The data from the 2017 psd / Building Magazine salary survey suggests that the skills shortage remains ever prevalent within the residential development sector. Basic salaries and bonuses in London have cooled whilst the rest of the UK play catch up.

While these types of surveys can never be one hundred percent accurate due to the widely differing salary packages offered by private and public, large and small companies, it gives an interesting insight into regional variations and offers an excellent tool for salary benchmarking.

The biggest increase in annual remuneration packages has been seen in the North West, Yorkshire and North East. That said, the results of the survey show that Managing Directors in London and the Home counties can still command an annual basic salary of between £186,000 to £207,000 with a 92% average annual bonus.

• Read the article on Building (subscription required)
• View the published article (pdf)
• View the survey’s raw data (pdf)

Extract from Building’s commentary:

The jitters that hit the housebuilders in the wake of the Brexit vote just over a year ago – when share prices fell by anything up to 35% – seem a long time ago. While the London market remains somewhat depressed, much of the rest of the country has carried on regardless, despite the likelihood, increasing by the day, of the UK crashing out of the EU without a deal.

The discussion around skills since the Brexit vote has been focused, understandably, on site-based workers – given the forecast of 20-25% decline in available labour within 10 years. But the situation regarding skilled professional staff is every bit as challenging. Building’s annual salary survey, undertaken by recruitment firm psd Group, found 84% of housebuilders saying skills shortages were having a negative impact on their business, up from 81% last year. So it is little surprise that director-level salaries rose significantly faster than inflation, at around 6%. This compares with a rise of just 3% in 2016.

This finding fits with the experience of Countryside’s Worrall, who says that anything between 5% and 9% is standard. “It’s not the level of increase that our existing employees are seeing, but when you have to bring people in from outside it is absolutely that kind of number”. psd‘s Course says:

Clients have found it increasingly difficult to recruit senior leaders, such as managing directors, that fit their specific requirements. When they manage it they make sure they hold on to them and so provide remuneration packages with strong incentives to stay put.

Geographically, the cooling London market has started to have an impact. While London still has the biggest employee packages by quite some distance, other parts of the UK are now growing more quickly, mirroring the much more rapid house price growth seen outside the capital over the past 18 months. Nick Worrall, Group HR Director for Countryside Properties, says:

Nervousness about a downturn being around the corner is not a sentiment we’re picking up at all from candidates.

Much of this growth appears to have been driven by national and regional firms opening new regional offices to take advantage of the strengthening market. Redrow’s Group HR Director Karen Jones, whose business recruited 500 staff last year, says:

If you have someone opening a new division then you get a little spike in that area, which is what we were seeing three to six months ago. The likes of us and Barratt then get targeted by headhunters and our staff are offered more money, which means you have to pay your existing staff more.