Residential Housebuilders Salary Survey 2019
The 2019 psd and Building Magazine Residential Housebuilding Salary Survey reveals Directors’ salary increases at housebuilders are not what they used to be. Pay is still going up – driven by continuing skills shortages – but the economic climate has constrained wages this year.
There were two elements to the research, undertaken by psd: an attitudinal survey that targeted more than 5,000 individuals at senior management to director level across the residential sector and data from placements made by psd over this period.
Wage growth slows
House price growth has been below 1% for the best part of the year, according to Nationwide. Meanwhile the Ministry of Housing, Communities and Local Government’s (MHCLG) data shows new-build housing starts in England falling for the third quarter in a row. The data tells a consistent story of where the industry is right now.
The broader economic climate has helped to constrain wage growth for housebuilding’s senior personnel, according to our annual survey of housebuilding industry director level salaries. The data, which is based on all residential placements psd has made in the past 12 months, show director level salaries have risen by an average of 2.7% in 2019. That is a full percentage point ahead of the current UK inflation rate of 1.7%, but down on last year’s average salary increase of 3.7% and the preceding year’s 4.8%.
This growth was unevenly distributed across the UK, with Scotland seeing overall salary levels rising by less than half a percent on average, while London was in line with the overall average. The region seeing the greatest salary growth over the year was the South-east, which just broke through the 3% barrier, and the North-west was not far behind with average growth of 2.9%.
Industry skills and expertise remain in the same short supply as new homes, and housebuilders and housing associations now find themselves competing for top talent with a number of new providers, which are assembling and growing management teams, including most notably build-to-rent developers and local authority housing companies. For example, Ealing council’s housing company Broadway Living, which was established in 2014, is gearing up to deliver an ambitious housebuilding programme. A new managing director has been appointed to lead the residential development drive and further appointments are planned.
Council housing companies are tweaking public sector pay and terms and conditions to enhance their offer to potential recruits, particularly in the highly competitive London job market, and are also promoting other rewards. While often construction roles can be the hardest to recruit, it is project directors that have been in demand over the past year, resulting in increases in salary levels in all regions, except the capital where they remained static, according to our salary survey data.
52% of respondents noticed a decrease in the number of opportunities in the residential sector in 2019, compared to 12% in 2018.
Quality of life
The housebuilding industry is known for its attractive salary and bonus packages but far less attractive working conditions, with long hours, many of them spent driving from site to site. Unsurprisingly, respondents to the survey rated salary as the top priority when considering a new role, but job location and improved work / life balance were also ranked highly. Employers look to be taking those aspirations on board, the survey found, offering benefits such as flexible working, dress-down days and the potential to carry over leave days or add additional ones.
Developers are using more and more diverse ways to retain their staff. Salary may be the main driver, but when you combine pay with factors such as the desire to work closer to home, the aspiration for work / life balance, and employers offering flexible working, importance is clearly being placed on quality of life.
Other industries are already making employee wellbeing a business priority, an approach that is by no means common in housebuilding yet. But as the businesses delivering UK homes become more diverse, employers may have to make their work environments as attractive as their salaries if they want to win the best recruits.
psd works with clients to identify and appoint candidates for board-level, mid- to senior-executive, and management roles across the full range of property & construction activity.