London is for losers

Forget London. Dick Whittington has gone to Liverpool, and he’s staying put. If you live in northern England, you no longer have to up sticks and head south to get a well paid job in construction. As Building reported last month (24 August, page 12), construction activity has reached a seven-year high and this boom means that demand for quality staff is outstripping supply across the country, forcing up salaries and narrowing the wage gap in the process. In construction, the North-South divide has almost disappeared.

This year’s Hays Construction/Building salary guide (over the page) illustrates this process. Bill Chitty, director of Hays Construction, says: “London and the South-east used to be considerably different to the rest of the UK. But if you go to any major city further west or north – Birmingham, Cardiff, Derby, Sheffield – there are large-scale construction works going on. Which means salary levels are very similar up and down the country.”

For example, senior planners in north-west England have had a £2,500 average salary increase over the past year, whereas in central London the rise is only £500. If you work in Yorkshire, the average hike is even higher at £4,000. It is a similar story for estimators in the North-west, who received better pay rises than their southern counterparts. Assistant estimators in the North can even earn up to £4,000 more than those in the South. Chitty says Liverpool is particularly ripe. “It can almost mirror the City of London in the late eighties with all the cranes on the horizon.”

Bernard Craig, eastern divisional manager of Mott MacDonald’s building and infrastructure unit, remembers the seventies, when it was the norm to follow jobs around the country. “I’d been married two weeks and already we were moving from Newcastle to Inverness, and then down to Cambridge for work,” he says. Now more staff than ever want to work in the area they come from, and they often can. “Very few candidates now would consider moving. Staff in the Midlands and North move south only if they want a lifestyle change,” says Chitty.

Howard Walker, Galliford Try’s group human resources director, says that this year 17% of exit interviewees cited working closer to home as a principal reason for leaving the firm, compared with 7% last year. “People don’t need to commute south any more. There are more jobs regionally because of private or commercial work and government projects, especially in health and schools,” says Walker.

Workers in the North are also using the boom to get a better deal in their current jobs, much as their southern counterparts have been doing for years. Mike Peasland, group managing director of Balfour Beatty, says: “We have people who take it to the wire with a job offer from another contractor and then do not leave but use this to leverage their existing packages.”

The northern boom is putting an even tighter squeeze on employers. Nearly nine in 10 said recruitment this year was difficult, against eight in 10 last year. “There is certainly more workload in the regions,” says Mott MacDonald’s Craig. “Everybody is after everyone else’s staff. ” He credits government projects such as Building Schools for the Future for the higher demand.

Hays’ Chitty says that QSs are the most sought after skillset, especially in the North: “There is a shortage of QSs simply because there are fewer living in the North-west than in the South-east, whereas before there was not enough work to go round.”

What next? The gap will continue to get smaller, according to Chitty. “We can only foresee more activity, more opportunities and higher salaries for the North. We expect the North-South divide to continue to diminish while the market remains buoyant. However, it is unlikely to ever be completely equal due to other factors, such as the cost of living.”

Sounds like even more reason for Whittington and his cat to stay put, then.