30 / feature / housebuilders salary survey 21.10.2016 BUILDING MAGAZINE T he vote to leave the EU on 23 June will no doubt be marked down as a watershed moment for the political and economic story of the UK. According to the data from Building’s latest annual housebuilder salary survey, however, it is not, so far, any kind of watershed for the housing industry. Housebuilder share prices fell by up to 40% after the referendum, given Treasury forecasting that house prices would be hit by up to 18% by a leave vote. The reality is that the sector has largely carried on trading unaffected, with most builders reporting continuing strong sales. The salary survey data shows this dynamic is translating into a continuation of the strong demand for housebuilder staff seen in recent years, with big salary increases and skilled and experienced staff at a premium. So, if you work in the housing development industry and were worried about what Brexit BUSINESS AS USUAL The Brexit vote has ushered in a time of widespread uncertainty, but activity in the housebuilding sector has so far held up well. Joey Gardiner looks at what we can learn from this year’s salary survey and and asks how long trading can remain strong might do for your career prospects, the message so far is don’t be. But with some fearing that longer-term economic impacts from the EU vote may start to filter through in the new year, and a combination of factors leading to a slowdown in construction in London, is it credible that the sector will escape without any impact at all? Salary rises The data from the survey, undertaken by recruitment firm PSD Group on behalf of Building, shows average salaries for directors increasing in nearly every region and discipline (see table, opposite), with an average increase of 3%. With the steepest rises still occurring in London, despite the recent slowdown in workloads there, the average MD’s salary in the capital topped £200,000 for the first time, a 3% rise on the figure last year. Regionally, average director salary increases ranged from 6.3% in London and 5.5% in the South-east at the top end to 0.4% in the North-west, the weakest region overall. By role, many of the highest salary rises were captured by those on the construction side of housebuilder businesses. Technical directors did best with an average 4.6% salary increase, with commercial and construction/build directors not far behind. In the high-demand regions of London and the South-east, several of these roles – alongside highly sought after land and planning jobs – saw double-digit salary increases. PSD used placement data from throughout 2016 to inform the figures, but its sentiment survey was wholly conducted in September, BUILDING MAGAZINE 21.10.2016 feature / housebuilders salary survey / 31 after the Brexit vote. The responses support the idea of a continued shortage of staff, particularly in construction-related roles. A balance of 75% of respondents identified skills shortages as a threat to their business – by a huge margin the biggest threat facing them. When asked where the skills gaps were in their organisations, technical and building/ construction roles were both identified by more than a third of respondents. This is more than double the proportion highlighting skills gaps in any other area, reflecting housebuilders’ current focus on building out the development pipelines built up since the post-credit crunch recovery. Elliot Course, associate director at PSD, says that despite all the talk of post-Brexit catastrophe, very little has changed. “Clients did have a pause. But in most cases now it’s back to business as usual,” he says. “I have a number of clients with ambitious growth plans. There is still an acute shortage of people.” This view is supported by Karen Jones, group HR director at listed housebuilder Redrow, a firm whose 2,000-strong headcount has increased by a spectacular 25% in each of the past three years. Jones says that immediately after the vote, the firm had a momentary pause, but quickly realised it wasn’t experiencing any change in the market. “We never stopped recruiting. We looked around but realised it was no different,” she says. Hence the firm is continuing to grow, albeit Jones estimates that this year’s expansion will be in the region of 5% to 15% rather than the 25% previously experienced. While the continuing strong housing market is good news for Redrow overall, it also means that expanding the business with new people is as hard as ever. “We’re trying to grow outlets and sites. [Brexit] has not made it easier to recruit, and at the moment we’re having people approached by competitors at the same rate as before the vote. It’s not what I thought would happen at all,” Jones says. As both she and the survey confirm, recruiting technical staff such as QSs and engineers is particular cause for concern. Redrow’s story of continued but more controlled expansion post-Brexit appears to be typical, given the lack of any significant impact thus far on sales rates. The salary survey found 56% of respondents seeing an increase in job opportunities in 2016, down from the 75% who saw an increase in opportunities last year. So there’s expansion, but not at quite the same pace. Cenkos analyst Kevin Cammack says: “Outside of London, Brexit has essentially had no impact whatsoever. Production generally is going up, and most housebuilders will have net new hires over the next 12 months, though probably they’ll do it a bit slower than last year.” Hence skills shortages remain the big concern, with 83% of survey respondents saying the government wouldn’t be able to hit its build target. Former Countryside regional MD Chris Crook, now a consultant and a non-executive director at 1,800-home a year housing association Orbit, says he saw no pause post-Brexit. “The executive team at Orbit are still finding it a challenge to get the right people with the right skills and experience – the same factors are at play. As a consultant, I see an awful lot of large-scale development on the cards and the level of experience of people carrying it out is often woefully inadequate.” Steve Turner, director of communications for the Home Builders Federation, says the issue remains the sector’s “biggest challenge”. Recruitment puzzle However, if the housing market’s resilience post-Brexit vote has been a bit of a surprise, then the recruitment market in London could be seen as downright perplexing. In the capital there has been an undoubted hiatus in work. OUTSIDE OF LONDON, BREXIT HAS ESSENTIALLY HAD NO IMPACT WHATSOEVER. PRODUCTION IS GOING UP KEVIN CAMMACK, CENKOS How much are roles paid? Regional average Scotland Yorkshire and North- east North- west Midlands (including East Anglia) London South- east (Home Counties) South- west Wales Average annual bonus (% of salary) 2016 salary average 2015 salary average % change Managing director £158,000 £138,400 £142,000 £160,240 £201,000 £183,000 £158,000 £144,000 78% £160,580 £156,000 2.9% Finance £87,000 £86,000 £87,000 £90,000 £129,000 £101,000 £89,000 £89,000 74% £94,750 £92,625 2.3% Development £92,000 £83,000 £91,000 £93,000 £151,000 £109,000 £95,000 £85,000 72% £99,875 £97,250 2.7% Land and planning director £86,000 £87,000 £91,000 £94,000 £124,000 £111,000 £96,000 £82,000 76% £96,375 £92,750 3.9% Technical director £84,000 £86,000 £87,000 £90,000 £116,000 £113,000 £88,000 £85,000 65% £93,625 £89,500 4.6% Design director £80,000 £75,000 £81,000 £80,000 £98,000 £92,000 £85,000 £82,000 63% £84,125 £81,375 3.4% Commercial director £88,000 £86,000 £90,000 £93,000 £112,000 £105,000 £92,000 £83,000 70% £93,625 £90,375 3.6% Construction/ build director £86,000 £89,000 £93,000 £95,000 £118,000 £103,000 £96,000 £84,000 65% £95,500 £92,625 3.1% Sales and marketing director £84,000 £86,000 £93,000 £92,000 £121,000 £108,000 £94,000 £83,000 84% £95,125 £92,000 3.4% Project director £86,000 £84,000 £90,000 £87,000 £132,000 £112,000 £95,000 £82,000 74% £96,000 £93,500 2.7% Customer care director £78,000 £68,000 £71,000 £73,000 £85,000 £81,000 £80,000 £67,000 66% £75,375 £75,500 -0.2% »