What's in your package?

Credit: Jonathan Williams

When Donald Mahon was thinking about a weekend break in France, he picked up the phone and called his lifestyle management service to find the best deal. As well as flights, restaurants and theatre tickets, this senior commercial manager at EC Harris has access to a one-stop shop for breakdown, domestic emergency cover and legal advice. "I could find ways to use it seven days a week," he says.

The service is not an expensive personal luxury, but one of the options in the flexible benefits package offered by the consultant to its staff as an alternative to cash. Last year, Donaldson also chose to buy health screening. "I had a three-hour check-up, which was extremely thorough," he says. "It's great to know I have a clean bill of health."

Such innovative benefits have become increasingly common in the past year, as employers focus on perks rather than salary rises to entice graduates and keep the staff they've got.

Credit: Jonathan Williams

In fact, according to Hays Construction & Property's annual survey of consultants salaries, in some areas pay has stagnated, with below-inflation rises across the board. Newly qualified engineers and building surveyors in their late 20s had the lowest increases, at just 1%; architectural technologists, interior designers and landscape architects received similarly paltry rises.

There was only one double-figure increase: partners or directors in the field of building surveying received 11.5%, which took their average pay to £51,192. The next highest were all in architecture: newly qualified architects with CAD experience got 7.7%, architects with six years' experience got 6.7% and partners and directors got 6.3%. The highest rise among QSs was for graduates, who received 4.9% and the newly qualified were awarded 4.8%; at the other end of the scale, associates got a mere 1.5%.

These last figures reflect the dearth of high quality graduates. Quantity surveying is the worst affected area: Hays has more than 2500 permanent jobs for QSs on its books for the London area alone. But with firms unable or unwilling to offer large cash incentives, 2005 became the year of the benefits package.

Credit: Jonathan Williams

"Employers are placing a greater focus on the overall employment package, including offering benefits such as greater holidays, flexitime and company car schemes," says Robert Smith, managing director of Hays Property & Construction. "Achieving a suitable work-life balance has now become feasible for many employees."

Such schemes are particularly popular with bosses because they can offer staff attractive benefits without breaking the bank. "None of the consultancies is operating in the sort of cash-rich environment where it would be possible to give out large bonuses," says Sarah Thompkins, corporate human resources manager at engineer Parsons Brinckerhoff. "Benefits schemes such as ours pool the buying power of the company to reward the employee without costing the company more."

Human resources managers have found that younger consultants in particular can be drawn by perks other than take-home pay. "People in their 20s and 30s have a different outlook on life," says Smith. "They aren't seeing companies as a career for life, they see themselves moving and changing jobs. They are looking for different things from the previous generation: they want greater flexibility in what they do and they are looking for companies that can respond to that."

Credit: Jonathan Williams

According to Matthew Higgs, UK property and surveying manager at Hays, consultancies commonly offer benefits packages that allow them to choose from as many as 20 options.

"Twenty years ago, the choices were restricted to a pension, a company car and a health scheme, but now employees can buy extra holiday, gym membership, a computer at home or discounts at big stores," he says. "It is designed to appeal to younger people."

Smith says that the tax implications for such schemes are often nominal, though employees can ensure that they pay less for company cars, for instance by choosing a low emission model.

The right to trade salary for holiday is becoming increasingly common across the consultancy sector and uptake is led by the newest entrants into the working world, according to Andrew Morrison, acting benefits manager at Faber Maunsell.

"Young people want to buy more holiday because of their lifestyle," Morrison says. "Many put that ahead of money."

Credit: Jonathan Williams

Staff at Faber Maunsell can buy or sell up to three days of holiday a year, from a base allowance of 23 days. The cost of each day is proportional to the employee's salary: it is calculated by dividing the number of working days in the year by the salary.

Tony Parncutt, a 32-year-old regional director at Faber Maunsell, has also taken up a travel insurance policy from the company's flexible benefits scheme.

"It's a really comprehensive policy that covers everything from scuba diving to skiing," he says. "It costs the company about £60, but it is included in my personal tax coding as a benefit in kind, so I only pay for the tax on that benefit. People are happy to sacrifice some of their salary given that it's such a cost-effective scheme."

EC Harris relaunched its benefits package last July and found that take-up rocketed from 36% in 2004 to 86% in 2005. The company already offered a scheme whereby staff could trade salary for benefits chosen from a list of eight, including travel insurance, childcare vouchers, dental insurance and the option to buy or sell holiday. The new scheme, MySHARE, doubled the options available and provided perks designed to improve employees' quality of life, such as retail vouchers, loans for bicycles and the lifestyle management service that Donaldson is finding so useful.

Credit: Jonathan Williams

"Our employees all have different requirements from the benefits that we provide and we aim to provide something to suit everybody," says Joanne Wotton, benefits manager at EC Harris.

"This year, we are adding benefits such as charitable giving, whereby our employees can give to their choice of charities in the most tax and National Insurance-efficient way, and we are also introducing a discount wine club."

Of course, with staff in such short supply, other firms can't afford to hang back if their rivals soup up their benefits packages. There is pressure to be as innovative as possible to stay ahead of the competition, which means that consultants could soon be enjoying an unprecedented work-life balance. As Sue Neumeister, Cyril Sweett's human resources manager, points out: "You have to continue to be competitive and aware of market pressures - otherwise you can't recruit."