2018 Residential House Building Salary Survey
The 2018 psd and Building Magazine Residential House Building Salary Survey reveals basic salaries and bonuses in London remain relatively still whilst the rest of the UK enjoy ‘progressive’ market conditions. However, the shortage of skilled professionals within the residential development sector continues to be a hot topic for many.
Basic salaries and bonuses in London remain relatively still whilst the rest of the UK enjoy ‘progressive’ market conditions. Many companies this year continued on a five-year run of expanding output and profit, rewarding shareholders with fat dividends along the way and remaining largely debt-free.
The biggest increase in annual remuneration packages has been in the North West, Midlands and South East / Home Counties (excluding London).
The data also shows construction and build directors saw the biggest salary increases of all the disciplines, up 9.3% to an average of £110,000. Just five years ago, the average salary for the same role was only £78,000 – that’s an increase of more than £32,000.
Figures this month from Halifax bank, showing the second consecutive monthly fall in house prices, followed widespread reports of stagnation in the housing market. Averaging a basket of indices, price rises are at their smallest for five years, while prices have been falling in London as consumers appear to be reining in spending amid fears ahead of Brexit.
But so far the housebuilding industry, supported by Help to Buy, has carried on largely unaffected by these esoteric doubts. The top 30 biggest housebuilders have increased house sales by 7.5% in the last year.
All this is good news for the sector’s employees, with the same top 30 adding more than 2,000 extra staff in 12 months. So, it’s perhaps no great surprise that Building’s annual survey of housebuilding industry director-level salaries, conducted by recruitment firm PSD, shows salaries for those at the top of the industry continuing to rise.
Clare Smithson, Group Head of Human Resources at 550-strong South East housebuilder Hill, which is looking to grow by another 100 staff next year, agrees.
“We’re recruiting quite heavily, and we have quite a lot of trainees, but there are a few pinch points. Unfortunately, it’s quite a small pond we’re fishing in.”
This tough competition for skilled people is further driving salary inflation, as housebuilders resort to poaching staff from rivals, resulting in high offers and higher counter offers.
Alan McGillivray, Group Human Resources Director at 750-strong housebuilder Avant Homes, which works from the Midlands to Scotland, says the demand is “ratcheting up” wages, with many housebuilders agreeing to mid-year salary raises for existing staff to defend against poaching.
“The wages pressure has been growing in the existing workforce in order to retain the people we’ve got. We try to do this where necessary before people are poached.”
This is all very good news for employees, however recruitment has slowed in the capital over the last year and this is partly due to nervousness around Brexit, which is backed up by the survey data. When respondents were asked to identify the top three threats facing the housebuilding market, Brexit was overwhelmingly the biggest, mentioned by 81% of respondents, compared with just half who thought it was a threat last year. This makes it a bigger perceived threat than skills shortages and the planning system – which were the two big issues in 2016 and 2017. It seems that with Brexit in sight, many employees question whether the risk of moving to a new employer is worth the potential gain.
This survey was undertaken by psd, specialists in senior level search and selection across the residential & property sector. There were two elements to the research: an attitudinal survey that targeted approximately 5,500 individuals at senior management to director level across the residential sector and data from placements made by psd over this period.
Director - Property & Construction
Elliot is a Director in psd's Property & Construction practice, recruiting into the Residential Development, Affordable Housing and PRS sectors.