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26 May 2019
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PAY FOR PERFORMANCE

Bradford Keen investigates whether a bigger pay cheque is a realistic aspiration in the current market.

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07 May 2019 Bradford Keen


When FM firms started to realise that their staff didn’t just care about pay – they wanted supportive management, training and development, flexible hours and a workplace that helped them thrive – they began offering much the same as each other. Now that so many employers provide these non-financial benefits, it’s predictable that employees, once more, will start thinking about higher earnings.


That’s the theory of Chris Roberts, facilities manager at Computershare, and it’s a reasonable explanation for the spike in people citing salary as their primary consideration in the 2018/19 IWFM Pay & Prospects survey. 67 per cent of respondents put salary top of the list of factors in their employment, compared to 58 per cent back in 2017. 


The new IWFM report shows that salaries above the £46k bracket have in fact been growing. Indeed, overall 83 per cent of respondents reported an increase in their salary at their last pay review, the highest proportion since 2015. Furthermore, 85 per cent said they expect an increase in salary at their next pay review, which compares to the 77 per cent in 2017.  This represents the most optimism from respondents about a likely pay increase for four years. Fewer respondents this year reported no change in their salary (16 per cent compared with 22pc in 2017) and just 1 per cent reported a decrease. Those who were active IWFM members were more likely to report having received an increase.


Nevertheless, the data also shows that fewer respondents are reporting growth in salary brackets below £46,000.


The ‘sameness’ offered by many employers is making attracting and retaining skilled professionals much harder, suggests Roberts. “Even on the lower levels of facilities administrators and coordinator roles, if you’re trying to find someone with experience and knowledge,you’re definitely having to pay £2,000 to £4,000 more a year than you would have 18 months to two years ago for the same person.”


That same time frame has also seen increases in the national minimum living wage, which Roberts says may have helped put a brake on pay for mid-tier professionals as firms sought to cover the increase in salaries for their cleaning and security personnel. 


Andrew Hulbert, who set up and is now MD of service supplier Pareto FM, says that he remains surprised at the low rates being offered for certain managerial positions. “We are bold in how we pay our staff,” he says of Pareto’s own policy. “I would prefer to pay someone a bit more if it prevents them going elsewhere for a small increase, but I am still surprised at some of the low rates. That’s partly, I think, why people are saying it (pay) is a determinant.”


 FM still has an issue whereby pay can vary dramatically between similar positions at different employers on the client-side, remuneration for a workplace manager in the corporate finance sector can be considerably higher than for the same kind of role in a charity.


Ultimately, if employers don’t pay, it is safe to assume that employees will look elsewhere. This is particularly likely with larger service providers, according to FM recruitment expert and managing director of Hexagon FM, Nicola Lathbury. Such firms, she says, continue to offer “fairly low” salaries despite the sector’s talent shortage. More worrying, she continues, is that some will also list a certain salary package but drop it when they make an offer to the successful candidate. 


“They’re struggling to attract the right talent and, when they do, they’re not offering enough money to get the people to accept the job,” says Lathbury.


These organisations, operating on “stupid margins”, bid for contracts first and figure out how to deliver afterwards, says Lathbury, resulting in “squeezing the candidate for less money”.


Big versus medium 

Naturally, when employers fail to pay what they say it leads to distrust, and employees seeking alternative employment. “We tend to find companies with the best retention levels are  the medium-sized providers that aren’t going for contracts where it’s a race to the bottom,” and which “work with an intelligent client,” says Lathbury.


For many, this critique will sound all too familiar and, to some, reductive, hooking us back to the perennial debate over big versus small providers. However, ‘sameness’ and size are two criticisms Richard Phillips, co-founder of “relatively small business” B38 Facilities Management, levels at larger providers. 


“It’s likely that the [survey] trend is a result of the industry consolidating with the big players, combining to become very similar to one another in terms of their entrepreneurial spirit and outlook, making them somewhat stale,” Phillips explains. “With more and more FMs who work for these bigger companies becoming used to the same corporate outlook and big company processes and mentality, the biggest driver inevitably becomes salary as the key differentiator.”


A macro perspective

When economic uncertainty is a concern, argues Beth Goodyear, founder of FMHS Consulting, it results in a lack of confidence in business and a preference to ‘wait and see’ rather than ‘get on with it’, which affects recruitment and training decisions and forward planning. Of the current employment scene, she says: “Organisations have been more likely to avoid headcount and opt for short-term strategies using temps and contractors rather than permanent roles. But this also means that candidates can chop and change roles, resulting in organisations not being able to ‘find the right person’.”


Another emerging factor is FMs of European descent returning to the continent for improved job certainty, which Lathbury says is happening because of Brexit. Frustratingly, there are plenty of FMs from India, Saudi Arabia and the UAE wanting to work in the UK “but companies don’t want to go through the hassle of sponsoring their visas”, she adds. 


“It’s like a double-edged sword because that labour has to come from somewhere and it’s not here within our market,” she explains. “We have not invested enough in apprentices and people as they come up through the ranks. It almost feels as a sector we have done the bare minimum to keep moving but now we have hit a stumbling block and we haven’t got anywhere to go.”


Hierarchy of needs

Brexit and the recent high-profile tumult among service providers means uncertainty is rife. Consequently, most FM professionals will be looking for “secure and robust companies”, says Rezki Karar, account manager at Sodexo Defence and Government Services. And indeed, while survey results point to a frustration with pay rates, they also show a rise in the desire and importance of job security – it being valued above career prospects. 


But while job security is important, the prevailing narrative says we all want to feel valued, have purpose and enjoy balance. 


Roberts also cites effective management as key to  keeping itchy-footed FMs in their role, and this depends on leaders developing the correct soft skills (see box, right) to be well-rounded managers rather than technically skilled people. 


Respondents were most likely to disagree with the proposition that their employer “offers excellent succession planning” (58 per cent), but also that they have “a high turnover of staff “ (53 per cent). Next to leadership, Roberts says that employers, especially those in the private sector hiring for in-house teams, need to overcome their concern that training and development of staff will cause them to desert. In fact, it is more likely that employees will stay, he says.


Hierarchy of needs

Company leaders also need to tap into the thinking of the age.  Younger managers – those between 20 and 35 – are more likely than their predecessors to evaluate a potential employer based on who is on the organisation’s board. Do the faces they see reflect the kind of organisation that potential employees want to be associated with? Can they identify with their values? For some, this has become a determination every bit as important as  pay.


“If you look at the gender pay gap, it’s really intriguing,” says Hulbert. “The SME and the big players are worlds apart.”


Diversity, values and support are desirable, but so too is flexibility, which Lathbury says should be for everyone, not just working parents. Unfortunately, UK companies have not grasped the importance of this demand, Lathbury says, and still measure employees’ contribution in hours instead of output. Only with a shift to the latter metric can flexibility properly work.


Employees also have to play their part, which is why Goodyear warns professionals of the ‘Tinder effect’ of too many choices and a nervousness to settle in case there’s a better role elsewhere.


“Taking time to understand what you want and having a plan with short, medium and long-term goals is key,” Goodyear says, “as it ensures any decisions or changes made are more likely to be the right ones.” 

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