Q2 bms construction sales index

Quarterly ConstructionSales Index

About IndexThe report is compiled from a variety of sources including vacancy data, candidate salaries, client survey information and specific sector reports. As a business we interview over 500 sales candidates per week, speak to 2000 decision makers and have a national presence with 7 offices throughout the UK. This gives us access to a wealth of regional and national data, information on candidate salaries and job expectations and insight into the challenges facing decision makers. The index is produced quarterly and provides organisations with a good barometer of trends in the UK sales recruitment market.

About Us

We specialise in recruiting high calibre people across the UK, Ireland and Australia. Our network of offices gives us strong local presence and allows us to support a long list of blue-chip clients who view us as partners they can trust.

We have grown to become a leading force in our field placing more people than ever before. But we haven’t let our standards slip. We take the time to get to know you, your business and the type of people you need. We tailor our services to ensure the right recruitment solution for your business. In short, we make things run smoothly and produce results.

2| BMS Quarterly Construction Sales Index - Published July 2013

BMS Quarterly Construction Sales Index

With output up across the UK, and the British Chamber of Commerce suggesting business confidence is at its highest point since 2007, at long last businesses have some small reason to be cheerful.

Aside from the fact that we have seen economic false dawns before, an upturn in business confidence and the tentative shoots of recovery actually pose serious questions for personnel departments, and the sales teams they support.

According to the BMS Quarterly Sales Index, employee retention is becoming a very real issue.

It was uncertainty and a lack of confidence, rather than the effectiveness of retention strategies, that kept staff turnover low during the downturn. With candidate confidence now returning to the job market, many sales leaders fear the loss of their star performers - forcing them to work harder to keep their teams together.

“Seventy percent of companies believe they are going to have to work harder to retain their best people in the coming months.”

Chart One: Will you have to work harder to retain staff if the economy improves?

Firms are responding. Across the board, they’re continuing to invest in a range of retention strategies. Today’s developing communications technologies are enabling new forms of flexible working, which according to Chart Two, has led to a third of firms now offering these opportunities to their teams – a growth of nearly 70% on last quarter’s figures.


Retention concerns as economy gears for growth

Yes, 70%

No, 30%

“It was uncertainty and a lack of confidence, rather than

the effectiveness of retention strategies that kept staff turnover

low during the downturn.”

Similarly, and perhaps more significantly, firms are willing to increase base salaries to counter offers for their best people – a jump of over 40% on last quarter’s findings. The BMS Index has consistently raised the issue of salary as a reason for losing (and failing to secure) good salespeople. The fact that the industry has taken action shows a positive development across the vast majority of sectors.

“We’ve seen a rise this quarter in the number of companies

offering higher salaries, improved benefits and flexible

working. A real sign that companies are starting to act.”

Chart Two: What are you doing to retain your best people?

The medical sector is particularly bullish, with over a third of organisations responding to the survey confirming they’ll increase salary to hold on to the best people – compared with an industry average of 23%.

Such increased efforts to keep their teams together is hardly surprising given that eight out of ten respondents felt their salespeople were instrumental in protecting their businesses during the recession. It’s safe to assume that this will only increase should the economy continue its upward path.



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“Sales training and more lucrative bonus schemes

remain the top ways companies are looking to attract and retain sales

talent.”

As Chart Two revealed, while salary and a range of other bonuses are being offered to keep their best people, firms continue to focus their retention efforts on training.

This is a trend the BMS Index has been following for some time and offers benefit to both employer and employee. Apart from the likelihood of improved performance (which will ultimately hit the firm’s top line), expanding training programmes is a clear sign of a company who is willing to invest in its people.

Chart Three: Will sales training be a big factor in motivating and retaining sales teams?

It would certainly appear to work, with the vast majority of survey respondents agreeing that sales training is a major factor in motivating and retaining staff, as shown in Chart Three.

According to BMS’ Head of Training and Development, Dave Bill, investment in employee training goes right to the heart of retention efforts:

“We’ve seen a big move towards training as a retention strategy over the past few quarters. While salary may attract candidates, investing in your existing people increases motivation, performance and a greater sense of value in the employee. Indeed, as we move forward, presentation and lead generation training will not only add to team competencies, but will sit alongside growing salaries, flexible working and increased bonus pots as a sound retention tool.”

Therefore, we will inevitably see the importance of training increase over the next six months as over a third of firms take on raw talent in their attempts to remain competitive. Offering training and development, and immersing graduates and new starters in the company culture from the very beginning, should not only accelerate ‘time to value’, but support retention strategies too.

Training and Loyalty

“Sales training leads the way in retention tactics being used by companies with 86% believing it will help them to motivate and

retain their staff.”


Yes, 86%

No, 14%



Chart Four: Jobs growth January 2011 - July 2013

Of course, enhancing team performance isn’t simply about retaining the best people, it’s also critical to find and recruit new talent. And over the second quarter of 2013, the BMS Quarterly Sales Index has brought to light that jobs growth recovered from a slump in March to end the quarter in positive territory (Chart Four).

Q2 recruitment analysis

Business services, IT and manufacturing have all fared well - in what remains a tough climate. However, sales recruitment within construction and medical remained well below the all-sector average.

Set against the quarter’s positive Purchasing Managers Index (PMI) figures and growing business confidence, the sales recruitment figures appear to be lacklustre. In reality, firms rarely increase sales teams or add additional account management on the back of a single good quarter.

It’s a more strategic game; we’d expect a time lag between output/order growth and an upturn in recruitment.

On the question of the challenge of recruitment over the past six months, firms were more evenly divided; just over half of firms surveyed felt they had struggled to recruit good people (Chart Five).

A struggling six months?

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“Whilst vacancy levels are low, this new sense of optimism will

see recruitment activity rise in the coming months.”

Chart Five: Have you struggled to recruit good sales people over the past six months?

Recruiters in the business services, FMCG and medical sectors were more likely to agree that they had ‘struggled’. The biggest barrier to securing the right people within the medical sector was strong counter offers from existing employers – small wonder as medical leads the sectors in using salary rises to encourage retention.

Despite this, there’s no getting away from the fact that salary and counter offers remain significant recruitment issues across all sectors, as Chart Six demonstrates. There is still work to be done here.


Chart Six: If you have missed out on a good candidate in the past, what was the main reason?

Yes, 56%

No, 44%

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Two stage battle for talent back on This quarter’s Index highlights a period of short term entrenchment for employers. There’s no doubt that as confidence returns to the economy and the job market, good sales people who have sat tight will be looking for what other opportunities may exist.

In an attempt to offset this potential skills drain, employers are ramping up strategies to engender greater loyalty (principally through investment in their people). But where attempts fail, as highlighted in Chart Six, employers are now prepared to aggressively move to counter offers.

For companies that are recruiting, this means increased competition. As Chart Seven indicates, they’re taking action to make themselves more competitive by looking outside their markets for good people. They are doing this by taking on raw talent and offering training and development, which are trends we have seen over the past two years.

“As confidence returns to the economy, those that sat tight during the recession will consider their options,

leading to increased competition for candidates.”

But where this quarter’s Index offers a particularly interesting insight is in the significant increase in the number of recruiters (one in four) now willing to increase salaries, and almost a third aiming to shorten recruitment processes.

We haven’t seen these high levels for some time. This reflects a growing realisation that to get the best people you have to pay the money and be fleet of foot; both to beat competing recruiters and to outmanoeuvre the current employer who may be looking to counter offer.



Chart Seven: What steps will you be taking to remain competitive in the search for good sales people over the next 6 months?

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Look for talentoutside market

Improve salary& benefits

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provide salestraining

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Strengthenrecruitmentpartnerships

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None of theabove

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“The rise in counter offers and a willingness to increase

salaries compared to last quarter are clear signs that

competition is increasing and confidence is improving.”

Chart Eight: Will your recruitment activity for the second half of 2013 increase or decrease compared to the first half of 2013?

Increase in activity forecast for the rest of 2013


As shown in Chart Eight, recruiters expect to be doing more business across all sectors (except construction) as we move into the second half of the year. While the vast majority of firms believe their activities will stay the same, around a quarter of IT and business services firms, and over a third of manufacturers, expect their numbers to rise.

It would seem that once businesses have their retention strategies in place (and have dealt with the inevitable churn that a growing economy delivers), they will look to go out to market to build up their sales forces.

Of course this is largely dependent on the continued growth of the economy. While there have been many false dawns before, there is certainly a place for cautious optimism – and there’s little doubt that both business and candidate confidence is higher than it has been in some time.

But as we’ve discussed, increasing confidence can also be a major concern for the unprepared employer.

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Upturn forces a change of hiring pace in constructionWith June’s Markit/Chartered Institute of Purchasing and Supply (CIPS) UK Construction PMI recording a figure of 51 (where above 50 shows growth), an air of optimism appears to be flowing into the sector.

And with good reason; residential house building is up for the fifth month in a row and commercial and civil engineering projects appear to have stabilised. Adding to this is the 41% of firms questioned for the survey who expect growth to continue over the coming 12 months.

So, with positive signs across the sector, how is sales recruitment faring? The answer, according to the latest data from the BMS Quarterly Sales Index, is better than last quarter.

While sales recruitment figures in construction ending somewhat below the all industry average, and down on the same period in 2012, the numbers appear to be going in the right direction, demonstrated by Chart Nine.

“Residential house building is up for a fifth month and commercial

and civil engineering projects appear to have stabilised

creating an air of optimism.”

Chart Nine: Construction sales vacancy growth rate year-on-year



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Market Average Construction

Despite the general upturn in construction over the quarter, HR and recruitment teams remain cautious. Responding to the BMS survey, only 19% of employers felt sales recruitment activity would increase over the coming six months, with the vast majority projecting activity will remain static.

“Despite the general upturn in construction over the quarter, HR and

recruitment teams remain cautious with only 19% of employers looking to increase sales recruitment activity in

the coming six months.”

Forward looking statements aside, there’s little doubt that construction employers highly value their sales teams. Seventy one percent of respondents felt sales departments had been instrumental in protecting businesses during the recession. With new orders hitting a 13 month high in June, such positive perceptions can only increase.

Chart Ten: Will you have to work harder to retain staff if the economy improves?


But as with all industries surveyed for this quarter’s Index, order growth and a strengthening economy actually concern some in construction recruitment functions. During the downturn staff turnover was low. Sales executives kept their heads down to weather out the storm. HR departments fear growing attrition rates as the economic climate improves and opportunities to move increase.

Chart Ten highlights that 92% of employers expect to have to work harder to retain their best staff as the economy improves. This figure is somewhat higher than the industry average of 70% and requires investment from firms to keep their sales teams from jumping ship.

Cause for concern

Employers taking action

The most common strategy being utilised to reduce sales team churn is an increase in sales training and personal development. We’ve seen this trend before, but it’s interesting that training is being used to retain as well as recruit staff.

But should attempts to keep people fail, or indeed if more salespeople are needed to supplement growing teams, recruiters will need to take action.

“The most common strategy being utilised in the construction

sector to reduce churn is to increase investment in

sales training and personal development.”

Yes, 92

No, 8



Counter offers encourage process improvementConstruction firms haven’t been slow to recognise today’s increasingly competitive labour market. Alongside training and development strategies, they’re looking to streamline recruitment processes to get the best people in quick.

For over two years respondents to the BMS Index have highlighted process concerns. It has been proven time and again that poor (and particularly long) processes put off prospective candidates, opening the door to counter offers.

Indeed, a successful counter offer is the biggest reason for losing the best people at interview within construction. Back in the downturn if you couldn’t afford to offer the highest salaries, you had to rely on speed to get the best people. While this hasn’t changed, the operating environment has – it’s simply more competitive.

Employers are now reporting more of their people will move as a direct result of the upturn. This means that there are more good people on the market and more firms are looking to hire. While the package is certainly important, the battle for talent isn’t always won with money. Therefore, if you’re unable to offer high salaries, a streamlined process that enables fast decision-making and offer acceptance, is now of great importance.

“Construction firms have been quick to recognise the

importance of speed in this new competitive labour market and as a result many are looking to improve their recruitment and decision making processes.”

Q2 bms construction sales index

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