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A Question of Pay?

15 March 2006

A poor image that is not attracting young graduates or women into FM, and stagnating salary levels as too many candidates chase too few vacancies, are among the findings of the 2006 Hays Facilities Management Survey for PFM. Robert Smith explains

THE 2006 SALARY SURVEY FROM HAYS Facilities Management highlights that just as the industry has slowed over the past year, salaries at all facilities management levels have remained stagnant. This is largely due to a large number of candidates vying for only a small number of positions.

This large number of qualified candidates, coupled with a maturing facilities management market has had a strong impact on salary levels nationwide. For example, the typical salary of a Senior or Regional FM has remained stagnant compared to 2005 figures. Plus, for both more junior and senior levels alike, salaries have only marginally increased. With salaries for a Facilities Director typically ranging from £70-150,000, salaries have remained competitive despite an annual increase of only 3.7 per cent. A slight downturn in some regional salaries at the more senior levels, such as a Senior or Regional FM in the South East, is to be expected given the state of the current market.

The oversupply of candidates to the market also means that there is currently little pressure on employers to offer a generous employment package. Due to the nature of the industry candidates are often offered shorter working hours than many of the other construction and property sectors, and packages often include a car or car allowance, pension, healthcare, life insurance, mobile phone and laptop provisions. However, we are starting to see signs that this complacency is waning, with employers now offering performance related bonuses and share options.

North-South divide
The 2006 Salary Survey results highlight that there is still a strong North-South divide. Whilst a Facilities Director in Central London will typically earn £90,000, the average for the North West is only £55,000 – a substantial £35,000 difference. This trend is seen at all levels within the sector from a Facilities Director role to a Facilities Assistant role where the typical wage in the North East is £7,000 lower than Central London.

However, salaries in the North are slowly rising in line with the rest of the country and regions, such as Scotland, are proving more attractive because they have a more positive image of the work-life balance.

As Cedric Fyffe, Hays Facilities Managementv Business Manager comments: “I feel that these are very exciting times for facilities management in Scotland, both in the white and blue collar markets. No longer are qualified facilities managers leaving Scotland to advance their careers.”

Continuing the theme from 2005, we have noticed that the earnings potential for in-house FM’s is far greater than those employed by a FM services provider. This reflects the industry trend towards outsourcing to service providers. According to a 2004 BIFM study, around 75 per cent of FM services were contracted out – subsequently making in-house positions more scarce but offering a higher salary. According to Caroline Mahoney, Section Manager, Hays Facilities Management “We have noticed that inhouse salaries are far greater than those being offered by service providers and can be anything up to £10,000 difference. This is despite skills and experience remaining the same.”

This reflects the industry change towards FM service providers, a trend which is set to continue. Mahoney also suggests that service providers will have to take action to resolve the salary discrepancies or they will face problems recruiting and retaining quality staff.

Commercial bias
We have witnessed a significant increase in the number of senior FM posts that require a business development or commercial bias, where previously a technical or engineering base may have been sufficient. This focus has been largely at the expense of management and leadership skills.

According to Alex Cooper, Senior Consultant at Hays Facilities Management this commercial understanding has given facilities managers greater influence regarding senior management issues. This is important because Cooper suggests that “a support service team performing at its peak will rarely be noticed due to their high level of commitment in providing seamless facilities management to core business demand.” Cooper continues: “Facilities management professionals are finally being recognised as essential members of senior management teams, gaining respect and adding value to business.”

However, the problem remains that some employees are being promoted to management level without sufficient training. This is made more difficult by the challenge of obtaining the correct balance of technical FM specific training and general management training. One skill without the other can be extremely damaging. Plus, once the employee has attained a general business qualification, such as an MBA, they are more likely to move out of the facilities management industry.

A general malaise exists in the industry regarding formal training and qualifications, which has resulted in serious skills shortages in the market. This is mainly a problem at the £25-35,000 salary range where there is a large number of unskilled and under-qualified candidates. It is likely that the effect on salaries will be seen in a number of years time, or when there is an important project such as the Olympics which demands a large FM workforce. However, several initiatives have been put in place in an attempt to combat this skills shortage, including the government backed Asset Skills. Launched in January 2004, Asset Skills is attempting to drive improvements in training and qualifications, and highlights potential career paths and opportunities. Asset Skills identified that there are an estimated 70,000 people working as FM’s in the UK, although only around 1,000 are ‘professionally or academically’ qualified. The diversity of the sector makes the perceived skills gap in the industry hard to measure.

Significantly, it is not just the training itself that requires investment but the attitude of employers also needs to improve. In-house training and CPD are currently the most prevalent forms of training because employers are often unwilling to commit the time or money for their employees. However, the cost of employees not taking part in CPD should be taken into consideration. How can employees bring new ideas into the company if they aren’t up-to-date with the facilities management industry?

A significant opportunity for the future would be to develop and encourage formal qualifications which will enable FM to be established as a chartered discipline. Universities are beginning to recognise the FM industry. Not only will this improve career prospects for individuals, but it will also produce a more quantitative basis for recruitment, salaries and promotion and in the long term it will also help to raise the professional status of FM.

A survey by Leeds Metropolitan University in 2004 discovered that FM is usually a 2nd career and that over half of practitioners come from a construction or property related background. It also found that the 18-30 years age group was severely underrepresented in FM. It is clear that the industry does have a problem attracting and recruiting graduates, which may have been enhanced by the reliance on people moving into FM from other career routes, rather than straight from school or university.

According to Gavin O’Donoghue, a Hays Facilities Management Consultant, “There just aren’t enough opportunities for graduates in the market. Clients often seek ‘ready-made’ individuals who have specific experience in certain sectors. Very few are willing to take the risk with young individuals who could develop given the right opportunity.”

The facilities management industry is also blighted by an absence of clear routes of entry – making it less attractive to graduates. Whilst new qualifications are in development and several degree programmes have been introduced, there are no NVQ’s to allow direct entry from school. This has been noted and in an attempt to resolve this problem, a new Diploma for Construction and the Built Environment will be available from 2008 which provides a vocational route into either employment or higher education.

The unattractive image of the FM industry is not the result of a low starting salary as the table left shows. In fact, the typical starting salary in the FM industry is higher than a number of other professions, including teaching, marketing and accountancy. Surprisingly, surveying only commands a starting salary of £21,000 in Central London. Due to a number of transferable skills within the disciplines, facilities management competes directly with surveying; it is therefore surprising that facilities managers comand a starting salary £4,000 higher.

However, while salaries for FM roles compare favourably with a number of other professions, salaries for operational FM staff remain at a very average level. By mid-management level, the situation has changed considerably and a salary of £37,000 is considerably lower than the £40,000 offered to HR Managers and the £42,000 offered to Brand Managers and Accountants.

Due to the lack of suitably qualified candidates in FM it is widely acknowledged that more must be done to encourage women into the industry. However, similar to other construction and property professions, the profile of women in the industry is negative and stereotyping is prevalent. Horizontal and vertical gender segregation has developed in FM with men in more senior positions and more likely to manage technical areas. In December 2005, just 21 per cent of BIFM members were female. According to the Leeds Metropolitan University report in 2004 the culture of the FM industry “contain barriers to women’s entry and promotion, despite women achieving parity with men on their length of service, levels of qualification and CPD.”

In addition to cultural and image problems preventing women from progressing in FM, there are also problems due to the lack of flexibility in the industry. More flexible working practices would help to make the industry more attractive to women.

As with other construction and property sectors, the 2012 Olympic Games will have a huge effect on the facilities management industry. FM’s will be required for the event itself and to provide sustainable cover for the future. Tim Rudkin, Hays Facilities Management Senior Manager, comments: “Traditionally we have seen a number of candidates gain experience in London and then move to other parts of the UK but this is expected to reverse in the lead up to the Olympics.” A large-scale project, such as the Olympics, will help to readdress the problem of too many candidates in the marketplace and its positive influence on salaries will be seen in the years to come.

● Robert Smith is managing director of Hays Facilities Management

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