Figures released today show that redundancies among the UK’s executive population have hit their highest peak since 2001, with data also revealing concerns for the HR sector. 

However, reflecting the confused nature of the current economic climate, data from a survey of 40,027 individuals also reveals increases in earning power.
 
The 2008 National Management Salary Survey, published by the Chartered Management Institute and CELRE, uncovers a redundancy rate of 3% across the UK’s senior management teams. The figure has more than doubled over the past 12 months (from 1.4%) and is at its highest for 7 years, when senior redundancies reached 3.7% in 2001. In the HR sector, the redundancy rate is 1.7%, up from 1.1%, last year.
 
Now in its 35th year, the survey shows that redundancies are highest among executives in East Anglia (12.1%) and those least affected are based in Ireland (0.8%).  In terms of industry, manufacturing is the most widely affected sector, with a reported redundancy rate of 7%.
 
Yet despite this evidence of economic uncertainty, the 2008 survey shows an average movement in earnings of 6.6% in the HR sector up from 5.6% in 2007. Analysis of the data suggests that junior executives are the biggest beneficiaries in the sector, receiving an average increase in basic pay of 6.2%, compared to 5.1% for managers. At 7.9% the largest pay rise was awarded to junior staff in East Anglia. The smallest (2.6%) was given to directors in Scotland.
 
In real terms, the findings reveal an average basic salary of £21,643 for junior executives across the HR sector. Top of the ‘basic pay league table’ are those in the pharmaceutical sector. At £27,168 their salary represents a 33.2% difference against the lowest paid junior executives, in the transport & logistics sector (£18,419).
 
Surprisingly, given the economic climate and increased earning power, this year’s data also suggests that the UK’s executives are willing to risk their job security. Resignations currently rest at 6.5%, representing the second highest figure over the past decade. Across the HR sector, the figure is 7.3% (up from 5.3% in 2007). Employers in Scotland face the largest retention problem, with a resignation rate of 8.5%. Employees in the South East are the most loyal, with just 4.2% handing in their notice.
 
Asked why their employees leave, three-quarters (75%) blame competition from other organisations or headhunting. Almost half (48%) also recognise that they are failing to provide adequate career opportunities or development programmes. One in 10 admit that employees leave because of frustrations with the working environment (9%). Similar proportions cite ‘bureaucratic leadership styles’ (8%).
 
Jo Causon, director of marketing and corporate affairs at the Chartered Management Institute, says: “Increased levels of pay are clearly not enough to retain employee loyalty despite the uncertain economic climate. Given the skills crisis, it is worrying to see so many executives voting with their feet and this must surely send a message to employers that, to retain the best talent, they need to address working environments and long-term career aspirations.”
 
Further analysis also shows that retention is not the only problem confronting organisations. 80% of respondents continue to face difficulties filling vacant roles. Reasons given include a lack of candidates with specialist skills (70%), the salaries on offer (57%).
 
Respondents also suggest that and the nature of benefits packages available (12%) are a factor affecting recruitment and retention. For example, the findings uncover a decline in the proportion of organisations willing to pay ‘golden hellos’ to new recruits (23%, down from 33%, last year). The number willing to make ‘referral payments’ to staff recommending potential new recruits has also fallen (from 82% in 2007 to 73%, this year).
 
Mark Crail, managing editor at CELRE, says: “This year’s study reflects the uncertain economic climate as it shows employers reacting to tougher times, but trying to find ways to retain key personnel too. Remuneration packages have clearly changed, but they must continue to evolve to meet the needs of the economy and workforce.”