Richard Chambers, CIA, CGAP, CCSA, CRMA, shares his personal reflections and insights on the internal audit profession.
If you are looking for a job in the internal audit field, I have good news: Despite everything you may have heard about economic uncertainties and a looming “fiscal cliff,” the internal audit job market is heating up. According to our Audit Executive Center’s Pulse of the Profession
survey of 545 chief audit executives and internal audit directors, about a fourth of internal audit groups expect staff levels to increase in 2013, and 71 percent expect staffing to remain steady. These are the strongest results we've seen in years, and I believe it's a reflection of the value that audit committees and management are placing in having a strong, well-resourced internal audit function.
The Audit Executive Center’s 2012 Internal Audit Compensation Study also reflected good news. Significantly more employees are receiving salary increases this year compared to the past several years. According to the survey, the number of U.S. organizations awarding raises to their entire internal audit staff increased from 60 percent in 2011 to 64 percent this year. In both the United States and Canada, a larger percentage of internal auditors are receiving salary increases than non-auditors. In Canada, 83 percent of participating organizations gave raises to all their internal auditors this year — a five-year high for the country.
More internal auditors are receiving job offers and raises; however, the economy is still slow, and it can stretch internal audit budgets thin to award salary increases across the board. When compared to last year, the magnitude of many raises decreased, with fewer internal auditors having received a salary increase greater than 3.9 percent. Possibly this is one of the justifications for higher budgets in the coming year. According to the Pulse of the Professionsurvey, the largest percentage of internal audit departments since 2008 (41 percent) are anticipating an increase in their resources in the coming year. Fifty percent said they expected budgets to remain stable, and only nine percent expect budgets to drop.
For auditors wanting to boost their salaries, knowledge is power. In the United States, Certified Internal Auditors (CIAs) earned an average of $26,500 more per year than those without any professional certifications according to the Compensation Study. Canadian internal auditors also reported significantly higher median incomes than their noncertified counterparts. Our vice president for professional certifications, Cyndi Plamondon, tells me that this finding has been consistent for years. We believe that it’s because employers recognize that professional certifications — especially the CIA — demonstrate an individual’s competence, knowledge, and ability to perform as an exemplary internal auditor.
The participants in the two surveys were all from North America, but based on what I have seen in other surveys and in my recent travels, I am convinced the trend toward more employment and higher starting salaries is global. In the United Kingdom, for example, a 2012 salary survey by Michael Page Finance and Page Personnel Finance states that salaries are increasing in nearly all areas of internal audit and that specialized skills such as joint venture auditing or commodities are attracting premiums. According to the survey report, “The focus on controls and good governance is as important as ever… demand for the top talent is strong.”
Like the United Kingdom survey, the Compensation Study indicated that internal auditors with specialized skills have more earning power. Internal auditors specializing in IT; fraud and forensics; or environmental, health, and safety audits are earning higher salaries than those who perform financial, operational, or compliance audits.
A majority of audit coverage in 2013 will be focused on nonfinancial risks such as operations, compliance, and IT – outpacing coverage of financial risks three to one. There is a corresponding trend towards “rebalancing” internal audit staff expertise toward a broad set of skills that does not necessarily center on accounting or finance knowledge; therefore, many employers are seeking specialized skills, specific industry experience, business acumen, and communication skills rather than a traditional accounting background.
While the recent news is good for job seekers and for other colleagues currently negotiating pay increases, there can be a downside as well as an upside to the newest employment trends: Employers know that finding and retaining internal audit talent is likely to be increasingly difficult during the coming year. Fortunately, several recent surveys shed light on what prospective employees are seeking. Career development, job rotation, and flexibility can help to attract or retain talented employees, but heavy travel requirements, inflexible schedules, and long working hours can be turn-offs to many prospective internal auditors.
The implication is that, while 2013 is promising to bring about positive opportunities for internal auditors, audit executives need to ensure both that travel schedules are designed to consider work-life balance and that their teams are positioned for ongoing success. Come to think of it, that’s probably good advice for audit executives in any type of job market.