There’s no way to sugarcoat this: contractors’ pay is down and benefits are under threat, too. Roxane McMeeken looks at the figures in the Hays 2010 salary survey and asks how employers and employees can stick together through the hard times

The recession has pitted employee against employer in an increasingly nasty fight. That’s the finding of the Hays Construction 2010 contractors’ salary guide, compiled for Building. About 96% of firms have frozen pay, for example, and staff are fighting back in the only way they can: last year, their number one concern when changing job was “finding engaging work”; this year it’s “basic salary”.

The survey shows an overall drop in pay, with typical salaries increasing in only a handful of disciplines. Pension cuts are looming, too. Meanwhile, workers are widely expected to flee their current employer at the first sign of an upturn in the jobs market, as Building has reported previously.

So the whole tone of labour relations has changed. But before it deteriorates further, it’s worth considering how to make a truce.

Here, we look at how things got so bad and how you can develop your career, and the careers of your staff in a climate where pay rises aren’t an option and changing jobs won’t necessarily get you more money.

How it came to this
Andrew Bredin, managing director of Hays Construction, says the survey shows that “employers and employees agree that the construction sector is expected to remain in recession this year, before returning to modest growth in 2011”.

As a result, almost half (49%) of employers have no plans to recruit additional staff before the end of the year. But it’s not all gloom. Bredin says 18% do plan to take on staff this year. But it’s not a happy picture.

A glance at the latest construction industry statistics explains why. New orders fell 14% in the second quarter of this year, from 13,482 in the first to 11,606. And they were 9% down on the same period in 2009, when 12,714 orders were recorded, according to the Office for National Statistics.

The outlook is hardly more cheering, with the industry forecast to slip back into recession. The Construction Products Association expects output to fall in the remaining months of this year and to continue to decline in early 2011.

The trade body offered a glimmer of hope, however, predicting that things would pick up in 2012.

Impact on salaries
The trends revealed in this year’s survey reflect this pessimism. Hays, which records salary data for existing roles and job vacancies, found that employers were cutting in both areas. About 16% of contractors have imposed pay cuts on existing staff.

Meanwhile, the research on vacancies showed that the greatest fall in salaries over the past 12 months was in QS positions at contracting firms: senior QSs’ pay fell by nearly 5% and assistant QS salaries were down almost 8% (table right).

Lynne Crowe, a manager at Hays, says: “Their work saving costs on existing projects is highly valued at the moment but the lack of projects overall means they’re in low demand.” She estimates that there are half as many projects on site today than there were two years ago, a period when contractors’ QSs were highly sought after.

Similarly, Hays’ research on vacancies found that salaries for general foremen had dipped 6%, and pay for site agents was down almost 14% on average.

Senior estimators and senior buyers can take some encouragement, as salaries for new appointments increased by 2.4% and 1.5% respectively, owing to a renewed emphasis on tendering. Crowe says: “Estimators and buyers at all levels are in demand. Everyone is pricing any bit of work they can - [this is] based on thinking that the more work you can tender for, the more chance you have of winning some.”

Health and safety experts have seen the biggest rise in salaries for new appointments (right). Aine Flood, senior manager at Hays, says this is because these professionals are still in relatively short supply.

That said, employers are expecting more from health and safety experts during the downturn. “They want people who are innovative and cost effective. They want people who can deliver training to hundreds of people so they don’t have to outsource it to a big company.”

Employers are less keen on “the sort of guys who go out on site and stop work happening, because they can’t afford this in a downturn”.

Extra blows
As employers grapple with the economic conditions, 88% have chosen to reduce staff bonuses and 67% have trimmed benefits. They are also cutting - or looking to cut - working hours: 88% are considering bringing in a shorter working week. A further 43% are weighing up whether to bring in flexible working and 26% are considering whether or not to enforce it. Bosses are also thinking about encouraging unpaid sabbaticals (71%) and reducing hours (67%).

One of the hardest blows for workers, though, is that more than a third (38%) of employers are considering reducing pension contributions.

Faced with this, it’s little wonder that employees are plotting to leave at the earliest opportunity and coolly placing the salary on offer at the top of their list of career priorities.

Hays found that basic salary was the priority for 26% of respondents, who picked from a list of 12. The security of the employing company was picked by 15% of respondents, as was interesting and engaging work. Length of contract was also important (11%).

Healing the rift
These sentiments may be understandable, but Kate Tilley, human resources director at WSP, advises people not to turn against their employer and focus solely on what they can gain financially.

“People who have seen pay freezes and redundancies at their company can develop the idea that they are uniquely hard done by, when in fact, similar things are happening at all firms.”

Tilley says the human resources department offers the key to improving careers, and hence employer-employee relations and morale. For many employees the best solution is to stay
put - something they may not have any choice over anyway - and to try to make progress through training and development.

Tilley advocates all kinds of development, from training with your professional institute to mentoring and secondment to another team.

Judith Bufton, head of leadership and development at Wates, agrees. “In adversity there is lots of scope for learning, whether this means going the extra mile to win work or increasing the amount of time you spend with customers.”

Learning, she says, could heal the rift between employers and employees.

How to boost your career without changing job

  1. Work out where you want to be. Kate Tilley, HR director of WSP, says you should first identify where you want to go in your career and then find out the routes to your goal.
  2. Don’t be afraid to ask. Tilley says: “In tough times people tend to put their heads down as they think it’s dangerous to do otherwise, but it’s good to ask how you can develop your career or your staff as it shows enthusiasm.”
  3. Be flexible and mobile. Tilley says: “In this downturn, the people who have put their hands up for roles around the country have tended to be those who’ve already been through a recession. Follow their lead and have a ’try anything’ attitude.”
  4. Seek people who need help. Judith Bufton , head of leadership and development at Wates, says: “See if you can help busy teams. You could get involved with a bid, which could broaden your experience of customers and types of buildings.”
  5. Identify a business improvement. Bufton says if you can work out a way to improve something at work, you could make it your project to implement it, which could boost your CV.
  6. Get a mentor. Bufton says: “Seek out someone you admire or respect and ask for monthly or quarterly meetings to learn about the business, their job and what’s happening in your industry. Most people will be flattered if approached.”
  7. Make a business case for your development. Bufton says: “Demonstrate that the training you want will help the business. For example, attending a course on sustainable technology might bring fresh ideas into the company.”

For the full listings view the attached PDF.