Despite being better paid this year than last, turnover among British managers is rising as they become increasingly frustrated by company pay structures and a lack of job satisfaction.
The annual National Management Salary Survey by the Chartered Management Institute and consultancy Remuneration Economics found that resignation rates increased last year as organisations failed to meet the needs of their staff.
The survey of 22,480 individuals also found that, despite an increase in earnings, frustrations among UK executives were growing.
Labour turnover in the year to January was 11.9 per cent, compared with 7.6 for the previous year, it said.
Resignations stood at 4.6 per cent for managers, compared with 3 per cent in the 2005 survey.
Requests for internal moves climbed to 4.9 per cent, from a low of 1.4 per cent 12 months ago, it added.
This desire to change jobs came despite employers offering an average increase in earnings of 5.7 per cent – the highest annual increase since 2002.
The average total earnings for managers in the UK were £47,055 last year, with managers in the north west of England coming bottom.
At £41,329 their earnings represented a 33 per cent difference against the top earners of inner London on £55,302.
Over the past year, 79 per cent of organisations had given bonus payments to their staff, compared with 70 per cent in the previous year.
This wide-scale distribution represented a return to the heights of 2002, the last time more than three-quarters of UK employers made bonus payments to all executives, said CMI.
The average managers' bonus was now worth 10.9 per cent of their salary, compared with 10.4 per cent the previous year.
Directors' bonuses were worth 38.9 per cent of their salary, against 38.6 per cent in previous year's survey.
Yet, despite this increase in earnings, employers are finding financial rewards alone is no longer enough to keep managers happy.
More than half the organisations reported retention problems in the 2006 survey (up from 45.4 per cent, last year) and six out of 10 admitted difficulty recruiting.
Asked to explain these retention and recruitment problems, many organisations cited dissatisfaction with the working environment, frustrations with company pay structures and a lack of skills or development opportunities.
A total of 20 per cent said restructuring or job insecurity caused uncertainty, 15 per cent suggested staff were unhappy with office location or relocation plans and nine per cent focused on the lack of facilities available at work.
Nearly four out of 10 claimed they lost staff because of the salaries on offer and many organisations also identified dissatisfaction caused by the distribution of bonus payments.
Although the overall incidence of bonus payments in organisations was high, a total of 62 per cent of managers received a bonus, compared with 69 per cent last year.
The proportion of directors receiving bonuses had, however, increased to 85 per cent, from 77 per cent.
More than a third admitted they offered little in the way of career development or training, and of these organisations, 29 per cent suggested structured training was not open to all staff (up from 23 per cent last year).
More than half (53 per cent) also said they could not find staff with the required specialist skills.
Jo Causon, director, marketing and corporate affairs at the CMI, said: "The reported increase in resignations is a matter for concern, especially as organisations continue to identify skills gaps in specialist areas.
"Of course, a certain amount of labour turnover can be a good thing, but if the current trend is allowed to continue it could breed dangerous levels of uncertainty and impact on the strategic development of UK organisations," she added.
In an attempt to redress the trend in resignations, the 2006 survey also showed that organisations were offering a wider range of benefits to staff.
These now included private medical cover (72 per cent), childcare vouchers (67 per cent) and life assurance of four times the salary (63 per cent).
Almost all offered some form of pension provision but the number offering contributory final salary schemes had dropped from 34 to 28 per cent.
Paul Campfield, director of Remuneration Economics, said: "The report, which is now in its thirty-third year, shows that many organisations are creating packages that offer the flexibility to match employees' differing requirements.
"With the increase in staff turnover this is an area that will inevitably attract greater attention as employers look to retain the best talent," he added.