UK manufacturing lose staff - dissatisfaction?

Survey reports that resignation rates are higher in the UK manufacturing sector than the national average, for the year to January 2006, as organisations fail to meet the needs of their staff.
Resignation rates are higher in the manufacturing sector than the national average, for the year to January 2006, as organisations fail to meet the needs of their staff. A survey of 22,480 individuals shows that despite an increase in earnings, the manufacturing executives have become frustrated by company pay structures and a lack of job satisfaction. The 2006 National Management Salary Survey, published by the Chartered Management Institute and Remuneration Economics, reveals a labour turnover rate of 20.6%, compared to 10.7% in the utility sector and 11.8% in the retail sector.

Resignations stand at 13.7% for managers in, compared to the national figure of 4.6% and requests for internal moves are reported at 3 per cent against the national figure of 4.9%, suggesting that executives in the manufacturing sector are looking to leave their current employers altogether rather than pursue an internal move.

This desire to change jobs comes despite employers in the sector offering an average increase in earnings of 9.8% - the highest annual increase since 2002.

The findings reveal that the average total earnings for managers in the manufacturing sector are GBP 41,621, making them almost bottom of this year's 'earnings league table'.

With average earnings for engineering managers at GBP 39,840, they come bottom of the list.

At the top are utility managers who earn an average of GBP 53,740.

Over the last year 79% of organisations have given bonus payments to their staff, compared to 70% in the previous year.

This wide-scale distribution represents a return to the heights of 2002, the last time more than three-quarters of UK employers made bonus payments to all executives.

The average managers' bonus is now worth 10.9% of their salary, compared to 10.4% the previous year.

Directors' bonuses are worth 38.9% of their salary (38.6% in last year's survey).

However, despite the increase in earnings, the UK's employers are finding that financial rewards, alone, are no longer enough.

More than half the organisations (55.1%) reported retention problems in the 2006 survey (up from 45.4%, last year) and 6 in 10 admitted difficulty recruiting.

Asked to explain these retention and recruitment problems, many organisations cited dissatisfaction with the working environment, frustrations with company pay structures and a lack of skills or development opportunities: * Adverse environments - 20% said restructuring or job insecurity caused uncertainty.

15% suggested staff were unhappy with office location or relocation plans and 9% focused on the lack of facilities available at work * Distribution of pay - 39% claimed they lost staff because of the salaries on offer and many organisations also identified dissatisfaction caused by the distribution of bonus payments.

Although the overall incidence of bonus payments in organisations is high (79%, as stated above) this year's survey shows that 62% of managers received a bonus, compared to 69% last year.

The proportion of directors receiving bonuses has, however, increased to 85%, from 77%.

* Truncated training - over one third (37%) admitted they offered little in the way of career development or training, and of these organisations, 29% suggested structured training was not open to all staff (up from 23% last year).

More than half (53%) also said they could not find staff with the required specialist skills.

Jo Causon, director, marketing and corporate affairs at the Chartered Management Institute, said: 'The reported increase in resignations is a matter for concern, especially as organisations continue to identify skills gaps in specialist areas.

Of course, a certain amount of labour turnover can be a good thing, but if the current trend is allowed to continue it could breed dangerous levels of uncertainty and impact on the strategic development of UK organisations.' In an attempt to redress the trend in resignations, the 2006 Survey shows that organisations are offering a range of benefits to staff.

These now include private medical cover (72%), childcare vouchers (67%) and life assurance (63%).

Almost all offer some form of pension provision (99%), but the number offering contributory final salary schemes has dropped from 34 to 28%.

Paul Campfield, director of Remuneration Economics, commented: 'The report, which is now in its thirty-third year, shows that many organisations are creating packages that offer the flexibility to match employees' differing requirements.

With the increase in staff turnover this is an area that will inevitably attract greater attention as employers look to retain the best talent.'