Trouble at the top

Organisations in the engineering sector are struggling to hold on to their employees, despite the frequency and value of bonus payments. The 2005

also shows that benefits packages have improved as companies battle to attract staff.

The survey, launched by the Chartered Management Institute and Remuneration Economics, reveals that 61.7 per cent of executives in the engineering sector received a bonus in the year to January 2005. But in spite of the high number of people given bonus payments, 45.4 per cent of companies are reporting retention problems, the worst reported figure for 15 years.

Asked why their employees leave, nearly 62 per cent blamed competition from other organisations and 45.4 per cent admitted they offered little in the way of career progression or training. Salaries (43.2 per cent) and job security (40.9 per cent) were also cited as reasons for job changes.

The findings reveal that the average total earnings for managers in the engineering sector are £39,883, putting the sector fourth in the UK ‘earnings league table’. Managers’ salaries account for a large proportion of ‘guaranteed take home pay’ because at £3,803 for managers in engineering their bonus is worth 9.5 per cent of total income. Directors, in contrast, rely on bonuses for 38.6 per cent of total earnings. This differentiation is important as company and personal performance affect bonuses for 65.7 per cent of directors, compared to 56.2 per cent of managers.