HR salaries in London are now a quarter higher than the rest of the UK, according to a new survey – and there is every indication that the gap between the capital and the rest of the country will continue to widen.
Pay and reward firm Croner’s annual HR salary survey, published this month, gathered data from more than 1,400 HR job roles across the UK to report an average median salary of £47,919 for HR professionals, but with significant regional variations.
HR professionals working in central London earned £77,149 on average, compared to a greater London average of £52,231. Outside the capital, the most lucrative places to work were Scotland, with an average median salary of £49,835, and the south east of England, at £49,356.
At the other end of the spectrum, HR professionals in Northern Ireland earned an average salary of £44,564, while professionals in the south west of England took home only slightly more at £45,043.
The survey highlights that pay for HR professionals in all regions of the UK was well below that of the same type of role in central London and London as a whole. It attributed this primarily to the cost of living, including house prices and transport, being so much higher in London.
“Despite these factors, regional HR professionals’ salaries in the UK are still up to 24 per cent behind those of London – and we only expect this gap to widen,” the report stated.
Across different specialisms, professionals working in health and safety were paid most generously, earning 11 per cent above the average for middle managers in the survey, while those specialising in recruitment received 2.5 per cent below the overall average. HR directors in the voluntary sector earned more than £20,000 less than their private and public sector counterparts on average.
The report additionally revealed that actual bonuses received last year by HR professionals averaged at 8.6 per cent of base pay, with a range across all job levels from 8 per cent to 26 per cent. HR officers received an average of 6.2 per cent with no year-on-year change, while HR directors received an average bonus of 25.8 per cent, up from 22.5 per cent in 2016.
Office for National Statistics (ONS) 2016 figures revealed a steady increase in the median full-time gross weekly earnings among professional occupations, with a 1.3 per cent rise for employees in professional occupations such as HR.
“ONS data finds that workers in London and the south east of England tend to get paid more, which is linked to the higher costs of living and working in these areas, and that many large firms have their head offices in London,” Charles Cotton, senior reward adviser at the CIPD, told People Management.
These HQs tend to employ more senior staff on higher rates of pay, he added. But, within the regions, there are also local hotspots for high pay – such as Cambridge, Edinburgh and Cardiff.
In the latest CIPD reward management survey, which polled more than 700 organisations, 70 per cent reported that market pay rates were the most important factor in determining base pay levels.
An employer’s ability to pay was cited as a key factor by 35 per cent of respondents. However, only half said they collected pay dispersion data – exploring the spread or range of pay across the workforce.
“Our survey finds many employers are being quite transparent when it comes to reward. While we are some way off full disclosure, a significant proportion of employers are already willing to be open about the processes behind their pay decisions, while some are also willing to communicate to staff what have been the outcomes of these processes,” Cotton said.
“In part, this openness probably reflects the legal requirements on big employers to report pay gaps by gender and grade. For many, it also makes business sense… There’s not much point using pay to incentivise certain employee behaviours if you’re not going to be open about the potential outcome – how much you could earn – and the process.”
The Croner figures followed a separate survey of 750 hiring managers and HR professionals from company ranking and recruitment website Glassdoor. Almost half of those surveyed said salary expectations were the ‘top’ reason for employees changing jobs, followed by career advancement opportunities, benefits and location. More than a third expected to see the number of employees quitting to increase during the next 12 months.
“There is almost always going to be a rival firm that could potentially pay your best people more, but Glassdoor research and other third-party studies confirm that company culture matters more than pay as a driver of long-term employee satisfaction and engagement,” Carmel Galvin, chief human resources officer at Glassdoor, said.
“If you can improve your workplace culture and offer people career advancement opportunities, this will help you hold on to people longer.”