Construction firms pay out record bonuses to retain staff

Construction firms are paying out record bonuses as they fight to retain skilled staff, Office for National Statistics (ONS) data shows.

Official figures reveal that construction workers were paid an average of £89 per week in “non-seasonally adjusted bonuses” for March 2022, compared with just £49 for the same month a year earlier – representing an 82% year-on-year increase.

Average weekly bonuses paid out to construction workers stagnated after reaching a peak of £57 per week in March 2018, falling to £49 in March 2020, just before the pandemic.

But the latest figures reflect how construction companies are now being forced to provide additional incentives to retain staff amid crippling labour shortages.

The same study reveals that an average of 49,000 jobs in the sector were unfilled between February and April – a joint record for the industry.

Construction was one of only a handful of industries, along with financial services, that benefitted from healthy bonus payments in March.

Total pay increased by 8 per cent year-on-year, with pay packets bouncing back after plummeting by 11 per cent at the start of the COVID-19 pandemic in April 2020, when construction projects and the economy were paralysed.

Recruitment issues within the industry remain apparent as it witnessed the smallest increase in payroll employees between April 2021 and April 2022, rising by only 3,000 people. In contrast, accommodation and food-service activities gained 333,000 new employees.

Responding to the ONS figures, Learning and Work Institute chief executive Stephen Evans said: “Across the UK, firms are struggling to find the workers they need – the result of our labour force being one million smaller than if pre-pandemic trends had continued.

“That includes lower net migration, as well as more younger people staying in education and older people stopping looking for work.

“This labour shortage is likely part of the driver for higher wage and bonus growth in construction – firms need to attract and retain the best workers.

“The government and construction sector need to work together to increase the talent pipeline, including by expanding training routes and thinking about how work is structured to attract workers back into the labour market.”

Resolution Foundation senior economist Hannah Slaughter said: “The UK labour market continues to tighten, with the number of unemployed people having fallen below the number of job vacancies for the first time ever.

“People are taking advantage of these conditions to move jobs, and employers are responding by paying bonuses to hire or retain key staff.”

ONS data on bonuses is an average figure per worker, with total bonuses across the industry being added together and then divided by the number of workers. The ONS said it did not collect data for individual job titles.

The increase in weekly bonuses given to construction workers comes despite a considerable number of firms collapsing in recent months. A total of 22 construction-related businesses went into administration in April, following the 31 companies that went under in February and 24 in March.

Earlier this month, a third of Morgan Sindall’s shareholders voted against the salary packages for the company’s top executives at its annual general meeting.

Construction News reported in October 2021 that the basic salaries of executives at listed construction firms had grown over the past year, but their overall rewards had plummeted.

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