Market Pressures

15 March 2007

With salary levels largely stagnated across the country, Tim Cook analyses the latest salary trends for FM professionals and explores the pressures on opportunities for careers in the sector at all levels

OVER THE PAST 12 MONTHS, the profile of facilities management has continued to grow and the market remains buoyant. Despite this, salary levels have largely stagnated and don’t show any dramatic changes - strongly influenced by a large candidate pool and a relatively small number of positions. Compared to our 2006 figures, the largest increase for a specific FM role is 2.5 per cent growth for a facilities director, with an average salary across the UK of £61,500. For a facilities director in London this rises to £92,500. This is the result of a lack of senior, experienced candidates which is forcing figures upwards.

Salary increases have also been seen at facilities assistant level, reflecting the lower numbers of junior candidates that we have seen entering the profession. On average, a facilities assistant can now expect to earn nearly £21,000.

Similarly, there have been no significant increases or decreases at a regional level. The largest increase in average salaries is 4.8 per cent in the South West, which can be attributed to a growing FM market. Of course, we are still waiting to see the impact that the Thames Gateway development will have on the FM market, although we aren’t expecting this to take effect until around 2009-10.

There is very little disparity in salaries across the UK. For example, there is only £7,800 difference between average salaries in the South East and the North East. However, in some areas of the country where FM is still a growing sector, its value hasn’t yet been embraced and its contribution to efficiency has not yet been understood. This is reflected in salary differences between Central London and the rest of the UK. The salary weighting afforded by FM professionals working London has reduced at the majority of levels, with only £2,000 difference between London and the South East for an operational FM. However, the difference is most pronounced at facilities director level. In Central London a facilities director typically earns around £92,500, while in the South West this is reduced to a typical salary of £65,000.

On the move
There has also been a noticeable trend of FM professionals moving out of London, reflecting the growing profile of FM out of London in places such as the Midlands and Scotland. Employees are increasingly looking to move out of London with few formal qualifications. This trend is mirrored by the BIFM moving training opportunities outside London to cities such as Glasgow, Belfast and Edinburgh demonstrating that it is no longer necessary to stay in London to gain formal qualifications. Of course, FM professionals are also enticed away from London with the prospect of a better work-life balance, due to a lower cost of living.

Although employers today may be struggling to find sufficient numbers of experienced candidates, certain skills are in demand. For example, BIFM membership is almost a prerequisite for the job. Cedric Fyffe, senior manger of Hays Facilities Management, says: “Although employers are definitely showing a preference for client-facing candidates with strong leadership skills, experience alone is no longer enough. At the more junior levels it isn’t such an essential requirement.”

Another key skill sought by employers, is experience in environmental issues, particularly in light of the recent focus on carbon efficiencies. It is proving attractive to candidates on two levels: employees are keen to work for a company with strong Corporate Social Responsibility (CSR) policy, plus they are eager to be involved professionally in this area. Candidates who possess experience in environmental issues are few and far between, leading to increased salaries. Karen Nodwell, regional manager at Hays Facilities Management, comments: “The task of meeting environmental standards and following a company’s CSR policy often falls to the FM team. It can be a rewarding area to work in and can even help to improve retention levels.”

Health and safety is another growth area for FM. Health and safety qualifications, especially NEBOSH/IOSH, are essential requirements in recent roles and once again candidates possessing such experience and qualifications are highly sought after. “We now have a specialist division focussing on health and safety roles. This is as a direct result of extensive growth in the sector” adds Karen Nodwell. A commonly asked question is whether FMs will get more money working in-house or whether they should in fact work supplier side.

However, this question is not quite so simple as salary alone is rarely a deciding factor in whether or not to take a job. Not only are benefits packages a strong consideration, but the culture of the organisation and prospects for both training and development are also key influencers. Generally, in-house positions tend to pay slightly more and employees usually receive company-wide benefits – some of which can be substantial, particularly in the larger corporate companies. Longer term benefits are also greater, as employees are rewarded for their loyalty.

The search for a challenging role is cited highly by candidates when they are looking for a job, which is where working for a service provider has a strong advantage. This, added to marginally higher salaries and larger bonuses helps to differentiate the two positions, although the gap is definitely narrowing.

Salary differences between the public and private sector are marginal, although PFI work isa growing field with good prospects. According to Sinead Howe, consultant at Hays Facilities Management, “Working on a PFI contract is extremely attractive because the long partnerships provide added job security. However, a PFI contract only has limited funds available and is therefore unable to add substantially to salary packages to entice better candidates.” Although, as is generally the case, the benefits packages in the public sector remain strong and candidates with PFI experience are in short supply and so can command higher salaries. We are finding more candidates requesting public sector work, but candidates should bear in mind that it is difficult to cross over without prior experience.

Karen Nodwell says, “The PFI market is growing massively and is definitely here to stay. Commercial PFI roles have a much better earning potential and more opportunities. Candidates should bear this in mind when deciding on which career path to take.” Concern is beginning to increase that there may be a skills drain to East London in the years leading up to the Games, as the Thames Gateway development gets underway. It signals a significant opportunity to raise the profile of FM – as it will be an integral part of the development and will require relatively large numbers of FM professionals. However, any impact is unlikely to be felt until much closer to 2012.

Diversity has been a strong focus for employers in recent years. Many organisations now have specific departments to monitor diversity levels and create strategies to improve them. The traditional issue in construction is a lack of women, however, FM is not so greatly affected by this.

“Women play a strong role in FM. Not only is the proportion of men and women fairly balanced, but women also reach the senior, decision-making positions too” says Tim Rudkin, senior manager at Hays Facilities Management. Karen Nodwell adds, “The profile of women within the industry is definitely improving. It is strengthening all the time as the FM industry continues to move away from its traditional engineering bias”.

Indeed, according to Asset Sills, the Sector Skills Council, the FM workforce is 55 per cent male. Compared to a traditionally male profession such as building services, this male to female ratio is positive for FM.

Diversity has also come under question over the past 12 months with the introduction of new age discrimination legislation on 1st October 2006. It has had a direct impact on employers’ recruitment strategies and policies, for example with regards to advertising. In some cases, it has opened new doors for candidates, but largely ageism is not an issue in an industry which is perceived to be a career for second jobbers. For example, according to Asset Skills, 37 per cent of the FM workforce is aged over 50. This is compared to a national average of 25 per cent in this age bracket.

Cedric Fyffe comments: “For many employers the new legislation has simply meant removing certain descriptions and terms from job advertisements, as they already had diversity policies in place. FM isn’t the type of industry where age is an issue because experience really is valued. Plus of course, the industry is now looking for ways that it will appear as more attractive to a younger generation.”

Employers are starting to respond to the issue of diversity by introducing benefits such as flexible working. For example, more employers are offering the option of working from home – particularly for those in higher level positions. According to Tim Rudkin, “not only does this allow them to retain the best candidates, but it also appeals to working parents, due to the unsociable hours associated with some positions and helps to create a more diverse workforce.”

The FM market continues to suffer from a lack of graduates entering the market. Despite our findings in last year’s survey that starting salaries for FM graduates are comparable to other industries, such as engineering and sales, the perception remains that graduates can earn more money and receive better benefits working in other industries.

Graduates
In addition, although salaries have increased for the junior positions, this hasn’t had a dramatic effect on the number of graduates because most people still enter FM at a later stage in their career. Cedric Fyffe says: “Luckily, employers tend to prefer on-the-job experience and are willing to support strong candidates through their qualifications whilst working. However, there has definitely been an over-reliance on people moving into FM from other related career routes, rather than straight from school or university.” According to Asset Skills, the net increase in employment between 2004 and 2014 is predicted to be almost 30 per cent. Specific graduate training schemes for FM are rare and employers need to take steps to readdress this and retention levels if they are to meet these recruitment levels.

Traditionally, the oversupply of candidates to the market puts little pressure on employers to focus on strategic retention measures. One of the strongest issues surrounding retention is a general dissatisfaction with the level of career opportunities for employees. In a recent study by the Chartered Management Institute (CMI), one third of organisations admitted to losing staff because they offer limited career and promotion opportunities.

Karen Nodwell comments: “The situation has now developed so much that it has become a vicious circle – bad retention means employers are unwilling to invest in training, which in turn means that employees get disgruntled by the lack of development opportunities and are more likely to leave.” This is particularly true at a more senior level, where employees are in a strong position because of a lack of experienced candidates.

The CMI study also indicated that 1 in 5 managers are motivated by the prospect of recognition from their employer, while others are driven by the status they hold amongst colleagues (11 per cent) and competing with others in the sector (9 per cent). Unfortunately, the research also indicated that despite high levels of motivation from managers in the FM sector they believe that the impact they have on business performance goes unnoticed. As the FM industry continues to grow at such a fast rate and its profile increases, this is likely to change – leading to vast improvements to retention and recruitment levels and of course, higher salaries.

● Tim Cook is MD of Hays Facilities Management, a leading specialist recruitment consultancy for FM professionals, working with the top employers in the sector, Hays Facilities Management places jobseekers in permanent and temporary positions.