Survey of wages in the landscape sector Results of the 2014 HTA wages and staff costs benchmarking survey

Transcription

1 Survey of wages in the landscape sector Results of the 2014 HTA wages and staff costs benchmarking survey April 2015

2 Published by: The Horticultural Trades Association Horticulture House 19 High Street Theale Reading RG7 5AH Tel: Fax: Horticultural Trades Association 2015 All rights reserved Notice and Disclaimer This report is copyright to the Horticultural Trades Association (HTA). The report is prepared for HTA members and customers and may not be (whether in whole or in part) lent, resold, hired out or otherwise disposed of by way of trade in any form whatsoever to third parties outside the member s own business unless it is being used by that third party to undertake work on behalf of the member s or customer s business. To the extent permitted by law, the HTA will not be liable by reason of breach of contract, negligence or otherwise for any loss or consequential loss (including loss of anticipated profits, damage to reputation or goodwill, loss of expected future business, damages, costs or expenses payable to any third party or other indirect losses) occasioned by any person or entity acting or omitting to act or refraining from acting in reliance on this report or the data and/or information used to compile the same. Page 2 of 28

3 Table of Contents 1 Introduction Executive Summary Sample and Method Average Salaries in the Landscape Sector Average Sub-contractor and Agency Day Rates within the Garden Landscape Industry Pay Rises in 2014 and Staff Costs as a Percentage of Turnover Staff turnover, Redundancy and part-time Working Appendix - questionnaire used Figures and Charts Table 1: Average salaries by job description within the retail garden sector... 5 Figure 1: Regional groups used in report analysis... 6 Figure 2: Representativeness of Sample... 7 Table 2: ASHE job descriptions used as comparators to HTA full time job descriptions... 8 Figure 3: Average pay for a range of positions with ASHE comparator where available Table 3: Use of and average day rate paid to sub-contracted and agency staff Table 4: Numbers of sub-contracted and agency staff used Table 5: Average day rate paid for agency agency and sub-contracted staff Figure 4: Level of pay rises awarded in Figure 5: Level of pay rises expected to be awarded in Figure 6: Staff costs as a percentage of turnover Table 6: Types of work (redundancies and part time working) Page 3 of 28

4 1 Introduction saw improving economic conditions continuing from Inflation was at its lowest in five years by the end of 2014 at 1.6%. This was also the first time where wage growth (1.7%) exceeded inflation. 1.2 Retail Price Index (RPI) fell from 2.8% in January 2014 to 1.6% in December. The Office of National Statistics recorded the consumer prices index inflation measure (which assesses the cost of basic household goods) at a 12 year low down to 1% by the end of GFK recorded the climate for major purchases in December 2014 up 18 points from the same time in This signifies that in the year 2014 consumers were gradually feeling more confident in making major investments and purchases such as a garden redesign or landscaping project. 1.4 In support of this GFK reported consumer confidence rising to their highest levels since the economic crisis in The HTA carried out a survey of members of the Association of Professional Landscapers in 2014 and asked how the volume of enquiries changed in different time periods. The survey discovered that there were more enquiries in comparison to the same time in This supports the trend that consumers are becoming increasingly confident in their major spending since The last report noted how in 2013 house purchases became more frequent, in 2014 the number of house purchases were stable but the number of approved loans for house purchases fell slightly every month. Research by Lloyds Bank found that more than 2 million UK home owners choose to improve their home rather than move as a result of rising house prices making it difficult to afford. 1.7 This report aims to give you the information that you need to understand the levels at which the landscape sector pays its employees and some key staff cost metrics and ratios. It can help you advertise vacancies at appropriate rates, plan pay rises, review your cost structure or indeed cost up a new business expansion. 1.8 A total of 271 landscapers across the UK were approached to participate. Of these, 57 gave detailed information about their pay costs and a further 12 were able to provide partial responses to the survey. 1.9 We have also included data from the ONS to provide comparisons with the wider economy. Our survey sample is too small to give a full analysis by business size and location, but where appropriate we have added additional detail which we hope provides a clearer insight into the data and enables you to benchmark yourself against others operating in this sector. We hope that this information will enable you to better inform your business and, as always, to help you make more profitable business decisions. Page 4 of 28

5 2 Executive Summary 2.1 The table below shows the average salary for a range of jobs in garden landscaping as reported by the survey respondents (numbers in brackets are sample sizes). 2.2 Because of the small sample size it is difficult to provide a detailed breakdown by business size or location; however, the report does try to identify where these factors appear to influence salary levels. The indications are that there is a regional progression with pay levels higher in the south than the north. The picture is not as clear when it comes to business turnover; for senior roles, larger companies may pay more but for other roles this is not always the case. Table 1: Average salaries by job description within the landscaping garden sector Job title Mean salary (full time equivalent) Employed director 32,171 (35) Office manager 25,806 (15) Office assistant/administrator 17,732 (12) Supervisor 24,387 (16) Foreman 24,194 (26) Skilled hard landscaper 21,976 (40) Skilled soft landscaper 19,702 (21) Site operator 16,187 (36) Apprentice 11,922 (24) 2.3 As well as permanent staff, the survey asked for details about agency and sub-contractor staff. Over half of those that responded used sub-contractors and one in ten respondents used agency staff. 2.4 Using data supplied on day rates (and multiplying by 260 for the number of working days in a year excluding holidays), the full time equivalent annual salary for agency staff was 28,830 and for sub-contracted staff 32,240. Of course, the nature of this type of worker is that they are employed on an as-required basis, and is an essential part of the flexible workforce required by many operating in this sector. 2.5 Over a third of respondents indicated that they froze pay in 2014 and 28% plan a pay freeze in Respondents made no pay cuts in 2014, but three businesses in the sample propose a pay cut in On average businesses staff costs equated to 35% of their business turnover in 2014.

6 3 Sample and Method 3.1 The information for this report was gathered through a HTA/APL survey which was primarily conducted online; however, printed versions were available to return by freepost or by fax. Two hundred and seventy one were ed invitations from information that they had provided to the HTA membership database. All responses are confidential. 3.2 The survey ran from 13th January 2015 to 24 th February 2015 and 69 responses were received. All respondents who submitted within this time frame were offered a free copy of this report. 3.3 Location of Respondents Respondents were asked to state what region they were primarily based in, which were classified as North, Midlands and South (see map). They were also asked about the number of offices/depots they had in regions other than their primary region. Figure 1: Regional groups used in report analysis The primary locations of respondents were as follows: North and Scotland 12 Midlands and Wales 9 South 46 Unknown Two thirds of respondents were based in the south and two respondents did not state what region they were based in. 3.4 Turnover of Respondents Businesses Respondents turnover was compared against the turnover profile of HTA s Landscaper members in the APL. The chart below shows the extent to which the survey reflects and is representative of APL membership. It shows the percentage of landscaper businesses

7 Percentage of Businesses in the APL who have a given turnover, and compares this with the sample achieved in the survey. The survey under represents businesses with a turnover of less than 100K and slightly over represents businesses with a turnover between 250K- 1m. This is to be expected given that small businesses are unlikely to employ high numbers of staff and as such stand to gain limited benefit from benchmarking wage costs. On the whole, however, the HTA survey is broadly representative of HTA s APL members and as such we would expect the conclusions drawn in this report to be accurate for our members. Figure 2: Representativeness of Sample 45% 40% 39% 35% 30% 25% 20% 15% 10% 5% 0% 23% less than 100k 28% 25% 23% 16% 14% 9% 6% 4% 4% 0% 0% 1% 0% 1% 100k- 250k 250k- 500k 500k- 1m 1m- 2.5m 2.5m- 5m 5m- 15m 15m- 50m unknown Membership turnover size HTA survey sample HTA Landscaper membership 3% 2% 3.5 Comparative Data The HTA s survey data is complemented by the Office of National Statistics (ONS) 2014 Annual Survey of Hours and Earnings (ASHE) survey data which can be found on the ONS website here: This survey gathers together pay data of a wide spectrum of jobs on both a regional and a national level. The specific dataset used to supplement the HTA data was Table 15 - Region by Occupation Finding comparable standard occupation codes that are relevant to the landscape industry is inexact but still provides useful comparative data. The table below lists the standard occupation codes used from the ASHE data which best match the roles in the landscape industry and are used as comparators to job roles together with a brief description of the job title. 1 Note that we have some roles where there is not an appropriate comparator and others where the same comparator is used for more than one role, as the ASHE data does not break down the roles to the same level that was used in the survey. 1 A full description of the codes can be found at http: Page 7 of 28

8 Table 2: ASHE job descriptions used as comparators to HTA full time job descriptions HTA Job title ASHE Job title ASHE Description of ASHE job title Proprietor /owner/ partner Employed director - No relevant code specific to landscape industry - No relevant code specific to landscape industry Office manager Office assistant/ administrator Supervisor Foreman Skilled Hard Landscaper Skilled Soft Landscaper Site Operative 4161: office managers 4159: other administrative occupations 5330: construction and building trades supervisors 5330: construction and building trades supervisors 5113: gardeners and landscape gardeners 9119: fishing and other elementary agriculture occupations n.e.c. Office managers plan, organise and co-ordinate the activities and resources of offices within commercial, industrial and other non-governmental organisations and public agencies. Job holders in this unit group are responsible for recording, filing and disseminating information for a business, organisation or individual not elsewhere classified in MINOR GROUP 415 Although not directly related to landscape gardening, the task description fits well to that of a supervisor on a landscaping project. Tasks required by this job include: directly supervises and coordinates the activities of construction and building workers and/or subcontractors establishes and monitors work schedules to meet productivity requirements liaises with managers and contractors to resolve operational problems determines or recommends staffing and other needs to meet productivity requirements Reports as required to managerial staff on work-related matters. Note: this is the same code as used for Supervisor, with the same caveat that it is predominately related to construction sites. The ASHE codes do not differentiate between hard and soft landscaping and the work description for this code is as follows: levels ground and installs drainage system as required prepares soil and plants and transplants, prunes, weeds and otherwise tends plant life protects plants from pests and diseases cuts and lays turf using hand and machine tools and repairs damaged turf prepares or interprets garden design plans moves soil to alter surface contour of land using mechanical equipment and constructs paths, rockeries, ponds and other features Performs general garden maintenance. The description for this code indicates that it includes people working labourers in the landscaper industry. Apprentice - No relevant code for apprentices in the landscape industry Page 8 of 28

9 Wage setting and benchmarks within the APL membership and beyond In the following two sections of the report we show the average salaries for a range of job roles within the landscape field and also compare these salaries to the Office for National Statistics (ONS) Annual Survey of Hours and Earnings (ASHE) where there are appropriate comparators to the job titles used in the HTA s Wages Survey. Page 9 of 28

10 4 Average Salaries in the Landscape Sector The following table shows the average salaries reported by respondents for a range of job titles. It also provides data to compare these figures with the national figure calculated from survey returns and with the national figure for equivalent jobs as reported by the ASHE survey. 4.2 Note: where there is a pattern in the data that suggests a difference in salary due to business size or region this is described in the commentary. However, as we are analysing data from samples which are quite small, these indicators should be treated with caution. Figure 3: Average pay for a range of positions with ASHE comparator where available Job title APL national APL minimum APL maximum ASHE national Employed director 32,171 (35) ,000 - Office manager 25,806 (15) 9,000 37,440 31,859 Office assistant/administrator 17,732 (12) 9,984 25,000 21,077 Supervisor 24,387 (16) 16,347 30,000 34,785 Foreman 24,194 (26) 17,000 40,000 34,785 Skilled hard landscaper 21,976 (40) 13,000 36,000 19,705 Skilled soft landscaper 19,702 (21) 15,000 32,000 19,705 Site operator 16,187 (36) 9,600 22,000 17,493 Apprentice 11,922 (24) 6,000 18, The range in salaries was similar to the last report. 4.4 One in five businesses that responded employed an Office manager; salaries were within the range of 37,440 and 9,000 with one business paying under this range. In the last report Office manager salaries were recorded at 30,977 (11). The median salary for the Office manager in 2014 was 27, The reported salaries for higher paid staff such as office manager, supervisor, and foreman are less than the ASHE national figures, but salaries for site operator and landscaper are in line with the ASHE average. 4.6 The sample salaries used to calculate the ASHE average may involve people working on major and complex civil engineering and building projects, projects involving night-time working and so forth. 4.7 The ASHE data did not distinguish between hard and soft landscapers and last year s report there was little variance in these salaries; however in 2014 there the skilled hard landscaper average salary and maximum salary was higher than that of a skilled soft landscaper. Page 10 of 28

11 4.8 When looking at the salary for skilled hard landscapers by business turnover, there is no pattern. However when looking at skilled soft landscapers in the same way there the average salary increases in line with the business turnover e.g. average salary within in a business where turnover is 100K - 250K the average salary is 17,458 and within businesses with a turnover of 1m- 2.5m is 27, Annual average salary for an apprentice is slightly higher than the last report this is possibly down to inflation. There is little variance in this salary when looking at business turnover but when looking salary by region Apprentices are paid on average around 2,000 more in the south region than in the north. Page 11 of 28

12 5 Average Sub-contractor and Agency Day Rates within the Garden Landscape Industry 5.1 The nature of the landscape industry means that sub-contractors and agency staff play a key role in the delivery of many landscape projects. The following table shows the proportion of respondents who reported using these resources and the average day-rate that they paid. 2 Table 3: Use of and average day rate paid to sub-contracted and agency staff Businesses that used sub contractors or agency staff in 2014 Proportion using Average day rate Minimum Maximum Sub-contractors 51% Agency staff 9% In total, 58% of respondents indicated that they used agency staff or sub-contracted staff in 2014, 39% said they didn t use either and 3% did not answer the question. 5.3 Within those businesses that did use sub contractors or agency staff in 2014; it was far more common for businesses to use subcontractors than agency staff. Table 4: Numbers of sub-contracted and agency staff used Total number used by respondents (N) Mean (Median) Total number used by respondents (N) Mean (Median) Sub-contractors 136 (34) 4 (13) 162 (35) 4.6 (17) Agency staff 13 (5) 2.6 (2) 32 (5) 5.3 (2.5) Note: N is the number who provided data, however, eight responders who indicated that they used sub-contractors did not give details on how many they used 5.4 Respondents were asked what the average period of work was for their agency and subcontracted staff 3 and were given three options to choose: one day, two to five days or over one week. Of those who indicated that they used this type of resource: 2 Question wording was: What day rate does your business pay for the following roles? 3 Question wording was: If you have used agency/subcontracted workers, how long do you keep your Agency/subcontracted workers for on average? Page 12 of 28

13 6% indicated that on average they used them for a day 20% indicated that on average they used them for two to five days 28% indicated they were used on average for over a week 46% did not give a response, which shows they didn t know or did not want to answer the question. 5.5 Respondents were also asked to indicate the proportion of their contractors and agency workers that were UK, EU (other than UK) or non-eu citizens. All those who said that they employed this type of worker answered this question. 100% (37) of respondents that answered this question fully indicated that they employed agency/contract workers who were UK citizens 22% of businesses said that they employed agency/contract workers that were EU citizens (other than UK citizens) 3% indicated that they used non-eu citizens On average in 2014; 85.6% of agency or subcontracted workers employed by landscaper/designers were UK citizens, 14% EU citizens and 0.4% non-eu citizens 4 The typical type of work undertaken by these workers was asked for both agency and sub-contracted staff. These were open responses and one or two word descriptions were given by respondents, some describing more than one type of role. 5.6 For agency workers, most landscapers employed them as labourers (9 out of the 38 who answered), one specified gardening. 30 respondents did not provide a description for the role. 5.7 For sub-contractors the picture was more complex. Most landscapers stated more than one skill to describe the job description. 5.8 The detail about the role description varied, but a key pattern emerged where respondents either used a general phrase such as specialist or skilled or detailed the specialism such as electrician. The analysis shows that all of those who used a subcontractor were doing so in order to buy in specific skills. 5.9 All subcontractor jobs were described as skilled roles The types of skilled roles specified by respondents are: Bricklayers Landscapers Electricians Tree surgeons Lawn maintenance Machine operators 5.11 The trend continues from last year s report in that landscapers opt for agency staff when additional unskilled labour is required and turn to sub-contractors to buy in skills as and when required. Most of the people employed in this way are UK citizens. 4 NB this refers to the actual number of workers, not to the allocation of working hours/days provided to workers from different countries. Page 13 of 28

14 5.12 Respondents were asked about the cost of agency and sub-contracted staff 5 (see table below). The higher day rate for sub-contractors reflects the findings that agency employees tend to be employed for non-skilled roles For comparison with employee salaries, the final column provides an average full time (FT) equivalent salary assuming an eight-hour working day. Table 5: Average day rate paid for agency agency and sub-contracted staff (N) Mean Median Lowest Highest Average equivalent FT salary Agency Staff (9) ,300 Sub-contracted Staff (43) ,240 Note: N is the number who provided data 5 What day rate does your business pay for the following roles? (i.e. sub-contractor and/or agency) Page 14 of 28

15 percentage of businesses 6 Pay Rises in 2014 and changes in wage levels 6.2 Respondents were asked about levels of pay rises/cuts in their business during 2014 and whether they expected rises or falls in Twelve respondents did not answer this question, so the responses reported are from a base of % of respondents (22) indicated that they froze pay in It is worth noting here that 10 out of the 22 businesses that froze pay in 2014 will continue the pay freeze in 2015 and one plans a pay cut of -6%. 6.4 There were no respondents that cut pay in 2014, but 3 have planned a pay cut for From the 32 businesses that plan to award a pay rise in 2015, three expect to award a pay rise of 10%. 6.5 The average pay change from respondents surveyed was 2.7% and when excluding those that froze pay the average pay rise was 4.4%. This is above the UK average pay growth recorded by the Office of National Statistics in July 2014 which was at 0.6% (including public sector pay freeze); all businesses that awarded a pay rise gave more than this. 6.6 The graph below shows the distribution of various pay rise or freeze options among the garden retail sector during Figure 4: Level of pay rises awarded in % 40% 35% 30% 25% 20% 15% 10% 5% 0% 0% 1% 2% 3% 4% 5% 6% 8% 9% 10% Level of pay rise/fall Base = Proposed 2015 changes in wage levels 6.8 There were 11 respondents who did not answer this question, so responses are based upon a base of 58. A further nine respondents indicated that they were undecided about their pay awards at the time of the survey % of businesses have planned a pay freeze for 2015, the majority of these businesses (62% of them) also froze pay the previous year. Page 15 of 28

16 percentage of businesses The number of businesses with a planned pay freeze for 2015 has fallen since 2014; however we see more business (5%) planning a pay cut in 2015 than there were in From those businesses that plan a pay cut in 2015 the average planned pay cut is -3% Similar to the previous year those introducing a pay freeze are smaller businesses (less than 250K turnover) % of respondents that decided on pay indicated that they would be awarding pay rises during 2015, 16% of businesses were undecided. Focusing on those businesses that plan a pay rise in 2015 the average planned pay growth is 4%, when including those that will not raise pay the average planned pay growth falls to 2.5% The graph below shows the distribution of various proposed pay rise or freeze options among the garden retail sector for Figure 5: Level of pay rises expected to be awarded in % 25% 20% Base =58 15% 10% 5% 0% -6% -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%Undecided Level of planned pay rise Page 16 of 28

17 7 Staff Costs as a Percentage of Turnover Respondents were asked to estimate their staff costs (both direct employees and those employed through agencies or sub-contracted) as a proportion of their total turnover Eleven respondents left this question blank and 8 respondent s ticked don t know. The analysis is therefore based upon the 50 respondents that answered. The responses ranged from 10% to 70%, and no businesses with turnovers of less than 50K responded which should be noted when analysing data. 7.3 The sample size is too small to split by region size. 7.4 Average staff cost as a percentage of turnover was 35% (median 35%). 7.5 Whether or not a business used sub-contracted or agency staff doesn t appear to contribute to the overall wage bill. Those that did use this type of employee had an average cost of 34% (29) and those that did not had an average cost of 37% (20). It is worth noting that as landscaping is a very labour intensive operation, you would expect staff costs as a percentage of turnovers to be higher than many other types of business. Looking at respondents answers to this question based upon their plans to award pay rises in 2015 showed little difference in wage costs. Those that plan to introduce a pay cut or freeze in 2015 have an average ratio of 37%, and when looking at businesses that plan a pay rise; average cost is 34%. 7.6 The chart below shows the spread of responses to this question; what is noticeable is the wide spread of responses, indicating that some businesses need to review their salary costs. 6 Respondents were asked to include pension and NI contributions, bonuses and any agency/subcontracted worker costs. Page 17 of 28

18 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% 32% 34% 36% 38% 40% 42% 44% 46% 48% 50% 52% 54% 56% 58% 60% 62% 64% 66% 68% 70% percentage of businesses Figure 6: Staff costs as a percentage of turnover (median 35%) 18% 16% 14% 12% 10% 8% 6% 4% 2% Base =50 0% Staff costs as a percentage of turnover (%) Page 18 of 28

19 8 Staff turnover, Redundancy and Part-time Working 8.1 Staff turnover Respondents were asked about levels of staff turnover amongst their permanent staff. 7 Five respondents did not know the answer at the time of completing the survey so in total the base for this question is % of respondents had a staff turnover of 0% in 2014, slightly less than the previous year Amongst those businesses where staff turnover was more than 0% (29) the mean turnover rate was 20%. The range of turnover rates varied from 1% to 70% with a median of 16% Interestingly when splitting the business by those who use agency/sub contracted workers and those that don t; the latter had a higher average staff turnover rate of 18% (18) whereas those who did use agency/subcontractors had a lower staff turnover of 8% (31) In terms of business location there was no significant trend when looking at staff turnover across regions. In addition to this there was no specific pattern when looking at the size of the business and its staff turnover. 7 Respondents were asked: What is your staff turnover? (please exclude agency /subcontracted workers from this figure) Page 19 of 28

20 8.2 Redundancy and part-time working Respondents were asked whether they have had to make employees redundant, or put them on to part-time working, reduce or increase the number of agency/sub-contracted workers used. 8 This question was answered by 83% (57) of respondents. Table 6: Types of work employees carry out in 2013 and 2014 Businesses response on types of work their employees do Put people on part-time working 12% 7% Made people redundant 10% 7% Reduced agency/sub-contracted workers employed 16% 11% Increased the number of agency/sub-contracted workers that you employed compared with your original plan for % 18% None of the above 61% 66% Base Note that one of the respondents that ticked none of the above also ticked put employees onto part time working therefore the adjusted percentage is 65%. There were 4 respondents that ticked more than one answer e.g. made people redundant and put people on part time working Taking into consideration the sample sizes, there has not been much change in the proportion of businesses that had to make employees redundant, or put them on to part-time working, reduce or increase the number of agency/sub-contracted workers used since the last report As can be expected those businesses that made employees redundant and reduced the number of agency/subcontracted workers employed were more likely to have frozen pay in There was no pattern amongst those that reported no change in employment levels; they came from the full range of business sizes, across all regions and from those who employed temporary staff and those who did not. 8 Question used: Have you done either of the following in the last year? (Please tick all that apply) Put employees onto part-time working/ Made employees redundant/reduced agency/sub-contracted workers/ increased sub-contracted workers/ neither of the above Page 20 of 28

21 9 Appendix - questionnaire used The questionnaire used to collect the data is provided as an appendix to this document. This is the paper version, and the online version was the same in all its particulars. Page 21 of 28

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28 Providing comprehensive market research for the gardening industry The Horticultural Trades Association Horticulture House, 19 High Street, Theale, Reading RG7 5AH Tel: Fax: Page 28 of 28