Payroll costs on the rise, ACE benchmarking reveals

Average payroll cost of employing an engineer with two to five years experience now tops £40,000 according to ACE's Benchmarking Report. Graham Pontin tells us more.

Whilst salary growth continues to struggle to pass inflation, pressure is mounting as employees that have undergone years of real reductions in income are starting to demand real pay increases. With the number of fee earning staff leaving voluntarily at a five year high, pressure will only continue to increase, especially in areas where skill shortages exist. 

The 2014 benchmarking survey shows that some of these pressures are emerging. There was a significant increase in headcount (+7.6%) during the year with the biggest increases amongst engineers (2-5 years’ experience) and Juniors and Graduates, with the average costs for Engineers (2-5 years’ experience) and Senior Technicians increasing by 4%-5%.

The average payroll cost per fee earner for large UK companies was 0.8% higher than the previous year at £51,500. On a constant sample basis, however, costs per head were 2.8% higher in 2013/14.

For SMEs the average costs per head for were practically unchanged; cost per fee earner was 0.8% lower than the previous year whilst cost per support employee rose by just 0.9%.

The average fee earner in the large European firms cost €62,800, which was 8% lower than the previous year. Part of this reduction was due to changes in the sample of firms taking part but amongst those taking part in both years, the majority reported lower costs per head in 2013.

The table shows the median costs per head in £s for various levels of seniority within UK and EU companies.

The ACE Benchmarking Report can be read here

The ACE Benchmarking report is prepared by The Centre for Interfirm Comparison (CIFC) in collaboration with ACE

If you wish to take part in the Benchmarking initiative please contact Graham Pontin