The only way is up

APM’s Salary and Market Trends Survey 2016 offers an insight into the industry’s recruitment and pay. Jason Hesse looks at key salary trends.

Things are looking up. Project managers continue to feel positive about their roles and the organisations in which they work. 

Around two-thirds (61 per cent) of the 4,879 UK project professionals that took part in APM’s annual Salary and Market Trends Survey say that their organisation is experiencing growth, with 41 per cent also looking to recruit additional staff. Project management organisations in the West Midlands are most optimistic: 75 per cent expect growth, and 58 per cent are also looking to hire.

Project professionals enjoy their jobs, on the whole. More than three-quarters (77 per cent) are satisfied in their current role, which explains why so many have worked in their organisation for extended periods. Half of respondents have been with their current employer for more than five years.

“Job satisfaction is hugely important,” says Lee Stebbings, client services director at Rethink Talent Management. “Employees want to believe they’re doing the right thing, and being treated and paid fairly.”

It seems employers have taken this on board. The survey reveals that salaries are moving upward. The mean base salary for project managers – excluding bonuses and other benefits – is now £50,000. Naturally, this number varies depending on levels of experience, qualifications and location: the average project professional in Northern Ireland earns £39,000, compared to an average of £55,753 in London.

Bonus culture

Stebbings attributes increasing salaries to supply and demand: “Demand for project management skills has continued to increase over the past 24 months. There is a skills shortage, particularly for permanent roles, which has led to fierce competition to attract the best candidates. This means companies are taking hiring seriously, treating people correctly and offering them attractive benefits.”

This is reflected in the survey. On average, the value of additional benefits, before tax, is £6,000. The most frequently included perks reported by respondents are a contributory pension (69 per cent), a mobile phone (56 per cent), professional subscriptions and fees (48 per cent), a performance-related bonus (48 per cent) and health insurance (44 per cent).

“While a contributory pension scheme is clearly an important benefit, we’ve found that candidates are more focused on benefits that will make their lives easier, such as their car allowance or an annual bonus,” says Stebbings. 

This view is echoed by Vince Hines, managing director at survey partner Wellingtone Project Management: “Candidates want as much salary as possible, but more organisations are waking up to bonuses. We traditionally associate bonuses with sales jobs, but organisations are increasingly providing a bonus scheme that extends to project management roles. The pension benefit is interesting – and certainly very attractive – but you’ll find that people under 35 just aren’t interested in it. They’d prefer the money upfront.”

Qualify for quality

With such a competitive market for project professionals, it is benefits that can tilt a candidate towards working for a company. “A lot of project professionals are on the move, as there is always the carrot of more money elsewhere,” says Stebbings. “Ultimately, the financial purse strings are the key motivator.”

This could explain why companies are proactively offering higher salaries and benefits to employees. More than half (59 per cent) of survey respondents anticipate that their pay and benefits will increase over the next year. It is worth noting, however, that most respondents are staying put: just 33 per cent said they were likely to move organisations.

One way to boost your earnings is to be a member of a professional body. The survey shows that a full member of APM earns nearly £10,000 more per year than a non-member – not bad for a membership fee of £158. Being a member of APM gives you access to ongoing professional development, but also the recognition that you are part of a serious organisation.

“Very few organisations have a holistic career-development programme. There is hardly anything serious out there, other than generic qualifications,” says Rod Sowden, managing director at Aspire Europe, a project management consultancy and training provider. “This is one of the biggest obstacles to increased performance. Too many organisations are happy doing things as they have always been done, not wanting to challenge their employees with new qualifications and learning methods. In return, most project management teams see training as a route to qualifications, not to improving their performance.”

When asked, ‘What are the skills and competencies lacking in your organisation?’, respondents listed leadership and management (28 per cent), coaching and mentoring (26 per cent) and strategic management (26 per cent) as the top three weakest spots. Increased career development and obtaining formal qualifications can improve these skills dramatically.

Hines says this has never been more important. “Go get the qualifications. Everyone has PRINCE2® – seize the benefits of the APM qualification route to differentiate yourself from the market,” he explains. “It’s amazing how many have been doing a project management role their entire career but do not have the badges to show it. It’s a good way to stand out as a candidate and negotiate a higher salary.”
There is no shame in negotiating; indeed, employers expect this. “Recruitment managers are willing to negotiate and can offer a slightly higher salary if they find the right candidate,” Hines explains. “A lot of companies are happy to flex a little in order to get the person that they really want.”

Contractors

Given that projects are temporary, they lend themselves to bringing in resource on a temporary basis. Consequently, project management has a very mature contract market.

For the 338 contractors that participated in the survey, the top three reasons given for going freelance were career choice (47 per cent), being better-off financially (39 per cent) and work-life balance (35 per cent). An additional 17 per cent started contracting after being made unemployed.

“Many people get to a certain point in their career and decide – because they have the right background and CV – to begin contracting, and many do very well out of it,” says Hines. “Although it does not always suit everyone, people with experience should consider this route.”
The median day rate for contractors is £450, the survey reveals. Here, too, APM members earned more than non-members: a mean day rate of £530 v £477.

Day rates can vary enormously dependent on the project, industry and employer. The day rate is primarily dictated by the hiring company, explains Hines: “There is not a direct and obvious day rate; it is about what the client is prepared to pay. So while a project manager may charge £600 per day at one company, their next contract may only pay £400 per day. It can be a very fluid market.”

A new reality

Pay is going up. Project managers are satisfied in their roles. The market is growing. What next? June 23, when the UK voted to leave the EU, marked a watershed moment. Its effect on the profession and salary trends remains to be seen. The one thing all our commenters agree on is that we need clarity.

“In the second quarter of 2016, we saw growth slowing down in project management,” says Stebbings. While he says that organisations should not expect the same growth that they have enjoyed in the 18 months leading to the EU referendum, growth will return in the second half of 2017: “Companies just want to know what it all means to them and to the economy. Once there is clarity, growth can return.”

Hines is equally realistic. He foresees a dent in confidence in the short term: “This means that there will be a pause in terms of organisations starting larger projects. The sooner we get clarity on what the new relationship will be, the better. Clarity builds confidence.”

Therefore, as a whole, the project management profession continues to operate in a positive market. Demand for project professionals will continue, driven by organisations that are looking to develop their project management maturity.
 

Jason Hesse is the editor of Project.