North south divide flipped for construction professionals as research shows saving potential higher in northern regions

Economic uncertainty has seen average salaries in the construction industry fall by 2% on the year, with construction professionals across a range of on-site and office-based roles securing average salaries of £44,115 in 2020, compared to £44,999 in 2019. Prior to 2020 salaries in the industry had been increasing, and still sit 12% higher than 2016.

At the same time regional disparities between salaries and household expenses are creating a cost-of-living gap amongst construction professionals.

According to research into 7,500 permanent placed construction jobs and current vacancies from specialist recruiter Randstad Construction, Property & Engineering, candidates seeking construction roles can have up to 50% of their salary remaining after household and essential expenses by securing a job in the North East of England, where average salaries sit just above the national average at £45,875 (see table 1).

Randstad’s data shows that while London continues to provide workers with the highest average salaries in the industry at an average £50,630, monthly expenses of £2,861 continue to outstrip the rest of the country, meaning workers are left with just 10% of their salary at the end of the month (see table 1).

Construction professionals across a range of roles in the North East are also likely to be in a better financial position than those in the North West and Yorkshire and The Humber, where income left after household expenditure and housing costs is 32% and 25% respectively.

Owen Goodhead, chief operating officer of Randstad, said: “Construction salaries experienced a small decrease in 2020, likely linked to uncertainty around projects due to Covid-19 and Brexit. However, the commitment to keeping the construction industry open, demonstrates the importance of the sector to the local and national economy and as a result the ongoing demand we will see for skilled professionals.

“In addition to analysing 7,500 placed construction jobs, we also spoke to over 2,000 construction professionals currently seeking job roles, and found that salary continues to be the biggest driver to decision making. Over half of candidates are willing to relocate for the right job, rising to 76% if a company contributes to relocation costs, so there is a clear opportunity for hiring managers seeking to attract the best talent in the sector. Salaries should be considered alongside the cost of living, house prices and rental prices though, as these all contribute to the amount of disposable income in workers’ pockets – and these have been rising.

“Lifestyle priorities shifted in 2020 as a result of Covid-19, with many reassessing where they want to live, the home they live in and the importance of a sense of community. January is typically the time of year when people reconsider their jobs. Employers seeking skilled construction professionals should consider the wider lifestyle benefits and possibility of tempting new skilled recruits through additional incentives such as relocation packages.”

Table 1: Average salaries and household expenses in 2020 

Location Average salary in the construction sector Average monthly take-home salary Household expenditure (monthly per person) Private rental prices (monthly) Average mortgage payments (monthly) Affordability index – percentage of earnings remaining after expenses
North East £45,875 £2,902 £936 £549 £504 50%
East Midlands £49,370 £3,101 £1001 £625 £655 45%
West Midlands £42,500 £2,712 £893 £679 £777 40%
North West £36,033 £2,184 £958 £642 £740 32%
East of England £46,929 £2,963 £1062 £627 £658 31%
Yorkshire and The Humber £39,584 £2,145 £1014 £807 £1,014 25%
South East £46,639 £2,946 £1213 £848 £1,109 21%
South West £39,477 £2,340 £1127 £982 £1,248 20%
London £50,631 £3,167 £1135 £1,639 £1,812 10%

 

Site managers, a role that is vital to cost-efficient and timely project delivery saw their average salaries increase on the year by 5.9%, with workers able to secure an average salary of £56,526. Site managers in Yorkshire and The Humber can expect to secure the highest salaries on average at £62,966, with London based roles securing the lowest average salary in 2020 at £54,583 (see table 2).

Site managers in the North East and Yorkshire and The Humber, where significant construction projects are proposed as part of the Government’s levelling up agenda, can have up to 57% of their salary remaining after monthly household expenses (see table 2).

Although average salaries in the South East are pushing £60,000, as pay reacts to a lack of labour, household expenditure in the South East is 29.5% higher than in the North East. When this is combined with monthly mortgage repayments, which are on average 148% higher in the South East, disposable income drops away.

Owen Goodhead, said, Our analysis has shone a light on the earning and saving potential for professionals in the construction sector. Access to labour is driving up salaries in certain parts of the country, and when you consider workers will enjoy a better cost of living outside of the Capital, there is a real risk to retaining and attracting talent in London and the South East.

“2020 was a challenging year, and 2021 will not be without its challenges. The UK has just left the European Union and while a deal has been struck,  companies are having to navigate additional red-tape when accessing supplies and labour from the EU. A combination of Brexit and Covid-19 has also seen some EU-born workers return to home countries. When you consider the pipeline of projects and the skilled labour required to deliver these, it highlights the pressure employers will be under to keep project delivery to time and cost, at a time when demonstrating our competitiveness is vital to the success of UK Plc.”

Table 2: Average site manager salaries and household expenses in 2020

Location Average site manager salaries in 2020 Average monthly take-home salary Household expenditure (monthly per person) Private rental prices (monthly) Average mortgage payments (monthly) Affordability index – percentage of earnings remaining after expenses
North East £55,480 £3,402 £936 £549 £504 57%
Yorkshire and The Humber £62,966 £3,763 £1014 £625 £655 56%
West Midlands £57,075 £3,477 £893 £679 £777 53%
East Midlands £57,062 £3,478 £1001 £642 £740 51%
North West £49,000 £3,080 £958 £627 £658 48%
South West £57,774 £3,512 £1127 £807 £1,014 42%
East of England £55,293 £3,393 £1062 £848 £1,109 40%
South East £59,500 £3,596 £1213 £982 £1,248 35%
London £54,583 £3,358 £1135 £1,639 £1,812 15%

 

Following their analysis, Randstad has made a series of recommendations for construction, engineering and property businesses and professionals. These recommendations aim to help companies navigate 2021, overcome the challenges and capitalise on the opportunities:

Capitalise on changing lifestyle priorities to secure the best talent

A dynamic and mobile workforce who are taking stock of their lives means the chance to recruit new talent who are open to change. People are willing to relocate and are still drawn to jobs for salaries, so consider the added benefit of regional cost of living and spread your recruitment across a wider area to attract the best talent.

Encourage settled status security

EU nationals can continue to apply for settled status even though the UK has formally left the European Union. Businesses should be in regular contact with EU-born employees to ensure that those who have yet to act are provided with the knowledge and necessary skills to apply for settled status ahead of June 2021.

Candidates should understand skilled labour gaps

IR35 and Brexit has put pressure on skilled labour, but project delivery is not slowing down and is key to the economy. Understand the construction landscape and take stock of your qualifications, if it is possible to upskill to increase expertise in a specialism seeking skilled labour investing now will be beneficial long-term.