Inflation-busting pay increases and robust recruitment growth characterise this year鈥檚 Hays consultants鈥� salary survey. But employee discontent and ongoing skills shortages could deflate the widespread optimism
For many construction consultants, 2014 was a year of feast after the very protracted famine of the recession. That鈥檚 the message of the annual Hays salary survey, carried out in association with 黑洞社区.
2014 was the third year in a row that pay has increased. But the survey, which covers the whole spectrum of consultants from architects to technical surveyors, shows that growth in average salaries in the last 12 months exceeded the rate of inflation for the first time since the recession began, meaning consultants will finally be starting to feel that little bit richer.
So who are this year鈥檚 winners, what are the main problems this throws up for consultancies and how are firms responding to the resurgence in demand for labour?
Salary growth
The headline average rise in 2014 was 5.25%, but this healthy growth disguises some even bigger pay uplifts, particularly in those niche areas where skills shortages exist.
Structural engineers saw their pay rise by an average 12% to 拢31,417, with associates and seniors both experiencing pay hikes of 10%. Partners or directors in building surveying firms also benefited from the bounty of a rising market, recording average salary increases of 9% to 拢59,917, with their associate colleagues not far behind on 8%.
Even impoverished architects are getting in on the act, with an 8% average salary increase to 拢34,875. 鈥淭he civil and structural guys were always insulated against recession, but when the architects are coming back in salary growth, you know the market is back: it鈥檚 a real bellwether of where the construction market is,鈥� says Richard Gelder, director of Hays Construction & Property.
Exactly three-quarters of the consultancies surveyed by Hays reported that their salary bill had increased in the last 12 months. And these increases are likely to continue in the year ahead, with 71% of construction employers planning to increase salaries in the next 12 months, compared with 56% who were planning to do it in last year鈥檚 survey.
Gelder says the picture revealed by the survey reflects the upbeat atmosphere in the industry after Christmas. 鈥淭his time last year we saw the first big increase in January jobs that we had seen probably since the recession. Every January since the recession has been hard.鈥� But the latest set of figures point to a 鈥渟ustained change in the market鈥�, he believes. 鈥淭he new world of more demand and work is definitely here.鈥�
Matthew Patterson, director of reward at Atkins UK, says the company conducted its first full pay round in several years, an exercise he expects to see repeated this year. The evidence suggests the above inflation salary increases in the industry are being fuelled by a hiring surge. 2014 was, for example, the first year that architectural practices have recruited significantly since the crash.
And Hays鈥� survey shows that more than three-quarters (77%) of employers are planning to increase headcount in the coming 12 months. The vast majority of these plan to hire more permanent staff, compared to 58% who said this the previous year.
However, the overhang of five or six years of pay restraint will take time to tackle. In spite of inflation-busting pay increases reported by Hays, the majority of employees (65%) are dissatisfied with their pay. And two-thirds are planning to move jobs within the next 12 month in order to advance their careers. 鈥淕reater stability in the market means that people are willing to move jobs,鈥� says Bill Maynard, UK recruitment and resource lead at EC Harris, who estimates that the company has hired 515 new permanent staff this year, an increase of about 20%.
This story is backed up by Paul Newing, WSP鈥檚 UK head of HR, who estimates that the practice recruited 700 people last year and expects to see 鈥渟trong growth again next year鈥�. Patterson says Atkins currently has approximately 1,200 vacancies out of a total UK headcount of 8-9,000.
Demand for skills
The upsurge in demand means that the subject of construction skills shortages has reared its head again. The overwhelming majority (84%) of employers expect to encounter a shortage of suitable candidates over the next 12 months. 鈥淓very time we go into one of these peaks we go into the old debate about skills shortages, which is feeding through into some fairly chunky salary increases,鈥� says Hays鈥� Gelder. 鈥淎rchitecture is slightly better served for people coming through the pipeline, but there鈥檚 an absolute crisis in areas like building services and civils,鈥� Gelder adds. Patterson agrees that competition is particularly tight for engineers.
In some pockets of the industry, Gelder reports pay uplifts of up to 20%, although these tend to be where companies have had to assemble a team rapidly after securing a project. 鈥淲e鈥檙e seeing enough of this almost desperation buying to know that it鈥檚 a minor trend,鈥� says Gelder.
Laurence Brett, head of UK regions at Aecom, believes that the cyclical nature of construction means that there will always be peaks and troughs of demand for skills.
One answer, he suggests, might be to find ways of giving people skills that are sufficiently flexible so that they can work in other industries during downturns and then return to construction when the economic conditions are right. An example, he says, are building services engineers who have skills that can translate to manufacturing. Gelder says BAE has taken on such individuals at its Filton plant, near to Bristol.
In the meantime, many consultancies have increased their graduate training programmes. Patterson says Atkins is expecting to hire a record 350 graduate trainees in the UK, as well as 19 apprentices.
But hiring bright young talent won鈥檛 deal with the acute shortage of sufficiently experienced managers. Gelder says: 鈥淲e are seeing a pattern of people in key roles in organisations being paid quite big increases over and above inflation.鈥�
Ian Baily, a director of Artelia, recognises this picture. 鈥淩ecruitment is pretty difficult, not in terms of the number of people but the quality.鈥�
He identifies the hardest to recruit demographic are project managers or directors, typically in their late 30s to early 40s. Atkins鈥� Patterson agrees the individuals in greatest demand are those with managerial experience allied to technical ability. 鈥淲e are very much in a war for talent: everybody is looking for the same people,鈥� he says.
And the competition for these individuals isn鈥檛 just from traditional rivals, like contractors, he adds. The big management consultancies, which have branched out into construction in the wake of the financial crisis, are fishing from the same pool. One way of plugging skills gaps is of course to look for candidates from overseas. But this route has become more difficult in recent years as the government has tightened its visa restrictions, making it harder for firms to recruit from their traditional hunting grounds in old Commonwealth countries, like Australia and South Africa.
The industry is in ongoing talks with the government about loosening the visa restrictions on those with scarce construction skills. However, more immediately, companies are increasingly open-minded about candidates from elsewhere in the EU, who don鈥檛 face the same restrictions, believes Gelder. 鈥淚 would have bet my mortgage a couple of years ago that we would not have looked at candidates from the Continent - now people are cottoning on that there are some quite good people, and all of a sudden they are looking like a very attractive proposition,鈥� he says, adding that consultants are increasingly opening up offices in smaller EU nations such as Hungary, partly in order to ship out work.
And there is of course another source of overseas candidates: the UK nationals who left these shores during the recession in search of overseas opportunities. 鈥淚t鈥檚 more a trickle than a gush, but people are starting to come back because of the opportunities they see over here,鈥� says Gelder.
Pay rises and non-salary benefits
However, while staff may be disgruntled about pay, only 36% asked for a pay rise, Hays found. Gelder suspects many staff have recovered much of the ground that they lost salary-wise during the recession. With salaries having largely corrected, he doesn鈥檛 expect to see the same level of pay increases this year. Nevertheless, construction bosses are taking workforce issues a lot more seriously than they may have done during the recession when the only priority was often just getting the job done.
Firms are taking a closer look at what they can offer in terms of non-salary employee benefits, according to Hays, which says that just over half (54%) of the firms it surveyed are offering a pension that is better than they are obliged to provide under the government鈥檚 auto-enrolment legislation. Atkins, for example, has just introduced improvements to its pension scheme, offering matching contributions of up to 8% of salary to those staff who are prepared to put in more than 4% themselves.
The chief reason that workforce issues are rising up the boardroom agenda is the wider impact that salary bills will have on profits within businesses where salaries are the biggest cost. Patterson says this is an issue that firms must watch carefully. He says: 鈥淲e are a listed company so have certain obligations in terms of delivering value to shareholders. Increasing salaries will have an impact on profitability and rates to clients. Given that we are a consultancy, salary increases have quite a significant impact on the performance of the company.鈥�
Aecom鈥檚 Brett says: 鈥淵ou are delivering things now that you were selling last year so in the short term it has a minor impact on margins.鈥�
So far, the increase in labour costs is not feeding through into upward pressure on fees though, according to Artelier鈥檚 Bailey. But Brett believes consultants are being more selective about what they bid for. 鈥淲ith the amount of opportunities in the market place, it鈥檚 making us much more selective about bidding. There鈥檚 an element of picking your winners and not bidding where you don鈥檛 see the margins.鈥�
Consultancy bosses will hope that this increasingly discriminating attitude will finally lead to a turnaround in fee levels. In the meantime though, it looks like they will have to become ever more savvy about how they recruit and retain staff.
This week鈥檚 online poll
Will consultants鈥� salaries continue to rise rapidly in 2015?
Top salary increases
| Role | Average | % increase salary |
|---|---|---|
| Structural engineer | 拢31,417 | +12% |
| Associate structural engineer | 拢48,375 | +10% |
| Senior structural engineer | 拢38,333 | +10% |
| Environmental/geotechnical engineer | 拢28,375 | +10% |
| Partner/director building surveyor | 拢59,917 | +9% |
| Associate building surveyor | 拢46,042 | +8% |
| APC quantity surveyor | 拢25,125 | +8% |
| Architect | 拢34,875 | +8% |
| Associate quantity surveyor | 拢47,917 | +8% |
| Graduate structural engineer | 拢22,292 | +7% |
| Graduate quantity surveyor | 拢21,417 | +7% |
Structural engineers
| Associate | Senior | Engineer | Graduate engineer | |
|---|---|---|---|---|
| Greater London | 拢55,000 | 拢45,000 | 拢37,000 | 拢25,000 |
| South-east | 拢50,000 | 拢40,000 | 拢32,000 | 拢23,000 |
| East of England | 拢50,000 | 拢40,000 | 拢32,000 | 拢23,000 |
| East Midlands | 拢48,000 | 拢41,000 | 拢34,000 | 拢22,000 |
| West Midlands | 拢49,000 | 拢40,000 | 拢33,000 | 拢23,000 |
| North-east | 拢47,000 | 拢37,500 | 拢30,000 | 拢22,000 |
| Yorkshire and Humber | 拢48,000 | 拢38,500 | 拢30,000 | 拢22,500 |
| North-west | 拢48,500 | 拢38,000 | 拢32,000 | 拢22,000 |
| Wales | 拢49,000 | 拢39,000 | 拢30,000 | 拢21,000 |
| South-west | 拢48,000 | 拢38,000 | 拢31,000 | 拢22,000 |
| Scotland | 拢47,000 | 拢36,000 | 拢29,000 | 拢22,000 |
| Northern Ireland | 拢41,000 | 拢27,000 | 拢27,000 | 拢20,000 |
| National average | 拢48,375 | 拢38,333 | 拢31,417 | 拢22,292 |
| Average change 2014-2015 | 10% | 10% | 12% | 7% |
Environmental/geotechnical engineers
| Associate (Principal last year) | Senior | Engineer | Graduate engineer | |
|---|---|---|---|---|
| Greater London | 拢55,000 | 拢42,000 | 拢32,500 | 拢26,000 |
| South-east | 拢48,000 | 拢38,000 | 拢29,000 | 拢23,000 |
| East of England | 拢45,000 | 拢38,000 | 拢29,000 | 拢22,500 |
| East Midlands | 拢42,000 | 拢32,000 | 拢28,000 | 拢22,000 |
| West Midlands | 拢43,500 | 拢36,500 | 拢27,000 | 拢23,000 |
| North-east | 拢41,000 | 拢35,500 | 拢30,000 | 拢23,000 |
| Yorkshire and Humber | 拢41,000 | 拢35,500 | 拢28,000 | 拢22,500 |
| North-west | 拢48,000 | 拢38,500 | 拢30,000 | 拢23,000 |
| Wales | 拢40,000 | 拢35,000 | 拢29,000 | 拢22,000 |
| South-west | 拢43,000 | 拢35,000 | 拢27,000 | 拢22,000 |
| Scotland | 拢45,000 | 拢36,000 | 拢26,000 | 拢22,000 |
| Northern Ireland | 拢40,000 | 拢35,000 | 拢25,000 | 拢21,000 |
| National average | 拢44,292 | 拢36,417 | 拢28,375 | 拢22,667 |
| Average change 2014-2015 | 5% | 6% | 10% | - |
Architects
| Partner/director | Associate | Architect | Newly qualified, CAD exp | Architectural assistant, Part II | Architectural assistant, Part I | |
|---|---|---|---|---|---|---|
| Greater London | 拢82,500 | 拢62,000 | 拢43,500 | 拢36,000 | 拢29,500 | 拢20,500 |
| South-east | 拢65,000 | 拢47,500 | 拢40,000 | 拢34,000 | 拢28,000 | 拢18,500 |
| East of England | 拢53,000 | 拢40,000 | 拢38,000 | 拢29,000 | 拢22,000 | 拢17,000 |
| East Midlands | 拢55,000 | 拢42,000 | 拢35,000 | 拢28,500 | 拢25,000 | 拢16,500 |
| West Midlands | 拢55,000 | 拢42,000 | 拢35,000 | 拢27,000 | 拢21,000 | 拢16,500 |
| North-east | 拢48,500 | 拢36,000 | 拢30,000 | 拢27,500 | 拢20,000 | 拢16,000 |
| Yorkshire and Humber | 拢55,000 | 拢43,000 | 拢32,000 | 拢28,000 | 拢20,000 | 拢17,500 |
| North-west | 拢65,000 | 拢43,000 | 拢33,000 | 拢28,500 | 拢22,000 | 拢17,000 |
| Wales | 拢48,000 | 拢36,000 | 拢33,000 | 拢27,000 | 拢22,000 | 拢16,000 |
| South-west | 拢51,000 | 拢39,000 | 拢35,000 | 拢28,000 | 拢23,500 | 拢16,000 |
| Scotland | 拢54,000 | 拢42,000 | 拢32,000 | 拢28,000 | 拢19,000 | 拢15,000 |
| Northern Ireland | 拢48,000 | 拢38,000 | 拢32,000 | 拢25,000 | 拢21,000 | 拢15,500 |
| National average | 拢56,667 | 拢42,542 | 拢34,875 | 拢28,875 | 拢22,750 | 拢16,833 |
| Average change 2014-2015 | 3% | 3% | 8% | 3% | 3% | 2% |
Civil CAD technicians
| CAD manager | Senior CAD team leader | CAD technician | |
|---|---|---|---|
| Greater London | 拢47,000 | 拢39,500 | 拢31,000 |
| South-east | 拢35,000 | 拢33,000 | 拢26,000 |
| East of England | 拢37,500 | 拢35,000 | 拢26,000 |
| East Midlands | 拢35,000 | 拢32,500 | 拢30,000 |
| West Midlands | 拢36,000 | 拢33,000 | 拢28,000 |
| North-east | 拢35,000 | 拢31,000 | 拢22,000 |
| Yorkshire and Humber | 拢36,000 | 拢31,000 | 拢26,000 |
| North-west | 拢38,000 | 拢35,000 | 拢25,000 |
| Wales | 拢35,000 | 拢30,000 | 拢24,000 |
| South-west | 拢34,000 | 拢30,000 | 拢26,000 |
| Scotland | 拢36,000 | 拢32,500 | 拢27,000 |
| Northern Ireland | 拢28,000 | 拢26,000 | 拢25,000 |
| National average | 拢36,042 | 拢32,375 | 拢26,333 |
| Average change 2014-2015 | 3% | 5% | 5% |
Quantity surveyors
| Partner/ director | Associate | Senior surveyor | Newly-qualified surveyor | APC surveyor | Graduate surveyor | Claims and dispute resolution | Project manager | |
|---|---|---|---|---|---|---|---|---|
| Greater London | 拢75,000 | 拢65,000 | 拢53,000 | 拢41,000 | 拢34,500 | 拢25,000 | 拢70,000 | 拢50,000 |
| South-east | 拢70,000 | 拢53,000 | 拢43,000 | 拢33,000 | 拢27,000 | 拢20,000 | 拢45,000 | 拢48,000 |
| East of England | 拢58,000 | 拢44,000 | 拢38,000 | 拢30,000 | 拢23,000 | 拢22,000 | 拢48,000 | 拢40,000 |
| East Midlands | 拢60,000 | 拢46,000 | 拢45,000 | 拢33,000 | 拢25,000 | 拢22,000 | 拢42,000 | 拢43,000 |
| West Midlands | 拢58,000 | 拢45,000 | 拢40,000 | 拢30,000 | 拢21,000 | 拢21,000 | 拢40,000 | 拢40,000 |
| North-east | 拢55,000 | 拢45,000 | 拢40,000 | 拢29,000 | 拢23,000 | 拢20,000 | 拢38,000 | 拢40,000 |
| Yorkshire and Humber | 拢60,000 | 拢48,000 | 拢40,000 | 拢31,000 | 拢26,000 | 拢22,000 | 拢45,000 | 拢43,000 |
| North-west | 拢68,000 | 拢45,000 | 拢40,000 | 拢32,000 | 拢27,000 | 拢23,000 | 拢45,000 | 拢40,000 |
| Wales | 拢58,000 | 拢45,000 | 拢37,000 | 拢29,000 | 拢22,000 | 拢20,000 | 拢45,000 | 拢42,500 |
| South-west | 拢56,000 | 拢45,000 | 拢40,000 | 拢32,000 | 拢26,000 | 拢22,000 | 拢45,000 | 拢42,000 |
| Scotland | 拢62,000 | 拢50,000 | 拢40,000 | 拢32,000 | 拢24,000 | 拢21,000 | 拢45,000 | 拢45,000 |
| Northern Ireland | 拢57,000 | 拢44,000 | 拢37,500 | 拢29,000 | 拢23,000 | 拢19,000 | 拢45,000 | 拢38,000 |
| National average | 拢61,417 | 拢47,917 | 拢41,125 | 拢31,750 | 拢25,125 | 拢21,417 | 拢46,083 | 拢42,625 |
| Average change 2014-2015 | 4% | 8% | 6% | 8% | 8% | 7% | 2% | 5% |
Interior designers
| Senior interior designer | Interior designer | Junior interior designer | |
|---|---|---|---|
| Greater London | 拢43,000 | 拢36,000 | 拢23,500 |
| South-east | 拢37,000 | 拢30,000 | 拢22,000 |
| East of England | 拢32,000 | 拢27,500 | 拢17,000 |
| East Midlands | 拢32,000 | 拢26,000 | 拢21,000 |
| West Midlands | 拢35,000 | 拢26,000 | 拢18,500 |
| North-east | 拢27,500 | 拢25,000 | 拢16,000 |
| Yorkshire and Humber | 拢28,500 | 拢25,000 | 拢18,000 |
| North-west | 拢31,000 | 拢27,000 | 拢18,500 |
| Wales | 拢30,000 | 拢26,000 | 拢16,500 |
| South-west | 拢30,000 | 拢26,000 | 拢16,500 |
| Scotland | 拢30,000 | 拢26,000 | 拢17,000 |
| Northern Ireland | 拢26,500 | 拢23,000 | 拢17,000 |
| National average | 拢31,875 | 拢26,958 | 拢18,458 |
| Average change 2014-2015 | 4% | 3% | 3% |
Architectural CAD technicians
| Senior CAD technician | CAD technician | Technician | |
|---|---|---|---|
| Greater London | 拢37,000 | 拢28,250 | 拢31,000 |
| South-east | 拢37,000 | 拢26,000 | 拢30,000 |
| East of England | 拢33,000 | 拢24,000 | 拢26,000 |
| East Midlands | 拢32,000 | 拢26,500 | 拢27,500 |
| West Midlands | 拢33,000 | 拢25,000 | 拢27,000 |
| North-east | 拢28,500 | 拢24,000 | 拢28,000 |
| Yorkshire and Humber | 拢29,500 | 拢24,000 | 拢29,000 |
| North-west | 拢32,000 | 拢24,000 | 拢30,000 |
| Wales | 拢30,000 | 拢22,000 | 拢23,000 |
| South-west | 拢32,000 | 拢25,000 | 拢26,000 |
| Scotland | 拢26,000 | 拢19,000 | 拢20,000 |
| Northern Ireland | 拢28,500 | 拢20,000 | 拢31,000 |
| National average | 拢31,542 | 拢23,979 | 拢27,375 |
| Average change 2014-2015 | 3% | 3% | 5% |
Architectural technologists
| Senior technologist | Technologist | |
|---|---|---|
| Greater London | 拢39,000 | 拢30,000 |
| South-east | 拢38,000 | 拢30,000 |
| East of England | 拢36,000 | 拢25,000 |
| East Midlands | 拢35,600 | 拢27,500 |
| West Midlands | 拢36,000 | 拢26,500 |
| North-east | 拢33,500 | 拢25,500 |
| Yorkshire and Humber | 拢33,500 | 拢26,000 |
| North-west | 拢37,500 | 拢26,000 |
| Wales | 拢30,000 | 拢23,000 |
| South-west | 拢33,000 | 拢24,000 |
| Scotland | 拢30,000 | 拢26,000 |
| Northern Ireland | 拢29,000 | 拢23,000 |
| National average | 拢34,258 | 拢26,042 |
| Average change 2014-2015 | 4% | 4% |
Landscape architects
| Senior landscape architect | Landscape architect | |
|---|---|---|
| Greater London | 拢40,000 | 拢32,000 |
| South-east | 拢37,000 | 拢32,000 |
| East of England | 拢34,000 | 拢26,000 |
| East Midlands | 拢35,000 | 拢26,000 |
| West Midlands | 拢35,000 | 拢25,000 |
| North-east | 拢33,000 | 拢25,000 |
| Yorkshire and Humber | 拢34,000 | 拢24,000 |
| North-west | 拢35,000 | 拢26,000 |
| Wales | 拢37,000 | 拢26,000 |
| South-west | 拢37,000 | 拢26,000 |
| Scotland | 拢30,000 | 拢26,000 |
| Northern Ireland | 拢32,000 | 拢23,000 |
| National average | 拢34,917 | 拢26,417 |
| Average change 2014-2015 | 1% | 2% |
黑洞社区 surveyors
| Partner/director | Associate | Senior surveyor | Newly qualified surveyor | Graduate surveyor | Maintenance surveyor | |
|---|---|---|---|---|---|---|
| Greater London | 拢80,000 | 拢62,500 | 拢53,000 | 拢40,000 | 拢25,000 | 拢36,000 |
| South-east | 拢62,000 | 拢48,000 | 拢42,000 | 拢32,000 | 拢21,000 | 拢30,000 |
| East of England | 拢58,000 | 拢45,000 | 拢40,000 | 拢32,000 | 拢20,000 | 拢29,000 |
| East Midlands | 拢58,000 | 拢48,000 | 拢43,000 | 拢34,000 | 拢22,000 | 拢30,000 |
| West Midlands | 拢58,000 | 拢45,000 | 拢38,000 | 拢30,000 | 拢19,000 | 拢27,000 |
| North-east | 拢50,000 | 拢43,000 | 拢38,000 | 拢30,000 | 拢20,000 | 拢30,000 |
| Yorkshire and Humber | 拢56,000 | 拢43,000 | 拢37,000 | 拢31,000 | 拢22,000 | 拢27,000 |
| North-west | 拢65,000 | 拢45,000 | 拢38,000 | 拢33,000 | 拢22,000 | 拢28,000 |
| Wales | 拢57,000 | 拢43,000 | 拢39,000 | 拢27,000 | 拢20,000 | 拢30,000 |
| South-west | 拢65,000 | 拢43,000 | 拢38,000 | 拢32,000 | 拢21,000 | 拢28,000 |
| Scotland | 拢60,000 | 拢47,000 | 拢38,000 | 拢30,000 | 拢20,000 | 拢28,000 |
| Northern Ireland | 拢50,000 | 拢40,000 | 拢31,000 | 拢26,500 | 拢18,500 | 拢27,000 |
| National average | 拢59,917 | 拢46,042 | 拢39,583 | 拢31,458 | 拢20,875 | 拢29,167 |
| Average change 2014-2015 | 9% | 8% | 4% | 4% | 5% | 5% |
This week鈥檚 online poll
Will consultants鈥� salaries continue to rise rapidly in 2015?
Methodology
This guide has been compiled using data gathered during 2014 from 96 Hays Construction & Property offices across the UK. The salary data is based on job listings, job offers and candidate registrations. The findings of the benefits survey are based on responses from over 1,000 employers and employees working on construction organisations of all sizes throughout the UK.
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