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News Release from: Chartered Management Institute | Subject: Staff retention rates
Edited by the Buildingtalk Editorial
Team on 28 June 2005
Construction staff retention rates
nosedive
Staff retention rates nosedive as construction sector falls to bottom of earnings league table, despite the frequency and value of bonus payments.
Organisations in the construction sector are struggling to hold on to their employees, despite the frequency and value of bonus payments The 2005 National Management Salary Survey also shows that while benefits packages have improved, the construction sector is the lowest paid in the UK
This article was originally published on Buildingtalk on 28 Nov 2007 at 8.00am (UK)
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But in spite of the high number of people given bonus payments, 45.4 per cent of companies are reporting retention problems - the worst reported figure for 15 years.
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Salaries (43.2 per cent) and job security (40.9 per cent) were also cited as reasons for job changes.
The findings reveal that the average total earnings for managers in the construction sector are GBP39,286, putting it last in the UK 'earnings league table'.
It is interesting to note that managers' salaries account for a large proportion of 'guaranteed take home pay' because at GBP2,017 (for managers in construction), their bonus is worth 5.1 per cent of total income.
Directors, in contrast, rely on bonuses for 38.6 per cent of total earnings.
This differentiation is important as company and personal performance affect bonuses for 65.7 per cent of directors, compared to 56.2 per cent of managers.
The survey, of 20,989 individuals, also shows changes to the nature of benefits packages.
Thirty years ago the norm was four weeks holiday per year, with 61 per cent taking 20 days.
That figure is now 78 per cent, with executives taking between 21 and 25 days annual leave.
'Signing on bonuses' have almost doubled over the last year (to 14.1 per cent) and many businesses (51.4 per cent) offer 'referral payments' to staff recommending potential recruits.
There is clear evidence in this year's survey that organisations are finding it difficult to attract staff.
43.4 per cent said they had experienced recruitment difficulties, up from 30.9 per cent last year.
Of those companies facing recruitment problems, more than two-thirds (69 per cent) put them down to a lack of candidates with specialised skills.
Mary Chapman, chief executive of the Chartered Management Institute, says: "The reported shortage of managers and staff with relevant skills is a concern because competitive advantage can be threatened if employees lack the ability to carry out their roles".
"Worse still, many organisations admit that they fail to provide adequate development initiatives, even though it is a major reason for leaving".
"If employers are serious about reversing the current recruitment and retention trend, they must address this issue and develop incentives that suit employees' needs." In an effort to tackle the recruitment and retention problems, organisations are boosting their incentive schemes, with most (91 per cent) now giving cash alternatives to traditional perks.
The popular benefits are: Invest in your future: provision of a personal pension scheme (98.9 per cent).
Although those offering final salary schemes has dropped significantly - from 76.9 to 32.7 per cent in five years - one in five companies provide non-contributory plans for all employees.
Rest assured: almost 67 per cent give life assurance cover of up to four times the salary (compared to just over half in 2004).
Health check: Almost all organisations provide private medical pensions and more than half will not even ask employees to pay the excess in the event of a claim.
20 per cent also provide dental health care.
Commenting on the findings in this year's report, Paul Campfield, director of Remuneration Economics, says: "This year's survey shows that movements in salaries have remained consistent to last year's figures".
"However, the value and frequency of bonuses means that movements in overall earnings have changed significantly." In regional terms, managers in the South West gained the most in terms of combined earnings (up to 7.1 per cent increase) and those in the North West did least well (3 per cent increase).
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