Thursday, 03 September 2015

Why we should all be worried by rising nuclear salaries

Emma-Jayne Gooch of NuExec Consulting examines the impact of rising salaries in the nuclear industry

There is no denying that the UK is facing a triple-dip recession.

The economy remains 3.5% below its peak in 2007 and is not expected to recover for at least another 2 years. In the last 2.5 – 3 years manufacturing has contracted by 0.4% and the construction by 9%. Wages have also declined over the past five years when taking inflation into account and they are due to fall again in 2013. Recent national figures showed salaries rising by 1.4% with an inflation rate of 2.7%.

Having just completed my 2013 nuclear salary survey I was keen to see how the wages in our sector have changed over the past year and whether we have seen a rise or fall in the industry.

Many supply chain companies have commented on “hard times” this year and that they haven’t got the amount of work and contracts that they had expected. Some companies have even been forced to make some redundancies.

So with all this bad news you would definitely assume that the nuclear salaries haven’t risen right? But with us now being faced with the skills shortage that we have all been speaking about for years – you remember the statistics:

25% more graduates needed to service predicted nuclear growth
By 2025 almost half of the Cumbrian nuclear workforce would have retired
3,000 new jobs within Britain’s Energy Coast over the next 15 years (As per Blueprint)
A predicted 10,000 nuclear energy jobs as predicted back at the beginning of 2010

Add to that the DSA and ISA frameworks and that suddenly makes it apparent that we have some highly sought after skills and with highly sought after skills comes the need to pay more money.

I have taken 6 highly sought after skills in the North and analysed 2011 – 2012 Salaries against 2012 – 2013:

Senior Planner

  • 2011-2012 £39,987 to £55,000
  • 2012-2013 £56,957 to £80,000
  • Average increase: £16,970 (42%) to £25,000 (45%)

Principal Engineer

  • 2011-2012: £50,000 to £65,000
  • 2012-2013: £42,268 to £79,000
  • Average increase: -£7,732 (-15%) to £14,000 (21%)

Senior Engineer

  • 2011-2012 £45,000 to £55,000
  • 2012-2013 £30,000 to £67,875
  • Average increase -£15,000 (-33%) to £12,875 (23%)

Project Manager

  • 2011-2012: £38,700 to £65,000
  • 2012-2013: £35,000 to £71,500
  • Average increase: -£3,700 (-1%) to £6500 (10%)

Senior Project Manager

  • 2011-2012: £55,000 to £65,000
  • 2012-2013: £52,000 to £103,000
  • Average increase: -£3000 (-5%) to £38,000 (58%)

Project Controls Manager

  • 2011-2012: £38,700 to £60,500
  • 2012-2013: £38,700 to £65,000
  • Average increase: £0 (0%) to £4500 (7%)

So these are really surprising findings really demonstrating what is happening in the industry around key skills. Interestingly 4 positions have seen a decline in the starting salary which is probably reflective of companies using different criteria in indicating what a principal and senior engineer is

In addition many of the smaller companies are being forced by market conditions to bringing in Project Manager’s and Senior Project Manager’s with less experience (and therefore for less money) and train them up. Interestingly the top banding has increased in every role with the highest being Senior Project Management that has seen a 58% rise and Planning which has seen between 42 – 45% increase.

This is almost an obscene wage increase over just 1 year and it is no wonder that smaller companies are struggling to recruit these skills or are losing their current staff to the larger organisations who appear to be able to afford these costs.

But how do we stop these salaries spiraling out of control? Should these people receive these salaries as they have worked hard to gain the skills and experience to make them sought after? And can SME’s really compete, and if so, how can they attract and retain their people?

These are all interesting questions and all need to be considered. Of course, it is worth remembering that whilst there has been large increases in salary it is all relative to the work being undertaken. A Senior Project Manager wouldn’t, for instance, have left work on a Friday earning £65,000 and come in on the Monday to a new salary of £103,000.

It is more about many years’ experience and expertise gained as well as knowing your worth and making yourself the pawn in the chess game to realise these salaries.

I wanted to know how this affects businesses in the local supply chain so I asked a few people to give me their views and I want to share two of the comments I received:

"As an SME we have found ourselves increasingly challenged by our much larger competitor and client organisations in terms of the salaries we can afford to pay to recruit, and more importantly retain, some of our key and specialist positions. The imperative in our sector has to be to have the right skills in the right places to deliver the highest quality outcomes, and I'm not convinced that the spiralling salaries are helping in terms of sustaining corporate and industry knowledge. However frustrating this is, I think we must remember not to lose sight of the fact that salary is only one of the factors that contribute to employee satisfaction and the issue has certainly helped us to demonstrate to our staff their worth, and the value we place on them, in many other ways"

Gill Marsden, Business Development and Project Delivery Director, NIS Limited

Gill highlights a key point there and from a survey I completed last year again within the nuclear industry only 29% look for a new role based on salary where as 95% leave due to feeling undervalued. So maybe that is the lesson businesses need to learn. If a company can make their staff feel valued and give them opportunity and career progression maybe it will instil more loyalty? However these days people don’t need to be looking for work to be approached. You may well be happy in your role and feel extremely valued but if you receive an email or a phone call offering you a role that will pay you £10k more, how many of us wouldn’t consider it?

“Growing pains – Tales from deep within the Supply Chain
I can tell now by the look on their faces and their awkward gait when they walk into my office and ask “have you got a minute?” Another resignation and almost always the same story, staff that I have dedicated a lot of time to, given opportunities and training working alongside really good experienced staff. Then BAM! They’re leaving with the experience that I’ve invested in them and for more money than they are actually currently worth, what’s more, my hands are tied as I can’t go chucking cash at them without upsetting the applecart with their colleagues. It feels like I’m the one that’s investing in feeding the shortfall in skills.
As a small/medium sized business I rely of working collaboratively with other ‘partners’ in the supply chain, mostly other small medium sized businesses. We do not poach from each other, we work with, and trust each other as reputation is hard gained and quickly lost, with client and collaborator. It appears that the larger businesses and clients are not burdened by such scruples and freely contact my staff with unsolicited approaches. We complain; they ignore us and carry on regardless; after all it’s not illegal.
I am now considering a ‘West Cumbrian’ weighting (like the London weighting) as our business cannot function in the current market, prices will have to rise.”

This company asked not to be named but I felt they made some interesting points.

It is worth pointing out however it isn’t just SME’s that are suffering, larger companies are too. I haven’t any quotes from larger companies as there is too much rig moral of press offices and procedure to follow but having spoken to them they feel the same pain.

They are loosing people to other companies and even other industries that are able to pay even higher salaries. They are finding it increasingly difficult to recruit good people at the salaries being demanded and in a large organisation with pay scales that need to be adhered to, it is even more difficult as, by recruiting someone on a higher salary than others doing the same role, it can cause even more problems for these companies.

So in conclusion I don’t have the answers. Salaries are without doubt spiralling, the pool of people with these skills are diminishing and companies are finding it more and more difficult to recruit and retain their staff. The obvious answer is investing in skills and training which more and more companies are doing.

Other than that look after your staff, make them feel valued and give them opportunities to grow within your business. And if you have one of these skills I have discussed just remember the grass isn’t always greener.

If you would like a full copy of the 2013 Nuclear Salary Survey please contact me:


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