Resignations increase as firms fail to meet expectations

Resignations have increased in the year to February 2010, despite growing fears over job security.  Data collected from 43,312 individuals in 197 organisations also reveals that earning power has dropped dramatically in the past year, with ‘take home pay’ heavily influenced by where people work and what they do.

The 2010 National Management Salary Survey, published by the Chartered Management Institute (CMI) and XpertHR, reveals a labour turnover rate of 13.6 per cent, up from 12.4 per cent in 2009.  Resignations stand at 4.7 per cent, compared to 4.5 per cent, last year.  In a surprising move, the survey results also imply that employers are failing to persuade staff to stay, with requests for ‘internal transfers’ as an alternative to leaving dropping to 3.6 per cent from a high of 5.8 per cent, last year.

Asked what lies behind this desire to change jobs, more than half the employers questioned (53.8 per cent) admitted that restructuring and job insecurity caused many of their staff to ‘jump ship’.  A significant proportion (38.5 per cent) recognised that their ‘failure to offer career opportunities and training’ contributed to employees leaving.  Given widespread recognition that engaged staff are more loyal, it is alarming that 61.5 per cent also admitted that their employees’ heads had been turned by head-hunters and recruitment consultants.

Now in its 37th year, the survey goes on to reveal an average salary increase of 2.5 per cent across the UK.  Those in the North East and Scotland, with an average 3.2 per cent pay rise, have enjoyed the greatest financial reward during the recession.  However, at the bottom of the ‘league table for salary movements’ are individuals in East Anglia, who have brought home an average pay rise of just 1.2 per cent.  There are also stark differences by seniority level, with junior staff in Northern Ireland enjoying a 4.4 per cent increase, compared to managers in the Midlands securing a 2 per cent rise.

In real terms, the findings show an average salary of £21,876 for junior staff across the UK and £43,119 for their counterparts at team leader level.  Outside London (£26,103) the highest earners at junior level are based in Northern Ireland (£22,570).  Their take home pay represents a £4,682 difference against the lowest paid junior employees, based in the South East (£17,888). 

At the other end of the pay scale senior function heads in the South East are the highest earners (excluding London).  With an average salary of £123,769 their pay packet is 39 per cent higher than the lowest equivalent roles in East Anglia (£75,988).

Ruth Spellman, chief executive of the CMI, comments: “A year ago employers were looking at job transfers as a way of halting growth of the dole queue.  However, with the latest figures showing that staff are prepared to run the risk of unemployment by jumping ship, questions must be asked about employee engagement levels in organisations up and down the country. 

“It is clearly time for business to grow up.  We can no longer afford to reward people with pay rise after pay rise especially as all the evidence suggests that money isn’t the main motivator anymore.  Instead, employers must concentrate on building remuneration packages that incorporate earnings with development opportunities, offer flexible approaches to work and recognition of the need to better engage with staff."

With unemployment figures currently quoted at 2.47 million, an additional unexpected result from this year’s survey is that employers are struggling to recruit staff.  According to the data, 46 per cent of employers have admitted they cannot fill vacancies, with the majority (77 per cent) citing the lack of specialist skills amongst candidates as a key reason.  Almost one quarter (24 per cent) blame the salaries they are able to offer and 15 per cent suggest their location is a factor.

Mark Crail, head of salary surveys and HR benchmarking at XpertHR, says: “It should come as no surprise that pay awards have been much smaller over the past year, than at any time over the last decade. With many companies having frozen salaries in 2009 and inflation on the increase in 2010, employers face mounting pressure to raise pay in the coming months. This is going to present huge challenges for affordability, and with economic recovery still weak and in its early stages, employers need to be able to manage employee expectations about what is realistic.”

Against the backdrop of the research findings CMI has launched two services, www.managers.org.uk/findajob, to help members uncover new career opportunities and www.managers.org.uk/community where members and non-members have access to expert advice and discussion forums.

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Further information:
Faith Riding, Kindred Agency
Tel: 020 7612 8865
Email: faith.riding@kindredagency.com

Mike Petrook, CMI Press Office
Tel: 020 7497 0496; outside office hours: 07931 302 877
Email: mike.petrook@managers.org.uk

NOTES TO EDITORS

• The Chartered Management Institute (CMI) is the only chartered professional body in the UK dedicated to promoting the highest standards of management and leadership excellence.  CMI is the guardian of the National Occupational Standards for Management and Leadership and sets the standards that others follow

• As a membership organisation, CMI has been providing forward-thinking advice and support to individuals and businesses, for more than 50 years, and continues to give managers and leaders, and the organisations they work in, the tools they need to improve their performance and make an impact

• As the only organisation to offer qualifications from Level 2 (GCSE) to Level 8 (PhD), CMI is committed to equipping individuals with the skills and knowledge to be exceptional managers and leaders.  Qualifications and accreditations such as Chartered Manager, combined with products such as CMI’s Continuous Professional Development scheme and the online support resource, ManagementDirect, support the development of management and leadership excellence across the UK

• Through in-depth research and policy surveys of its 86,000 individual and 450 corporate members, CMI maintains its position as the premier authority on key management and leadership issues

• XpertHR is the award-winning employment intelligence service for HR professionals. XpertHR Salary Surveys, powered by CELRE research, provide detailed pay data used by employers in reviewing and setting pay levels. The XpertHR Job Pricing tool was named both product development of the year and outstanding achievement of the year in the Data Publishers Association 2009 awards. Visit www.xperthr.co.uk for more information. The full survey costs £545 for participants and £1,090 for non-participants.