Internal auditors who possess specialist skills, accredited professional qualifications, and leadership and business acumen are in great demand — so much so that employers are willing to pay substantially more to attract and retain them. According to research by recruitment specialist Robert Half, internal audit salaries in the United States generally are set to increase by up to 4.2 percent in the year ahead, depending on the size of the organization they work for and their level of experience, among other factors.
This is welcome news given that the 2017 Internal Audit Compensation Study, produced by the Internal Audit Foundation, found that the number of auditors who did not receive a raise in basic salary increased last year, marking an end to a seven-year downward trend. The report found that some 15 percent of respondents did not receive a base salary increase last year — the highest proportion since 2011–2012.
However, internal auditors with specialized skills and in-demand certifications saw higher than average compensation packages — a trend that Robert Half says is likely to continue, at least in the near term. Two specific areas of expertise — information technology (IT) auditing and environmental, health and safety (EHS) auditing — were in very high demand by U.S. employers in 2016. IT auditors saw a median salary more than US$14,000 higher than generalist auditors, while those auditors who specialize in EHS received salaries worth US$17,561 more.
IT auditor salaries are being driven higher because demand for such expertise is outstripping supply. In fact, such a talent shortage is prompting audit leaders to implement initiatives such as rotational audit assignments as a way of growing IT audit skills in-house, according to internal audit consultancy Protiviti's latest Internal Auditing Around the World publication.
As for EHS skills, The IIA's 2017 North American Pulse of Internal Audit survey finds that EHS is a topic appearing on more than one-third (35 percent) of board and audit committee agendas, yet less than one-quarter (23 percent) of internal audit functions feel informed about such risks to the business. Once again, the increase in salary is due to the demand for skills outstripping supply.
In fact, it's a favorable jobs' market for those internal auditors with multiple specialist skills. The Compensation Study says that practitioners who possess experience and expertise in more than one field or specialization can generally negotiate higher compensation. For instance, the study found that U.S. auditors with four areas of expertise commanded an average median salary approximately US$45,000 higher than generalist auditors with just one area of expertise.
The Compensation Study also reports that employers are willing to offer higher salaries to internal auditors with in-demand credentials. The study found that the average median salary in 2016 for U.S. internal auditors with one or more formal qualifications was US$34,009 higher than the figure for internal auditors without any certification. Practitioners with credentials in particularly high demand, such as the Certified Internal Auditor (CIA) and the Certification in Risk Management Assurance (CRMA) designations, garnered even higher rates of pay in 2016, the Foundation reports.
But mixed with this positive news for the profession, the report also contained some negative findings. For example, internal audit leaders are neglecting to think about "soft skills" such as leadership, business communication, and relationship-building when recruiting candidates. Such skills are not just "nice to haves" — they are increasingly important and expected by management.
Furthermore, the Compensation Study says that employers are limiting their search for internal auditors to those with an accounting degree, rather than looking for potential candidates who might have other skills and experience that the organization could benefit from. For example, technology skills are often underrepresented in internal audit job descriptions, yet experience in areas ranging from big data to cybersecurity is desperately needed. Many employers also value knowledge of EHS risks and their potential impact to the business, yet often neglect to call this out in job specifications too.
The Compensation Study suggests that failing to include such details can result in an employer hiring candidates who meet outdated or incomplete requirements, and who cannot meet the skill needs and demands of the business in the future. This is especially worrying given that boards want internal audit to act more as a strategic partner and to demonstrate greater business acumen. For example, 64 percent of internal audit stakeholders interviewed for the 2015 Common Body of KnowledgeStakeholder survey, conducted by The IIA's Internal Audit Foundation and Protiviti, said that internal audit should have a more active role in assisting management and the board to assess and evaluate the organization's strategic risks.
According to the Compensation Study, internal audit leaders should take steps to help "brand" their departments as a place where talented internal auditors want to work. This would need to accommodate working practices that employees — particularly millennial workers — now come to expect more and more, such as remote work arrangements, flexible work schedules, the ability to maintain a satisfying level of work-life balance, and the opportunity to learn about other areas of the business.
Visit The IIA's website to learn more about the 2017 Internal Audit Compensation Study.