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Recruitment body pay mirrors other sectors

August 2012 | Colin Cottell
CEO salary chart

Salaries of the highest paid executives within UK recruitment industry trade bodies, and other membership bodies linked with the industry, display the same diversity as salaries paid to chief executives of UK trade associations generally, as indicated by a survey. 

The 2011 survey of 90 trade associations by the Trade Association Forum (TAF) and the CBI found that the lowest paid CEO received £34,500, excluding bonuses, a year while the highest paid received £210,000. Salaries broadly increased in line with the number of staff employed.

Research by Recruiter reveals that this picture was mirrored in the trade bodies and other membership bodies linked with the UK recruitment industry. In 2011 basic salaries ranged from £187,000 to none at all. And again there was a link between organisation size and salary.

The CEO of the Recruitment & Employment Confederation (REC), Kevin Green, was comfortably the highest paid senior executive with a basic salary of £187,000 in 2011. When bonuses and pension contributions are included, Green’s overall remuneration package in 2011 was £263,550, representing a 36% increase on his 2010 remuneration of £193,715.

The remuneration figure includes the basic salary, bonuses and pension contributions. The bonuses contributed to most of the 36% increase. No bonuses were paid in 2010.

Green’s bonus figure of £58,700 was made up of a three-year bonus of £40,000 for the 2008-2011 period, and a one-year bonus of £18,700, said an REC spokesperson.  

The spokesperson said that the three-year bonus, which was set on Green’s appointment by the REC chairman, vice-chairs and head of the finance committee, was based on reaching targets relating to “the financial stability of the REC”. The one-year bonus was for achieving “financial targets and delivering on the business plan”. Green’s salary has not increased for 2012.

With turnover of more than £6m, 75 employees and more than 3,750 corporate members, the REC is the biggest of the membership bodies associated with the recruitment sector.   

Next in line in terms of directors’ remuneration was the Association of Professional Staffing Companies (APSCo), whose two paid directors, Ann Swain and Marilyn Davidson, together received £185,958 in basic salary in 2011. The combined remuneration for the two rose by 17.6% from £165,198 to £194,263 in 2011, which resulted from the CEO increasing working hours from four to five days per week.  

APSCo had revenue of just over £1m in 2011, and currently has 427 corporate members and employs 12 staff.  

For comparison purposes, Recruiter asked APSCo to provide individual details of the remuneration paid to its CEO (Swain) rather than a combined figure for Swain and Davidson. However, Davidson said: “That is the way the directors’ remuneration is reported, it is not broken down, and that is all that is available.”

Azmat Mohammed, director general of professional body for the recruitment industry the IOR (Institute of Recruiters), told Recruiter that just over a year old, it does not now pay its senior executives salaries. “This allows us to grow more quickly,” he said.  

However, he added that senior executives will receive a salary after 18 months in post, though with a £60,000 cap on individual salaries. “As a not-for-profit organisation, we see that as a ceiling that anybody should be happy with,” he said. 

The chairmen of three other recruitment-focused organisations — the Association of Recruitment Consultancies, the Independent Recruiting Group and The Recruitment Society — also said they did not receive any pay. 

Finally, The Employment Agents Movement (TEAM) declined to provide salary details for MD Liz Longman, who told Recruiter the information was “too personal” to disclose.

By way of comparison between the recruitment industry and other industries, in 2011 the CEO of the Chartered Institute of Personnel and Development received a remuneration package of £429,000. This was made up of a basic salary of £282,000, a variable performance bonus of £95,000, pension contributions of £38,000 and benefits in kind of £14,000. This compares with £399,000 in 2010. The CIPD employed 318 staff and had income of £37.06m.

Wendy Sales, senior consultant at Innecto Reward Consulting, said that CEO remuneration is typically based on a number of key criteria, namely, the turnover, the number of staff and whether the organisation is UK or international.

However, she says that there is an increasing emphasis on payment based on results, so that in many cases the bonus can make up half of a CEO’s remuneration and sometimes even more.

Comments

Barry Smith, 19 October 2012, 11:21:

  • My company left REC about 3 years ago because they were increasing fees at a time when we and others in the industry were struggling. I am amazed to learn of the remuneration being paid to Kevin Green during this period. I have been a personal member of the IRP\IEC for some 20 years but will not renew.


Martin Smith, 28 Aug 2012, 16:27:

  • I congratulate Recruiter for some excellent reporting.

    My own interests lie not with other organisations but with the trade body of which I am a member. That said I must congratulate those who put their service to their members above personal gain.

    I read with great surprise that the remuneration panel for the REC is so small and yet so close to the CEO. That is always a very dangerous thing to do... I will be urging the REC to make sure that things are always seen to be done at arms’ length in future.


Sarah Morgan, 29 Aug 2012, 11:21:

  • Interesting piece, and many thanks for the inclusion. To clarify, The Association of Recruitment Consultancies (ARC) are more than just a 'recruitment-focused organisation'; - we are and have always been an established trade association, and are members of the TAF. Please also note that the ARC Chairman and all Executive members steer the ARC on a pro bono (unpaid) basis.


Sarah Daniels, 21 Aug 2012, 16:38:

  • I am quite dumbfounded at the wages that the CEO of
    the REC has been given...It seems that the profits made are just being sucked out... rather than invested in what the membership require. I for
    one will not be renewing and lining his pockets any further.
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