2012 Salary and Market Insight Report

Michael Page Engineering & Manufacturing 2

The past 12 months have proved challenging for UK engineering and manufacturing; we have seen output edge up one month only to see it decline the next, margins continue to be squeezed by increases in raw material prices and fi erce price cutting by retailers. Commenting on the current situation, Ian McCafferty, CBI chief economic adviser, made the cautious statement:

“Conditions in the UK manufacturing sector remain diffi cult, with demand both at home and abroad subdued. The weaker export performance no doubt refl ects ongoing instability in the euro area, our biggest export market, and its knock-on impact on prospects for the real economy.”This salary and market insight report gives an overview of salary fi gures in the sector during the past year, while our questionnaire results help us look forward and anticipate some of the hiring trends over the next 12 months. While economic uncertainty still exists, there are some notable positive indicators for the year ahead.

Demand for skills

Despite market conditions, the demand for engineering and manufacturing professionals remains high. In particular, the areas of continuous improvement, process engineering and senior production personnel have all been in high demand in order to facilitate the production of goods and to drive productivity.

Demand for quality engineers and managers has remained stable, particularly across automotive and industrial manufacturing. These two sectors alone have accounted for 55% of all quality jobs fi lled by Michael Page Engineering & Manufacturing in the past 12 months.

There has also been high demand for mechanical and electrical engineers with project experience, as fi rms begin to consolidate manufacturing operations and increase capital investment as improved manufacturing processes are sought.

The demand for top talent remains as competitive as ever. We have seen a big increase in the instance of companies attempting to retain their top talent, with ‘buy backs’ being a particular feature over the last 12 months. Average salary increases of 5-10% when moving jobs have, on occasion, not been enough to convince candidates to move companies when their current employer has come back with a better offer.

Market update

Michael Page Engineering & Manufacturing 3

1. How do you expect your employee numbers to change over the next 12 months?

Highlighting increased confi dence in the sector, over half of respondents foresee a boost in hiring over the coming year. Many see employee levels remaining consistent, while only 16.8% anticipate a decrease in headcount. In line with this we have also witnessed an increase in hiring confi dence in our clients, particularly in the renewables, health & safety and food & drink sectors.

2. Do you expect to pay bonuses or salary increases in the next 12 months?

Again, indicating a positive outlook against economic uncertainty, an overwhelming majority of respondents anticipate salary and bonus increases throughout 2012.

Survey results

Remain the sameIncrease Decrease

54.4%28.9%

16.7%

Don’t KnowYes No

77.2%

15.8%

7%

Overview

Our clients completed a questionnaire to help give us an insight into the projected employment trends for 2012 and the majority predicted an increase in headcount within the next 12 months. There’s good news on the salary front too, with a huge 77% of respondents claiming that salaries and bonuses will rise over the coming year. In diffi cult economic times, it’s heartening to see such confi dence from some of the sector’s leading companies.

In addition, 87.6% of employers in the sector claim that aligned values outrank pure technical ability when making hiring decisions. This comes as no surprise to us here at Michael Page, as we continue to take every measure to ensure we fully understand the ethos and needs of our clients to fi nd a successful candidate match.

Michael Page Engineering & Manufacturing 4

3. Would you rather hire the most technically capable candidate or the candidate who is best aligned to the team’s values?

As a leading recruiter, we’ve always believed in the importance of aligning client’s and candidate’s values, in order to create successful partnerships. As confi rmed by the statistics, a huge majority of our respondents agree with us. Of course there will always be a minimum technical ability required in order to qualify for interview, but many respondents would consider offering additional training to a candidate who best refl ects the team’s values. In this scenario the salary offered would usually refl ect the additional investment in training required, in order to get the candidate’s technical capability to the desired level.

4. How do you go about attracting the top talent to your business?

Over half of the respondents said that they use their relationship with a recruitment agency to attract top talent. A large percentage also claimed that advertising was a useful tool in securing the best candidates. As we’ve seen with many clients over the years, a bespoke advertising campaign through relevant, niche channels can often be the best way to attract the top applicants.

5. What’s the most important retention strategy for your business?

Perhaps surprisingly, salary growth is not the frontrunner in retaining talent. As the statistics suggest, promotion opportunities and a robust benefi ts package are currently considered the most effective incentives in employee retention. It is likely that over the last 12 months promotions have been the driving factor in salary increases. Companies are generally only offering larger scale pay increases in order to retain skill sets.

Survey results

The most technically capable candidate

The candidate who is most aligned with your teams values

88%

12%

30%

Salary increases Promotion opportunities

Benefi ts packagesFlexible working

Transparent communication strategy

32%23%

9%

15% 21%

Advertising

Relationship with agency

Employer branding

Other

52%10%

8%

Michael Page Engineering & Manufacturing 5

FMCG salaries include food, pharmaceutical, health care, chemical, recycling, renewable energy, plastic, print and packaging sectors.

Salaries are exclusive of bonus and incentive schemes. Small to medium companies are defi ned as having a turnover of less than £50 million. Large companies are defi ned as having a turnover of more than £50 million.

* Salaries at this level can vary widely depending on the individual’s background and experience and the scope of the role. Please contact us for specifi c advice regarding salaries at the executive level.

Area North West North East Yorkshire Midlands South East South West

Size of company small/med

large small/med

large small/med

large small/med

large small/med

large small/med

large

Salary £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Engineering

Process Engineering Manager 30-40 35-50 30-45 35-50 30-45 35-50 30-45 35-55 40-50 45-55 30-45 40-50

Health & Safety Manager 30-45 40-85 30-45 40-65 30-45 40-70 30-45 40-70 35-45 45-85 30-45 40-65

Quality/Technical Manager 30-45 40-100 30-40 35-70 30-45 35-70 30-40 35-70 35-45 45-100 30-40 35-70

Project Manager 35-45 40-70 30-45 40-60 30-40 40-60 35-45 40-70 35-50 45-85 30-45 40-70

Engineering Manager 35-45 45-100 35-45 45-75 35-45 45-75 35-45 45-100 40-55 50-100 35-45 45-75

Lean/Six Sigma Specialist 35-50 45-95 35-50 45-90 35-50 45-85 35-50 45-100 35-55 50-120 35-50 40-80

Operations

Operations/Manufacturing Director* 50-80 65-120 50-70 65-100 50-80 65-100 50-80 65-110 55-80 65-150 50-80 65-110

Operations Manager 40-50 50-70 40-50 40-60 40-50 50-70 40-50 50-70 45-60 55-85 40-50 50-65

Plant Manager 45-60 55-75 45-60 50-75 35-60 55-90 45-60 55-100 45-60 55-110 45-60 55-90

Production Manager 30-45 35-55 30-45 40-55 30-45 35-50 30-45 35-50 30-45 50-65 30-45 35-50

Shift Supervisor 25-35 30-45 25-35 30-45 25-35 30-45 25-35 30-45 30-38 32-45 25-35 30-45

Salaries: FMCG

Michael Page Engineering & Manufacturing 6

Manufacturing and industrial salaries include automotive, aerospace, electronics, hi-tech and general manufacturing sectors.

Salaries are exclusive of bonus and incentive schemes. Small to medium companies are defi ned as having a turnover of less than £50 million. Large companies are defi ned as having a turnover of more than £50 million.

* Salaries at this level can vary widely depending on the individual’s background and experience and the scope of the role. Please contact us for specifi c advice regarding salaries at the executive level.

Area North West North East Yorkshire Midlands South East South West

Size of company small/med

large small/med

large small/med

large small/med

large small/med

large small/med

large

Salary £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Engineering

Process EngineeringManager 30-40 35-55 30-45 35-55 30-45 35-55 30-45 35-55 40-50 45-60 30-45 40-55

Quality Manager 30-45 45-85 30-40 40-60 30-45 40-70 25-40 40-95 30-45 40-95 25-40 35-85

Project Manager 30-40 35-65 30-40 35-65 35-45 35-70 30-40 35-90 30-45 40-90 30-40 35-65

Engineering Manager 35-45 45-100 35-45 40-75 35-45 40-75 35-45 45-100 40-50 50-100 35-45 45-70

Lean/Six Sigma Specialist 35-50 40-100 35-50 40-85 35-50 40-85 35-50 40-85 35-55 40-100 35-50 40-80

Operations

Operations/Manufacturing Director* 50-80 65-120 50-80 60-100 50-80 65-120 50-80 65-130 55-80 65-150 50-80 65-120

Operations Manager 40-50 50-70 40-50 50-70 40-50 50-70 40-50 50-70 40-60 50-75 40-50 50-70

Plant Manager 45-70 55-100 45-60 45-65 45-65 55-90 45-70 55-100 50-65 55-95 50-70 55-100

Production Manager 30-45 35-55 30-45 35-50 30-45 30-50 30-45 30-50 35-50 50-65 30-45 30-50

Shift Supervisor 25-35 30-55 25-35 25-40 25-35 25-40 25-35 25-40 30-38 32-45 25-35 25-40

Health & Safety

Health & Safety Manager

30-45 40-60 30-40 40-60 30-45 40-60 25-45 40-75 30-45 35-75 25-35 30-60

Salaries:Manufacturing/Industrial

Michael Page Engineering & Manufacturing 7

As with all areas of the UK economy, the past year has seen continued economic uncertainty and has proved a diffi cult year for growth in the engineering and manufacturing sector. Despite this, demand for engineering and manufacturing professionals remains high particularly within roles designed to improve productivity including continuous improvement, process engineering and senior level production personnel. Certain sectors have also proved more resilient than others, with food and drink remaining the star performer and also considerable demand for ‘quality’ specialists within the automotive and the industrial manufacturing sectors.

In the face of fi erce competition for a restrained level of consumer demand, it is clear that companies are looking to scrutinise production processes in order to gain the competitive edge on their peers. The retention of top talent has also been of high importance for companies, with Michael Page witnessing numerous, often substantial, ‘buy backs’ throughout 2011. If counter-offers prove to be a continuing trend in 2012, a good relationship with an experienced recruiter could prove invaluable in securing successful placements.

Disclaimer: The salaries used in this report were compiled using Michael Page Engineering & Manufacturing data from new registrations and placements made nationwide from January to December 2011. We have attempted to provide information on interim rates, though due to the nature of the roles being on a project by project basis, they are provided as a guide only. Salary data excludes the infl uence of bonuses and remuneration packages; if you would like more information on this, please contact us.

This report has been compiled using the most common market terminology for roles, however we appreciate they may not fi t with every business terminology and structure. The results are provided as generic market information only.

Access this report online:www.michaelpage.co.uk/engineering-manufacturing/salarysurvey

ROUND-UP

Specialists in Engineering & Manufacturing Recruitmentwww.michaelpage.co.uk

For further information on the Engineering & Manufacturing recruitment market or the services that we can offer contact:

Colin Monk Managing Director01932 264195

colinmonk@michaelpage.com