1. XX.XX.200X BUILDING MAGAZINE BUILDING MAGAZINE 23.10.2015
A nal y s i s & C o mmen t
agendap26 / SimonRawlinsonp28 / RichardSteerp31 / BuildingLive:Wellnessp32
MakingHay…With huge demand for housing and a growing emphasis on the
private rented sector heating things up even more, housebuilders
are willing to pay big money for skilled employees.This year’s
housebuilders’ salary survey finds that wages and bonuses are
both on the up. But how long will it last? IainWithers reports
newsanalysis/housebuilders’salaries/23
Nowadays candidates can
be much more selective,
while clients haveto be
more resourceful when
looking atcandidates
ElliotCourse, PSD
I
t may qualify as the least surprising news of
the year – housebuilders got another pay rise
last year. Building’s annual housebuilder salary
survey – compiled by recruitment firm PSD Group
– confirms directors are taking home more money
than ever, reaping the rewards of a buoyant sector.
The average salary rise across housing director
roles was £6,000, to £96,000, while the value of
bonuses as a proportion of a director’s income
ticked up one percentage point to 73%. Managing
directors led the way with the largest salary rises on
average, of £14,000, topping up their basic income
to £156,000.
Yet beyond the giddy headline pay figures, the
survey also throws light on several significant
shifting dynamics within the sector. Among them,
that directors would now much rather work for a
privately owned developer than a PLC; that skills
shortages and persistent problems with the
planning system could yet stymie the sector’s
growth; and that the private rented sector (PRS) is
tipped as the sub-sector most likely to see growth
outside the top ten housebuilders. Building speaks
to industry leaders navigating this changing
landscape to find out more.
Pinchpoints
When asked which factors were most likely to have
a negative impact on the housing sector, directors
overwhelmingly chose skills shortages – a
whopping 91% of respondents chose this, with
planning problems coming second at 60%.
Similarly, these two factors were picked as the
biggest threats to the sector, by 45% and 33% of
respondents respectively.
According to Elliot Course, associate director at
recruitment firm PSD, which compiles the survey,
the upshot of this skills shortage has been a shift in
power from the employer to the employee,
reflected in higher wages and bonuses. He says: “In
the recession it was a case of ‘it’s a job, take it’, but
nowadays candidates can be much more selective,
while clients have to be more resourceful when
looking at candidates. There are lots of pinch
points where specific skills are in high demand”.
When asked what gaps were expected at their
organisation over the next five years, sales and
marketing came top (47%), followed by land and
planning (42%) and commercial (30%).
As candidates become more picky, there’s been a
change in the types of businesses they’re looking to
join. When asked which type of organisation they’d
rather work for, 84% said a privately owned
developer, followed by housing associations or
registered providers (67%), leaving PLCs a distant
third place (46%). Course is not surprised: “In a
recession candidates go to big business for shelter.
But now we’re in a progressive market. Candidates
feel more in control of their destiny and many
want to join a small business where they can have
more control over their career progression.”
One such business is rapidly-growing Northern
housebuilder Story Homes. Operating across
Cumbria, Lancashire, North-east England and
South-west Scotland, the firm is aggressively
expanding – it is on course to turn over up to
£130m in the year to next March, up 400% on four
years ago. The firm is out to recruit 75 new people
in this financial year, taking it to 225 staff.
The firm’s chief executive Steve Errington
explains that his business is facing challenges
recruiting to meet its expansion targets: “It’s
getting much tougher to recruit quality staff,” he
says. “Lots of counter offers are coming back as
you’d expect [and] we’ve had to sweeten the deal.
People are really reluctant to lose certain skills. It’s
definitely getting tougher.”
One tactic Story employs to both retain and
attract staff is a generous bonus policy, with staff
throughout the business offered incentives, from a
potential 25% bonus at the lowest ranks up to 50%
and beyond for more senior staff. “It’s a kind of
John Lewis model,” Errington says. “We’ve had a
90% pay out rate in the last two years and we’re on
target to be 90-100% again.” Asked if the current
rates of salary and bonus increases are sustainable,
Errington simply says “no”. Story has introduced a
series of graduate, school leaver and apprentice
programmes “to train and grow our own talent” in
order to mitigate the risks of rapid pay increases,
Errington says.
Across the sector as a whole, the survey found
many firms employing similar tactics – when
asked how their companies were looking to bridge
the skills gap, over half cited graduate training
schemes and full-time education, retaining
existing staff and increasing training budgets, at
55%, 55% and 52% respectively.
PRSpotential
The private rented sector (PRS) was identified as
the hottest housing subsector in this year’s survey.
Almost a quarter of respondents (24%) said it
would see the most growth outside the top 10
housebuilders, followed by registered providers
(19%) and SME developers (18%). Course says the
“embryonic” PRS sector is fast becoming a focus
for PSD and its clients alike. “Residential
development is cyclical, some would say bipolar,”
he says. “With PRS you get a constant return for
your money.” Course says PRS developers are
recruiting from “sister markets” such as “student
Discipline 2011Average 2012Average 2013Average 2014Average 2015Average
Managing director £134,000 £133,000 £138,000 £142,000 £156,000
Finance director £78,000 £78,000 £83,000 £86,000 £93,000
Development
director
£80,000 £81,000 £85,000 £88,000 £97,000
Land & planning
director
£73,000 £73,000 £77,000 £85,000 £93,000
Technical director £74,000 £74,000 £82,000 £86,000 £90,000
Design director £68,000 £68,000 £72,000 £76,000 £80,000
Commercial
director
£73,000 £73,000 £75,000 £80,000 £90,000
Construction / build
director
£73,000 £74,000 £78,000 £85,000 £93,000
Sales & marketing
director
£72,000 £74,000 £81,000 £86,005 £92,000
Average salarybydiscipline and year
Methodology
The survey was undertaken
by PSD Group, which
specialises in senior level
search and selection
across the residential and
property sector. There
were two elements to the
research: an attitudinal
survey that targeted
approximately 7,000
individuals at senior
management level across
the housebuilding sector,
and data from placements
made by PSD over this
period.
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2. 23.10.2015 BUILDING MAGAZINE
24/newsanalysis/housebuilders’salaries
Scotland
Yorkshire and
North-east
North-west Midlands
(including
EastAnglia)
London South-east
(Home
Counties)
South-west Wales Average
annual bonus
(shown as a
% of salary)
Salary
average
Managing
director
£145,000 £135,000 £144,000 £156,000 £195,000 £178,000 £152,000 £143,000 81% £156,000
Finance
director
£85,000 £86,000 £86,000 £88,000 £125,000 £98,000 £87,000 £86,000 75% £93,000
Development
director
£90,000 £82,000 £90,000 £90,000 £145,000 £105,000 £92,000 £84,000 77% £97,000
Land and
planning
director
£85,000 £87,000 £91,000 £91,000 £110,000 £104,000 £93,000 £81,000 80% £93,000
Technical
director
£83,000 £85,000 £89,000 £87,000 £105,000 £97,000 £86,000 £84,000 66% £90,000
Design
director
£78,000 £73,000 £79,000 £78,000 £92,000 £89,000 £82,000 £80,000 62% £80,000
Commercial
director
£87,000 £86,000 £89,000 £90,000 £101,000 £97,000 £91,000 £82,000 68% £90,000
Construction /
build director
£86,000 £88,000 £92,000 £92,000 £109,000 £97,000 £94,000 £83,000 63% £93,000
Sales &
marketing
director
£83,000 £83,000 £92,000 £89,000 £114,000 £103,000 £91,000 £81,000 86% £92,000
Average salarybyregion and discipline
■New Development arm
of a main contractor
■Registered providers
developing more
speculative products
■ SME Developers
gearing up again
■ New entrants into
the market
■ Oversea Investments
■ Privated Rented
Sector (PRS)
■ Government Land Releases
■ Other
9%
10%
7%
24%
7%
6%
19%
18%
Wherecanyouseegrowthintheresidentialsectorcomingfromother
thanthetoptenhousebuilders?
accommodation, commercial development,
residential development and mixed-use”.
For Paul Belson, non-executive director at
property services giant LSL, which manages
30,000 rented properties for both individual and
institutional clients, the attraction of PRS is
obvious. “There’s massive bandwidth to grow
PRS,” he says. “We are right at the beginning of it.
There are so many people coming out of university,
those who start work … they simply don’t have
enough for a deposit.”
Belson is a former member of the government’s
PRS task force, set up to promote expansion of the
sector and to fire up build-to-rent schemes through
planning and financial incentives. He notes there
is huge potential for institutions to invest and run
PRS schemes: “In the UK just 1% of PRS is run by
large institutions, yet it’s 37% in Holland.”
As build-to-rent is relatively new to the UK,
recruiting the right people to design and deliver
these schemes is even tougher. “The building itself
is a hybrid of boutique hotel, serviced apartments
and student accommodation,” Belson says. “It’s a
blend of skills. You have to understand property
management. There are a lot of requirements
needed to create a rented community. There is
definitely a shortage of people in this area.”
For those working within housebuilding, the
range of career opportunities is now plentiful, as
are potential financial rewards. How long can it all
last? That’s the million dollar question, one that
the PRS developers think they have an answer for.
Outside of that niche, housing professionals can be
forgiven for making hay while the sun shines.
»