Golden hellos double in scramble for managers

Jun 26 2007 by Nic Paton Print This Article

A third of British businesses now offer "golden hellos" to new managers, double the number of 12 months ago, as their efforts to find and hang on to suitable employees become increasingly desperate.

A study of more than 42,000 managers by the Chartered Management Institute and Remuneration Economics has found that eight out of 10 British firms are facing chronic problems when it comes to attracting managers and are being forced to offer an ever greater range of incentives to lure them in.

Three quarters of firms are also reporting having problems keeping the people they already have on board.

A key factor in this war for talent is that the tougher economic climate has led to a squeezing of wage increases, the research argued.

Average earnings for British managers have risen by 5.3 per cent this year, down on last year's 5.7 per cent, it found Ė the lowest movement in earnings since 1996.

The smallest pay rises Ė 2.6 per cent Ė were reported in the transport and logistics sector, with HR, at 5.9 per cent, topping the table.

In real terms, this meant the average wage for a British manager now stood at £47,449, with managers in Scotland enjoying the highest increase (8 per cent), although at £47,902 they were still only the third highest earners.

The top earning managers, unsurprisingly, were in London (£54,808), where take-home pay was 30 per cent higher than managers in Northern Ireland (£38,399).

Bonus payments, the research also revealed, played less of a role in overall take-home pay.

In fact this year, just six out of 10 managers were awarded bonuses, the second consecutive year that the proportion has fallen.

The average bonus payment was now £5,543, but there were significant regional differences, with managers in London receiving an average of £8,887.

But the most startling statistic to emerge from the research is the fourfold increase in employers reporting recruitment problems since 2002.

With eight out of 10 employers having difficulty finding the right calibre of staff, a third are now offering "golden hellos", compared with just 16 per cent in 2006.

More than eight out of 10 also said they would make "referral payments" to staff, up from six out of 10 last year.

Asked why they are experiencing difficulties recruiting staff, the majority of employers blamed a lack of qualified candidates.

Competition from other organisations also ranked highly, but employers admitted that they had failed to learn lessons from recent years.

More than half said they offered little in the way of training or career development, a figure that had risen from 37 per cent last year, while more than a quarter also admitted that restructuring had led to job insecurity (up from a fifth).

The survey found that resignations had increased and were now standing at seven per cent compared with 4.6 per cent last year.

These findings pointed to a return of the mid-1990s trend, with resignation rates higher among managers (4.6 per cent) than directors (3.5 per cent), said the CMI.

The CMI research echoes the findings of two other polls published this month, increasing concerns that Britain may be facing less a war for talent, particularly at managerial level.

Cranfield School of Management warned that Britain could be facing a critical shortage of key talent within three to five years owing to widespread complacency about the need to nurture star performers.

And a poll for the European Association for Personnel Management found that the ageing workforce coupled with rampant skills shortages meant that attracting and retaining talent would be the most critical HR challenge facing European businesses over the next eight years.

Jo Causon, CMI director, marketing and corporate affairs, said: "The steep climb in organisations reporting recruitment difficulties, mixed with an increasing number of resignations should be ringing alarm bells for employers.

"The marketplace is clearly tipping in favour of the employee, so if they are serious about retaining the best talent organisations urgently need to meet the needs and expectations of their staff," she added.