely controlled and, given the level of economic uncertainty, candidates were less interested in salary levels and more concerned about qualitative factors such as potential security of employment and career progression.
Outlook for 2009
If the normal patterns of supply and demand are followed, as the supply of internal auditors increases and the demand for their services falls, salaries as a factor of supply and demand, should fall.
In reality it is not that simple. The bargaining position of internal auditors is certainly going to weaken and the average salary that internal auditors achieve by changing job will fall. This will be combined with severe budgetary pressure as companies seek to reduce costs. Falls are likely to be mitigated by two factors:
- Those internal auditors who are employed, and whose job security is not under threat will have no need to accept a lower salary than they might do otherwise. In fact, given the economic circumstances, they may require an even bigger premium on their salary to compensate for the perceived increase in risk they are taking.
- Even though a candidate is unemployed, many companies do not necessarily wish to offer them the lowest salary that they might accept. They will be recruiting against established salary grades and will rightly want internal auditors to join who are motivated and who have not accepted just because they have no other realistic alternatives.
Outside of base salary, it is likely that discretionary bonuses, particularly those based on corporate performance, will fall. However, given the economic backdrop, many internal auditors will be pleased to get through 2009 with a secure job. The economy has entered territory that it has not been in for over 15 years.
Salary survey
Our salary survey is in three parts:
- Regional analysis with a survey covering salaries for newly and recently qualified MIIAs, ACCAs and ACAs.
- A wider perspective on the salaries paid to internal auditors who are not simply newly or recently qualified. We provide a number of different candidate profiles and the salary ranges they fall into.
- Salaries for Chief Internal Auditors.
1. Regional analysis
London
- Banking is by far the biggest employer of internal auditors in London
- In recent years, the high salaries and benefit packages offered in banking have not only attracted large numbers of internal auditors into London, but have also distorted the recruitment market. Many non-banking internal audit departments based in London have, in salary terms, not been able to compete.
- Outside of banking, London tends to be the base for the audit departments of British commercial companies such as leisure, retail and other trading groups, and the international and UK audit departments of non-UK multinationals.
- Salaries remain higher in London, primarily to compensate people for the cost of commuting in and around London in terms of time and money.
South East
- Outside of London, the South East has the largest and most diversified concentration of audit departments. To an extent it has benefited most from the migration away from Central London.
- The main geographic areas where internal audit departments tend to be based are the M25 corridor to the west and south of London and the M3 and M4 corridors.
- A drawback to the South East is the relative difficulty in commuting around it. Many companies are forced to pay almost as much as London salaries because the supply of staff within reasonable commuting time can be relatively low. In many respects Central London is a more logical location to base an internal audit department.
The West
- The West in internal audit terms stretches to Gloucester and Cheltenham in the North, and Bristol and Swindon to the South.
- The higher salaries that have historically been available were due to the relatively large number of financial services organisations and the possibility of commuting into London.
- However, rationalisation in financial services has reduced the number of opportunities in the area and salary differentials between the West and the Midlands have been reduced.
The Midlands
- Historically the most industrially biased region, the Midlands is becoming increasingly diversified.
- The greatest demand for internal auditors still comes from the many engineering and manufacturing groups that have their audit departments based in this region.
- The Midlands is, however, increasingly suffering from the same problem that afflicts the South East - commuting around it.
North West
- Probably the most diverse area outside of London and the South East, housing a large number of insurance companies and banks, together with a relatively high number of UK and foreign manufacturing and commercial organisations.
- The North West historically has been more commercially biased than the rest of the industrialised North and as a consequence is the home of some major internal audit departments.
North
- The North is split into two areas, Yorkshire and the North East.
- Neither of these areas has significant numbers of internal audit departments when compared to either the North West or Midlands.
- West Yorkshire, though, is home to a large number of financial services organisations, with Leeds in particular increasingly developing as a financial services centre.
- However, when compared to the North West, the North is a far smaller and more narrowly defined market.
Scotland
- Scotland is becoming an increasingly significant region for the employment of internal auditors.
- Outside of London, Edinburgh, which is also the seat of government for Scotland, has become the largest financial services centre in the UK with the consequent opportunities and salary inflation for internal auditors.
- Whilst the Strathclyde and Fife regions host a variety of companies with small teams of auditors, by far the greatest concentration of audit departments can be found in Lothian.
- Up to five years ago salaries for internal auditors in Scotland were significantly less than within the rest of the UK. This is no longer the case.
Newly and recently qualified MIIAs, ACCAs & ACAs
Chart 1 - MIIAs
| |
£000's |
| |
Lon |
S/E |
West |
Mid |
N/W |
Nth |
Sct |
| Newly qualified with commercial experience |
37-43 |
35-39 |
31-37 |
31-36 |
31-36 |
30-36 |
31-37 |
| Newly qualified without commercial experience |
33-39 |
31-37 |
27-33 |
27-33 |
27-33 |
27-32 |
27-32 |
| Qualified + 2/3 yrs PQE with commercial experience |
43-49 |
40-45 |
36-41 |
35-41 |
35-41 |
35-38 |
35-41 |
MIIA candidates are split between those without commercial experience; i.e. coming directly from the public sector, and those already working in the private sector.
Chart 2 - ACCAs
| |
£000's |
| |
Lon |
S/E |
West |
Mid |
N/W |
Nth |
Sct |
| Part 2 |
31-37 |
30-36 |
27-32 |
25-32 |
25-32 |
25-31 |
25-31 |
| Newly qualified |
39-47 |
37-43 |
33-39 |
31-38 |
32-39 |
30-37 |
30-38 |
| Qualified + 2/3 yrs PQE |
47-53 |
43-49 |
39-43 |
37-42 |
38-43 |
36-41 |
36-41 |
Chart 3 - ACAs
| |
£000's |
| |
Lon |
S/E |
West |
Mid |
N/W |
Nth |
Sct |
| Newly qualified |
46-55 |
43-49 |
38-43 |
37-43 |
37-43 |
35-41 |
35-41 |
| Qualified + 2/3 yrs PQE |
50-66 |
48-60 |
41-52 |
44-50 |
44-50 |
42-48 |
42-48 |
2. Different levels of experience – 15 candidate profiles
To provide a wider perspective on the different types of internal & computer auditors who may be seeking employment, this section takes 15 candidate profiles and provides an approximate salary range that they could realistically expect to achieve.
The candidate profiles are for good rather than exceptional individuals and take no account of other benefits that normally accrue to internal & computer auditors, primarily company cars in industry and commerce, and non-contributory pensions in financial services. Nor do they take account of non-contractual bonus or profit sharing arrangements.
| |
London |
South East |
Rest of UK |
Auditor
Qualified PIIA with internal audit experience gained with an external provider of internal audit services. |
£25-30,000 |
£23-29,000 |
£20-26,000 |
Internal Auditor
Unqualified multi-site auditor with a high level of field audit experience. |
£26-34,000 |
£26-34,000 |
£22-27,000 |
Internal Auditor
Partially qualified accountant of graduate calibre, with experience in the private sector. |
£30-36,000 |
£28-34,000 |
£25-32,000 |
Senior Internal Auditor
MIIA qualified, with internal audit experience in the Civil Service. |
£36-45,000 |
£32-38,000 |
£30-36,000 |
Senior Internal Auditor
Graduate qualified CIPFA with experience gained in local government. |
£34-41,000 |
£33-39,000 |
£28-36,000 |
Internal Audit Manager
Unqualified multi-site audit manager with a high level of experience. |
£40-46,000 |
£40-46,000 |
£29-45,000 |
Computer Auditor
Qualified QiCA / CISA with 3 years computer audit experience in Big 4 risk management services. |
£45-54,000 |
£43-50,000 |
£42-47,000 |
Senior Internal Auditor
Qualified accountant with experience that includes some exposure to internal auditing in a Big 4 firm. |
£48-54,000 |
£44-50,000 |
£38-44,000 |
Senior Internal Auditor
Qualified MIIA with internal audit experience in the public sector and private sector. |
£49-54,000 |
£46-51,000 |
£42-47,000 |
Senior Internal Auditor
Qualified accountant, with at least 3 years internal audit experience gained in a Big 4 or commercial firm. |
£52-58,000 |
£46-52,000 |
£41-47,000 |
Internal Audit Supervisor
Qualified ACA with experience in either a Big 4 risk management services department or a commercial internal audit department. |
£54-60,000 |
£52-58,000 |
£41-52,000 |
Senior Computer Auditor
QiCA / CISA qualified, with a high level of experience in various IT positions followed by significant experience in computer auditing. |
£58-66,000 |
£54-60,000 |
£49-57,000 |
Computer Audit Supervisor / Manager
Qualified ACA with computer audit experience. |
£63-70,000 |
£55-63,000 |
£53-60,000 |
Computer Audit Manager
QiCA / CISA qualified graduate, with significant computer audit experience. |
£65-78,000 |
£59-68,000 |
£55-63,000 |
Internal Audit Manager
Qualified CCAB / MIIA with experience in both Big 4 risk management services and internal auditing. |
£67-74,000 |
£62-68,000 |
£57-64,000 |
3. Chief Internal Auditors
The salaries of Chief Internal Auditors are difficult to provide precise guidance on, as they vary considerably, not only between different sectors, but between similar companies in the same sector.
Consequently we have broken the data out into different sizes of company (small, medium and large) and different regions (London, the South-East and the rest of the UK) to give as good a salary indication as possible.
The graphs provide estimates of the proportion of internal auditors with the appropriate skills and experience, who, other things being equal, would be attracted purely on the basis of salary, not including cars, bonuses and all other benefits, which, at Chief Internal Auditor level, can be considerable. As an example, a small company in the Rest of UK, if it were to offer a salary of £90,000, could reasonably expect 80% of appropriate individuals to be interested - at £60,000 only 30%.
In our experience, if seeking to fill a role, a company should look to attract around 80% of the potential candidates and price the role accordingly.
Chart 1 - Small companies, i.e. Top 500 Plc or equivalent
| |
London |
South East |
Rest of UK |
| |
% |
% |
% |
| |
|
|
|
| £50,000 |
- |
- |
10 |
| £60,000 |
5 |
20 |
30 |
| £70,000 |
15 |
25 |
35 |
| £80,000 |
45 |
55 |
65 |
| £90,000 |
60 |
75 |
80 |
| £100,000 |
75 |
85 |
95 |
| £110,000 |
90 |
100 |
100 |
| >£120,000 |
100 |
100 |
100 |
Chart 2 - Medium sized companies, i.e. Top 250 or division audit manager of Top 100 Plc or equivalent
| |
London |
South East |
Rest of UK |
| |
% |
% |
% |
| |
|
|
|
| £60,000 |
- |
10 |
20 |
| £70,000 |
10 |
20 |
30 |
| £80,000 |
30 |
40 |
50 |
| £90,000 |
40 |
50 |
60 |
| £100,000 |
60 |
70 |
80 |
| £110,000 |
70 |
80 |
90 |
| £120,000 |
80 |
90 |
95 |
| >£130,000 |
90 |
95 |
100 |
Chart 3 - Large companies, i.e. Top 100 Plc or equivalent
| |
London |
South East |
Rest of UK |
| |
% |
% |
% |
| |
|
|
|
| £80,000 |
10 |
20 |
30 |
| £90,000 |
20 |
30 |
40 |
| £100,000 |
30 |
40 |
50 |
| £110,000 |
40 |
50 |
60 |
| £120,000 |
50 |
60 |
70 |
| £130,000 |
60 |
70 |
80 |
| £160,000 |
70 |
85 |
90 |
| >£180,000 |
90 |
95 |
100 | |
|
|
