Finance Professionals Are Receiving Largest Salary Increase In 10 Years

There is no doubt that it’s a good time to be a finance professional. Salaries and benefits are increasing at a faster rate than many other departments, and the current skills gap means that there are lots of open positions looking for professionals with experience.

To top it all off, executives are looking to advance finance employees within the company and provide them with flexible working options to retain them. Reports show that these are some of the most important categories that employees look at in order to navigate the ongoing tough economic times and markets.

Let's go over the statistics of salary raises for finance professionals of the past few years:

2021

2021 was a great year for finance professionals in terms of opportunities and salaries. Finance professionals gained an average 4.4% base salary increase in 2021, which is a full 1.5% higher in comparison to the previous year.

The Association for Finance Professionals (AFP) Compensation Survey was conducted in February, 2022 and is based on data from 1,910 financial professionals compiling data in relation to total compensation earned during the 2021 calendar year. In addition to the positive salary increases, other changes and challenges were highlighted in the survey:

Benefits and Bonuses

The increase in salary encompasses both executives and staff, with a 4.3% and 4.5% gain respectively, averaging to an overall increase of 4.4%. Benefits for finance professions of all types were abundant in 2021, with over 95% of businesses providing dental and health insurance for their employees.
Continuing the trend of health benefits, 58% of employers offered paid maternity and paternity leave. This is the first time since AFP began tracking paid paternity leave that new fathers were offered this benefit in the same capacity as new mothers.
Bonuses were another category that stood out in 2021. 69% of organizations awarded bonuses to their employees, and although the percentage is unchanged from 2020, the bonus amount was higher than previous years.
Executive-tier finance professionals stood out as receiving the largest annual bonuses, with an average of $68,494 per executive. This was an increase from $61,555 that was given in 2020, and averages out to 35% of their base salary.
Lastly, was the benefit of career advancement, in which 79% of respondents cited increased job responsibilities throughout 2021. Although there are numerous factors that influence an employee's potential for promotion, increased job responsibilities is the primary criteria for upward mobility in the workforce. Fifty-two percent of the respondents indicated their contribution to the organization’s profitability impacts their upward mobility.

2022 -2023

2022 was similar to 2021 and even surpassed it in terms of salary raises. The AFP conduced a survey in 2023 regarding salaries and bonuses from 2022 and into 2023. The AFP Compensation Survey included 1,408 treasury and accounting professionals and participants were grouped into one of three categories: staff, management, and executive.

Researchers found that the average 2022–2023 salary increase across all groups was 5%. Management-level professionals received the largest base salary increase of 5.3%, whereas line-level staff received the lowest increase of 4.8%. Executives fell in the middle with a 5% increase.

In addition, 70% of organizations represented in the survey awarded employee bonuses.

Even on the "lower end" of the scale, a survey from The Conference Board found that budgets for employee salary increases have grown by an average of 4.4% in 2023, the highest increase in more than two decades, according to a long-running survey.

The US Salary Increase Budgets, which has been conducted annually since 1985, also found that the 409 companies surveyed are forecasting another 4.1% increase in 2024. The 2023 increase is the largest since 2001.

2024

While the final numbers haven't been released yet, the salary increase for finance professionals from 2023 to 2024 is expected to outpace inflation (more than 5% increases) and be higher than many other industries as well.

Overall, the higher the position (CFO, VP Finance, etc.) the higher the salary increase. But this also depends on how they get paid - meaning it's common for CFO's and high level managers to receive compensation in bonuses and shares in addition to their base salary.

CFO Salary Benchmark graph showing average annual salary by job title from Spendesk

This is following the overall trend that shows strategic and experienced leaders are being rewarded more while the opposite is true for beginner jobs in finance. In junior positions or those with only a few years of experience, there is increased competition for a smaller amount of jobs and more and more talk of AI and automation reducing the number of roles.

Interestingly enough, according to the Salary Benchmark report, the FP&A Manager role received the biggest salary increase. Salaries increased by almost 25% for this position from 2022 to 2023 and a further 10% from 2023 to 2024.

Challenges

The economic challenges of 2020 and 2021 didn’t spare finance professionals, and although salaries and bonuses were raised, an abundance of challenges were highlighted in the survey.

In 2021 and 2022, the biggest challenge, cited by 44% of respondents, was related to the employee shortages and difficulties of those few years- more specifically, recruiting, personnel issues, and staffing. The sheer volume of work was the second biggest challenge at 40%, which was directly followed by limited resources (39%).

While organizations had a difficult time recruiting employees, the Great Resignation was felt very strongly in finance departments. In fact, over two-thirds (68%) of respondents said that employees at their organizations resigned from their jobs in the past six months of that time period!

This wave of employee resignations didn’t come without its reasons. Dissatisfaction with compensation and benefits was cited by 51% of respondents as the primary reason for resignations, but the second largest driver of employee resignations is even more worrisome.

Almost half (47%) indicated that employees resigned due to experiencing burnout and seeking a greater work-life balance. This was echoed in a recent survey titled CFO: No Way Home in which it was found that 48% of CFOs said manual processes reduce their time spent with family and friends. The survey was conducted by leading FP&A software solution company Datarails, which looks to solve this issue by automating financial reports and helping finance teams reach their full potential without burning out.

Moving forward in 2025

Since then, the challenges have shifted from talent shortages to focusing on AI and automation. This means that the focus and power has potentially shifted from the employees to the companies themselves. However, this is yet to be seen how it will play out in 2025, and it will be interesting to follow whether the beginner finance jobs will actually be reduced or if the AI hype isn't as advanced as many people believe.

Either way, high level finance manager and CFO salaries are expected to increase into 2025, with the focus shifting to leadership and strategy.