As the credit crunch continues to bite and the cost of living spirals, these are anxious times for staff across all sectors. So it’s no surprise that the 2008 Hays Human Resources Salary and Benefits Survey, revealed exclusively to Personnel Today, shows a mixed outlook for those working in the HR profession.
Despite widespread economic gloom, the overall rise in HR salaries is an encouraging sign. In the private sector, wages are up 2.4% on last year, compared with an even more favourable increase of 4% in the public sector.
According to recruitment firm Hays, a head of HR in the private sector can expect a salary anywhere between £40,000 and £120,000, with an average salary of £67,333, compared to an average of £64,640 in 2007. In the public sector, salaries for the same position range from £35,000 to £100,000, with an average salary of £58,600, compared to £56,256 last year.
The overall growth in wages is a reflection of the active part played by HR professionals across both the public and private arenas, says Heidi Waddington, managing director of Hays HR. “Some sectors have seen only steady, inflationary increases, but where this is the case, roles have been broadened and a range of non-contributory benefits have been added to improve the overall attractiveness of the reward package,” she says.
And while some survey respondents communicated more cautious growth plans, Waddington adds, demand for experienced HR candidates continues to outstrip supply – especially in the interim sector, where specialist recruitment consultants are increasingly required to source such candidates.
It’s no surprise that HR professionals in certain sectors, such as financial services, have been hit harder than others by the credit crunch, both in the UK and globally. The Hays survey shows a downturn in the City, with fewer HR roles in the banking and insurance sector, which have traditionally commanded the highest wages. HR professionals in the property industry are also feeling the pinch, as slower house sales and fewer new-build developments combine to cast a gloomy shadow over growth prospects. And in the retail sector, Hays’ researchers found that many companies are reviewing headcount within their headquarters’ operations.
However, this needn’t be bad news for HR high-fliers focused on adding value to their organisations, Waddington insists. “At a time of uncertainty, HR professionals often come to the fore,” she says.
“The focus is on improved retention and enhanced productivity, and this can be achieved through effective training and development initiatives. Where redundancies are unavoidable, the HR community can manage this process with minimum risk, ensuring best practice and the best possible outcome for all parties.”
In some sectors, HR’s profile is higher than ever. According to James Collinge, head of HR at law firm Field Fisher Waterhouse, a vital game of catch-up is under way in the legal field. “The legal field perhaps historically lagged behind other sectors in terms of its HR initiatives, but for many modern, forward-thinking firms, this is now being urgently addressed with full board-level support,” he explains.
“Working within a law firm offers a great deal of challenge for the modern HR professional and, as our marketplace becomes more global, so do the career options as well.”
For those in the early years of their HR careers, the Hays survey finds that there are still plenty of opportunities out there. Figures show a 5% increase on 2007’s in roles at HR officer and adviser levels – positions with salaries between £18,000 and £20,000 – and a distinct shortage of candidates at this level. More than half (56%) of the respondents to the survey say that their biggest recruitment challenge is a lack of experienced applicants, and 40% cite the uncompetitive salaries and benefits that they are able to offer prospective employees. In fact, while 26% say they find it difficult to recruit junior HR and support staff, only 18% say they have the same difficulty when it comes to senior roles.
That comes as no surprise to Carol Bodell, chief executive officer of HR recruitment specialist Human Resources International, a Randstad subsidiary. “In general, it’s safe to say we’ve seen a growth in requirement at HR officer and HR adviser levels – and, to my mind, that’s a reflection on the increasing importance of HR in all organisations as well as the growing trend towards shared services and the need for personnel to staff shared services centres,” she says.
At HR adviser level, Bodell says, there is a particular demand. “An emphasis in recent years on operational HR requirements as organisations have moved to the shared services model has meant that there’s now a real need for advisory staff who can interact on a day-to-day level with line managers and senior executives on HR matters.”
For those with years of experience, however, salaries have remained fairly consistent over the past year, according to Waddington.
There are also fewer vacancies to fill, with risk-averse senior-level candidates reluctant to move jobs in an uncertain market. And specialist skills are particularly in demand, Waddington says, with organisations crying out for HR professionals with experience in TUPE issues, redundancy and restructuring.
“Combine these with an ability to influence at board level, add value to commercial debates and align HR strategy to the broader business strategy, and you will secure the highest-paid HR roles,” she adds. The outlook is particularly bright for HR professionals in ‘hard to fill’ areas such as learning and development (L&D) – especially in the public sector, where government targets to upskill the workforce and funding of NVQs and basic skills training are all aimed to bring government organisations more in line with their private sector counterparts.
In particular, the National Pay & Workforce strategies have identified good and bad organisations in relation to their L&D spend, and other factors such as Comprehensive Performance Assessments and Inspections have linked performance with personal development.
“The L&D manager must now be focused on the impact of training on service delivery,” says Sally McAuley, L&D manager at East Devon District Council. “We have to show that performance has improved and that this impacted on the organisation. I think that this has led to some ‘classroom trainers’ being replaced by more business-conscious, higher level L&D professionals with a greater remit than just stand-up delivery, which has in turn increased salaries.”
McAuley believes that L&D posts are now advertised at salaries more comparable with HR professionals than they were a decade ago, and that managers have become better at protecting their training budgets, too.
“In the past year, I have not seen or felt a squeeze in L&D – in fact, my budgets have increased,” she says.
Overall, respondents to the Hays Human Resources Salary & Benefits Survey are optimistic about the way the HR function is perceived – despite the across-the-board impact of the credit crunch. The majority felt that, on the whole, HR was seen to be of strategic importance, with only a third (34%) saying that it was seen as too bureaucratic.
However, 57% felt that HR must do more to maximise its potential contribution, suggesting that in the current period of economic uncertainty, employers will expect much more from their HR management teams in the year to come.