How much are you worth?

22-Aug-2007

Welcome to the 2007 Salary and Benefits Survey, conducted by BMG Research on behalf of Recruiter, the Recruitment and Employment Confederation and accountancy firm Saffery Champness.

This is the second such survey of the recruitment industry, following its launch in 2006. According to Helen Reynolds, the REC’s acting chief executive, the survey is “the most comprehensive insight into recruitment staff remuneration available”.

This year, the research examined salaries and benefits of recruiters -—consultants and managers — working in the construction, driving, education/teaching, hospitality and technical/engineering sectors. In 2006, five other recruitment sectors were put under the spotlight.

Martin Holden, head of professional and consultancy services at Saffery Champness, said the 2007 findings point up more of a long-term approach to remuneration. For instance, the percentage of recruiters across all surveyed sectors whose benefits include contributions to company or private pensions increased by 4% from 2006.

“Four per cent is significant,” Holden says. “Recruitment has a reputation of being a ‘short-term’ industry, but there seem to be some remuneration traits seen here of long-term employers. This seems to show the changing nature of the industry.”

Telephone interviews
BMG Research interviewed 1,013 UK recruitment consultants and managers by telephone in May and June. Agencies were selected at random for interview using the most recent list of recruitment and employment agencies, obtained from the Experian National Business Database. Those interviewed included 207 from the driving sector, 201 from the hospitality sector, 202 from the construction sector, 208 from the technical/engineering sector and 195 from education/teaching.

Recruiters in the drivers, hospitality, construction, technical/engineering and educating/teaching sectors earn, on the average, more than the average UK worker. For the tax year ending 6 April 2006, representing the most recent figures available, the median gross annual earnings were £23,600 —- £2,032 less than the average basic pay across the five recruitment sectors covered here. [Editor’s note: The national median gross annual earnings figures represent employees on adult rates who have been in the same job for at least 12 months.]

The last basic pay rise across the recruitment sectors surveyed averaged 8.3%

The lowest paid recruiters in this survey were those who recruit drivers: the average basic pay for recruiters excluding bonus commission working in the sector was £23,767, with consultants earning an average of £21,677 and managers an average of £29,274.

At the higher end of the scale, the high-end earners work in the technical/engineering sector where consultants earn an average of £24,722 and managers earn an average of £33,159. The average basic pay in that sector is £26,760.

Jason Silk, HR director at technical/engineering recruitment firm Hill McGlynn, agrees that the figures reflect the current state of pay in that sector, where business is booming. “Market conditions are really the main driver,” Silk says. “It’s a competitive marketplace.”

In second place to technical/engineering consultants are those working in the construction industry, earning an annual basic pay of £24,470. Managers working in the education/teaching sector are the second-highest earning managers, with an average basic salary of £31,466.

Total salary
In terms of total salary including bonus and/or commission, the average across the five sectors is £34,718 per annum. Again recruiters working in the driving sectors are paid the least, with consultants earning £27,723 and managers at £37,878.

And technical/engineering recruiters continue to earn the highest of any of the five sectors with consultants earning £35,839 and managers earning nearly £10,000 more at £45,339.

When it comes to total salary, recruiters working in construction are paid the second-highest amongst the five sectors, at both the consultant and managerial level, at £34,280 and £44,330 respectively. “There’s intense competition — the demand for construction recruiters in very high,” says Martyn Makinson, a director of construction recruiter Bromak. “There’s a skills shortage in construction — and it’s exactly the same for us in construction recruitment.”

Competition for good construction recruiters is so intense, Makinson says, that “our staff are getting ‘tapped up’ every single day.”

Yet recruiters in the driving sector came out on top when it came to having access to bonus and commission schemes: 87% of the respondents in that sector reported that they received bonus or commissions. Researchers found that their colleagues working in the hospitality arena were the least likely to receive such rewards.

Commission less important
However, not all in the driver sector see bonus or commission as important. Ian Ware, a Driver Hire franchisee in Bradford, says: “Remuneration is key. The figures quoted for recruiters are pretty much on the button as far as we are concerned. The major change I made was to move things around from being very bonus-driven to the current situation, which is mainly salary with a bonus if certain targets are met. This has been welcomed by my recruiters.

“Job satisfaction plays a big part in staff retention. We operate a flat management system, which gives our employees responsibility and the power to make their own decisions on their section of the business.”

By a significant majority, most recruiters, or 76%, who receive commission or bonus earn them on an

individual, or personal, basis; 30% receive a team commission, 27% earn a company or branch commission and 1% earn another form. On this question, respondents could give multiple responses.

Regardless of which kind of bonus or commission is paid, it is most likely to be paid monthly, respondents say.

Melody Thompson, sales and marketing director at Chippenham-based, Wiltshire, driver recruiter 24-7 Staffing, says: “We changed our pay structure to one based on a quarterly target, and found it very effective. Previously, they were just paid a flat salary, and bonuses were paid randomly. They are now able to check on a weekly basis whether they are above or below target. We felt it incentivised the consultants to achieve the targets and it works very well.”

For most recruiters, an average of 68% overall, bonus or commission is based on a minimum threshold of billings or gross profit. The largest percentage of respondents — 20% — reported that £10,000 was the minimum level that had to be achieved each month before commission or bonus was earned. The second highest percentage — 10% — said the minimum threshold of billings was £4,000 to £5,000.

Stephen Wright, head of UK education at Monarch Recruitment, says: “We are very much driven by results. The basic salary is very good, but the commission is so much better, and consultants can earn twice their basic salary on commission.

“Although we have a basic salary banding which was increased in the past 12 months, most of our consultants’ salary increases are based on performance.”

He adds: “Overall the average salary goes up each year because we are so much more successful than we were before. It isn’t the basic salary that keeps people here. It’s very much the potential increase they can achieve through commission.”

Mirroring the results of last year’s survey, training schemes or training days was the most frequently provided benefit to agency staff overall. The average number of training days allocated to agency staff each year was five.

Repeating its ranking from 2006, team drinks and social functions again came in second to training.

However, this year found that the third most available benefit was an employer-supplied mobile phone — up from fifth place across the sectors surveyed last year.

The top two places were held by the same benefits across all five sectors surveyed this year. Third place was the only variable among the top three, with dress-down policy at 56% taking third place in the education/ teaching sector and personal incentives, such as meals or events, taking third amongst construction recruiters.

Matt Barrett, managing director of hospitality recruiter SVB Recruitment in Leeds, says his company takes a different approach to benefits: his team can choose from an array of benefits, to the value of up to 5% of their salaries. Among the benefits on offer are fully-paid gym memberships and private health insurance.

However, Barrett told Recruiter that training for the job itself should not be included in the survey as a benefit. “To be trained in your own job, that’s not a benefit,” he says.

Eddie Austin, managing director at ITN Mark Education, explains that training is just one of the many benefits that entice staff to join the company.

“Salary still rates as the most important but other benefits, such as training provision, private healthcare and nursery vouchers are becoming increasingly sought after and are now, for the first time, being seen as ‘deal breakers’ when recruiting new staff. Pensions are also becoming more important.”

In the area of annual leave, the numbers of days allowed varied little. Recruiters working in the education/teaching sector earn an average high of 25 days of annual leave, with recruiters in the driving and hospitality sectors earning an average of 22 each.

As any experienced recruiter knows, however, money and benefits do not always add up to a happy employee. But the good news in the 2007 survey was that more than two-thirds of the recruiters surveyed are satisfied in their jobs, with 41% reporting that they were “very satisfied”. Another 37% say they are satisfied with their jobs. Fewer than 10% were dissatisfied.

But the level of dissatisfaction rose when asked about pay. A total of 14% were either dissatisfied or very dissatisfied with their pay overall. A total of 62% of those surveyed said they were satisfied with their pay, including 28% who were “very satisfied”.

However, 23% said they were neither satisfied nor dissatisfied.

“As always consultants look for a good basic salary and the ability to supplement that with an attainable bonus package,” says Austin. “Consultants are also looking to work more flexibly and at ITN Mark we enable this through our shift pattern, which allows those consultants who work the early starts to finish at 4pm and those who work till 6pm don’t start till 9am.”

The 2007 findings again pinpointed encouraging results in terms of recruiters’ perceptions of staff churn. A total of 60% perceive staff turnover at their sites as low. In an exact replication of last year’s findings, 15% perceive staff turnover as high.

Recruiter editor DeeDee Doke says that the 2007 survey’s findings reflect the buoyancy of the recruitment market. “The investment in training across the sectors also show a definitive interest by employers in improving individual and team skills,” she says. “Ultimately, that commitment will go a long way toward improving the industry’s reputation for professionalism.”

• Saffery Champness will host a series of lunches across the UK this autumn at which Martin Holden, DeeDee Doke and REC research director Roger Tweedy will discuss the survey findings. For more information, contact Marie-Louise Reynolds at Saffery Champness 020 7841 4000.