黑洞社区

An ongoing skills crisis, an uncertain political and economic environment and some of the slimmest margins on record. These are the big factors influencing the financial operation of contractors this year and in turn the financial futures of those they employ.

Earlier this year, 黑洞社区鈥檚 latest Top 150 contractors and housebuilders survey revealed that average margins across the top 10 contractors had been squeezed to just 0.38%.

Unsurprisingly, with contractors feeling the crunch, wage growth for contracting professionals has remained more or less flat, albeit still outstripping the national average.

The precarious position of contractors was perhaps best highlighted at the very start of this year when it all came undone for construction behemoth Carillion, which went crashing out of existence in spectacular fashion. 

With all that in mind, it is unsurprising that many of those employed by contractors are not overly optimistic about their futures, with just over half saying they feel positive about their career prospects.

Securing the right talent is likely to become more challenging as applications for roles from EU workers slow ahead of Brexit

Duncan Dullimore, Hays Construction

The latest annual contractor salary survey, undertaken for 黑洞社区 by recruitment firm Hays, seems to show that despite this lack of optimism in their career prospects, people are preparing to take the plunge and make a move in a post-Brexit world.

Hays鈥� survey of professionals employed by contractors, conducted in early summer this year, found an increase in the proportion of people willing to jump ship post-Brexit, with 59% of contracting professionals expecting to move jobs in the next 12 months. This is up from 53% the previous year.

This comes as salary growth remains by and large stagnant despite increases across all job types covered in the survey. The average salary growth of 3.2% that it found at contractors is up from 3% the previous year.

Despite the subdued growth, salary increases continue to outpace those across both the wider economy and the wider construction and property industry. Hays reports just 1.9% salary growth across all industries in 2018, but 2.7% for construction and property professionals overall.

So with the skills crisis as keen as ever and companies feeling the pinch, will a greater willingness for movement by staff force contractors to boost wages over the next 12 months? And if not, will they lose staff to their better paying siblings, the housebuilders?

 Site management

Source: Hays

Construction (operational functions - site management)
Region	Senior site manager	Site manager	Assistant site manager	General foreman
East Midlands	拢50,000	拢45,000	拢36,000	拢33,000
East of England	拢53,000	拢46,000	拢33,500	拢33,000
Greater London	拢66,000	拢54,000	拢42,500	拢36,500
North-east	拢45,000	拢42,000	拢30,000	拢28,000
North-west	拢53,000	拢46,000	拢34,000	拢30,000
Northern Ireland	拢42,000	拢40,000	拢28,000	拢34,000
Scotland	拢49,000	拢46,000	拢36,000	拢33,000
South-east	拢65,000	拢53,500	拢40,000	拢36,000
South-west	拢53,000	拢46,000	拢33,000	拢31,500
Wales	拢47,000	拢42,000	拢31,000	拢30,000
West Midlands	拢51,000	拢46,000	拢37,000	拢33,000
Yorkshire and Humber	拢46,000	拢41,500	拢32,500	拢28,500
National average	拢51,667	拢45,667	拢34,458	拢32,208
2017-18 change	5%	4%	3%	3%

Moving on

With almost 60% of employees planning to move in the next 12 months and around 35% planning to do so in the next six months, there鈥檚 clearly a much greater willingness to switch jobs post Brexit. Despite this, employees are less optimistic about their career prospects this year which could have an adverse effect on employee movement.

Just over half of employees said they felt positive about their career prospects this year, lower than the 63% who felt positive last year, a consequence perhaps of the ongoing uncertainty in the sector. Hays said it was evident that despite more employees considering a move, they are concerned that there are fewer opportunities available.

Kevin Cammack, construction analyst at Cenkos Securities, said: 鈥淚 was aghast when I saw the number of people who think they will move in the next year, but I expect that has something to do with the fact we have been living with the uncertainty of Brexit and in 12 months鈥� time that will be a bit more solid.鈥� 

Quantity surveyor

Source: Hays

Region	Senior QS	Intermediate QS	Assistant QS
East Midlands	拢55,000	拢44,000	拢30,000
East of England	拢58,000	拢46,000	拢32,000
Greater London	拢68,000	拢50,000	拢35,000
North-east	拢47,000	拢40,000	拢28,000
North-west	拢52,000	拢47,000	拢30,000
Northern Ireland	拢53,000	拢41,500	拢33,500
Scotland	拢52,000	拢42,500	拢25,000
South-east	拢66,000	拢50,000	拢34,000
South-west	拢55,000	拢45,000	拢31,500
Wales	拢52,500	拢41,500	拢27,500
West Midlands	拢53,000	拢42,000	拢30,000
Yorkshire and Humber	拢55,000	拢42,000	拢26,000
National average	拢55,542	拢44,292	拢30,208
2017-18 change	3%	3%	3%

Duncan Bullimore, director at Hays Construction, agrees saying: 鈥淲hile staff might have some worries about what the future may hold, it鈥檚 positive to see that employers are being more transparent with the career opportunities available to them within their current organisations.

鈥淪ixty-eight per cent [of staff] said there was room for progression within their company compared with 60% the year before.鈥�

Still a gap

Luckily for those looking to take the plunge, around two-thirds of employers are expecting an increase in activity and 81% of employers are planning on recruiting over the next 12 months.

Despite strong hiring plans, and an increased willingness for movement by staff, employers continue to be challenged by skills shortages 鈥� 95% told Hays they had experienced some form of skills shortages over the past year.

I was aghast when I saw the number of people who think they will move in the next year

Kevin Cammack, Cenkos Securities

Brexit is once again having a negative influence here, with Bullimore saying: 鈥淪ecuring the right talent is likely to become more challenging as applications for roles from EU workers slow ahead of Brexit.鈥�

Almost two-thirds of employers said they have faced extreme skills shortages, higher than the 21% who reported the same thing in 2017. 

Employers highlighted a lack of people entering the industry as the single largest reason for the skills crisis, with 52% saying this was the major cause.

Estimator

Source: Hays

Region	Senior estimator	Estimator	Assistant estimator
East Midlands	拢58,000	拢44,000	拢28,500
East of England	拢59,000	拢50,000	拢33,000
Greater London	拢72,000	拢55,000	拢38,000
North-east	拢47,000	拢40,000	拢27,500
North-west	拢62,000	拢52,000	拢31,000
Northern Ireland	拢54,000	拢43,500	拢33,500
Scotland	拢54,000	拢45,000	拢31,000
South-east	拢68,000	拢52,000	拢32,500
South-west	拢55,000	拢49,000	拢31,500
Wales	拢53,500	拢44,000	拢31,000
West Midlands	拢60,000	拢45,000	拢29,000
Yorkshire and Humber	拢56,000	拢43,000	拢26,000
National average	拢58,208	拢46,875	拢31,042
2017-18 change	4%	3%	4%

Bullimore says: 鈥淓mployers are making use of temporary and contract workers to help alleviate skills gaps 鈥� 45% say they hired additional temporary or contract staff in the past year, [compared with] 39% the year before.鈥�  

The lack of appropriate staff to carry out work meant more than 60% of employers say the continuing skills shortages have had a negative impact on productivity, which was higher than the overall UK result of just 49%.

More than 40% of contractors said shortages had hampered the ability to deliver projects, while 31% say they have been an obstacle to growth. Small wonder then that firms will be looking to recruit. 

Contract/project manager

Source: Hays

Region	Contract manager	Project manager
East Midlands	拢60,000	拢54,000
East of England	拢57,000	拢53,000
Greater London	拢78,000	拢70,000
North-east	拢51,000	拢45,500
North-west	拢62,000	拢58,500
Northern Ireland	拢51,000	拢47,000
Scotland	拢59,000	拢56,000
South-east	拢70,000	拢66,000
South-west	拢60,000	拢59,000
Wales	拢57,000	拢52,000
West Midlands	拢61,000	拢54,000
Yorkshire and Humber	拢54,000	拢49,500
National average	拢60,000	拢55,375
2017-18 change	4%	3%

Money talks

The offer of extra cash is still likely to be contractors鈥� greatest weapon when it comes to recruiting fresh talent.

Bullimore says: 鈥淲e know employers are focused on hiring the right talent to help plug skills gaps, which have challenged the industry for a number of years, and the majority of employers are still very much planning ahead.鈥�

More than two-thirds, or 69%, of employers told Hays they had plans to increase salaries again this year, which is broadly in line with employees鈥� expectations, of whom 60% expect their salary to increase over the next 12 months.

The good news for employers is that staff have reported significantly higher satisfaction levels than last year. Close to two-thirds of employees say they are currently satisfied with their salary compared with just 47% last year. 

So what could push an employee to leave a business, where it appears they feel largely content? Aside from salary, employees are prioritising both job security and work-life balance when considering a new role, with 21% equally selecting these factors as the most important when considering a move.

A positive sign is that employers seem to be attuned to the needs of staff, with 20% of them saying that aside from salary, job security was the most important factor to highlight in order to help them attract staff, followed by benefits packages (15%) and work-life balance (15%).

Another positive was that the top five benefits for employees matched the top five benefits offered by employers, with the offer of more than 28 days鈥� annual leave being the top priority for employees.

On-site engineers

Source: Hays

Region	Senior engineer	Engineer
East Midlands	拢44,500	拢37,000
East of England	拢45,000	拢36,000
Greater London	拢54,000	拢43,000
North-east	拢45,000	拢40,000
North-west	拢53,000	拢42,000
Northern Ireland	拢36,000	拢31,500
Scotland	拢46,500	拢38,000
South-east	拢47,000	拢42,000
South-west	拢44,000	拢39,000
Wales	拢47,000	拢37,000
West Midlands	拢42,000	拢36,500
Yorkshire and Humber	拢44,000	拢40,000
National average	拢45,667	拢38,500
2017-18 change	3%	3%

Sibling rivalry

There is another problem for contractors, the fact their housebuilding counterparts seem to be able to offer what they cannot 鈥� booming pay increases to professionals based on solid profits and margins.

In the 2018 Housebuilders Salary Survey, carried out for 黑洞社区 by PSD Group, it was found that construction/build directors had scored pay increases of 9.3%. By comparison, the top performing job role for pay increases across contractors, senior site manager, claimed a 5% increase.

Cammack says he is unsurprised site managers scored the highest pay increase, in large  part because they were the professionals with the most skills directly transferable to housebuilding. 鈥淚鈥檓 a little surprised the jump for that position isn鈥檛 higher.

鈥淲hen you get to that level the skills are more interchangeable with housebuilders and they have been much more aggressive in terms of employment.鈥�

Cammack says the other reason housebuilders are able to pay site managers the big bucks is that they are paying significantly fewer professionals than their contracting counterparts.

鈥淚f you compare the number of professionals required on a housebuilding site with the number required to build a bridge or tower it鈥檚 significantly less, meaning housebuilders can afford to pay more, which does create an issue for contractors when there are positions that are transferable,鈥� Cammack says.  

Health and safety professionals

Region	H&S director	Senior H&S manager	H&S manager
East Midlands	拢71,500	拢54,000	拢46,000
East of England	拢65,000	拢51,000	拢39,000
Greater London	拢95,500	拢72,000	拢55,500
North-east	拢56,500	拢46,500	拢36,500
North-west	拢66,500	拢53,500	拢45,000
Northern Ireland	拢51,000	拢43,000	拢38,000
Scotland	拢54,000	拢44,000	拢37,000
South-east	拢84,000	拢59,000	拢51,000
South-west	拢73,000	拢53,500	拢43,500
Wales	拢60,500	拢50,000	拢38,000
West Midlands	拢68,000	拢56,000	拢42,250
Yorkshire and Humber	拢72,500	拢54,500	拢43,000
National average	拢68,167	拢53,083	拢42,896
2017-18 change	1%	2%	2%

The other issue for contractors is that not only are wages at housebuilders increasing more quickly, they are much higher. Of the six contracting positions surveyed none had a national average wage of more than 拢70,000.

By contrast the 10 housebuilding professions highlighted in that survey just one had an average national salary less than 拢90,000. Design directors, the only title to miss the 拢90K-mark, were paid an average of 拢89,000.

For contractors, a sector already facing an acute challenge to recruit, if the golden age of housebuilders continues past Brexit they may be the greatest threat to staffing of all when recruiting site professionals.