Rise and Shine

SBHD: The boom years are rooted firmly in the past, but marketers have several reasons to be optimistic about the future – pay increases have started to inflate again and predictions for rises are up on last year. Moreover, the department is growing and women continue to make strides.

Now in its 12th year, Incomes In Marketing, the definitive salary survey of the marketing profession, has extended its scope. The sample has been boosted by 25 per cent and 10,500 questionnaires were mailed out to specifically selected job titles. This year, titles such as direct marketing manager were included for the first time.

In a year when it eventually became clear that the economy was growing strongly, the marketing community could afford to breathe more easily. Although unemployment – at 2.5 million – was the lowest for three years, marketers were right to maintain some caution since most witnessed redundancy programmes within their companies but some evidence of growth within their departments.

Underlying inflation at about two per cent is the lowest for 20 years and although the nation’s average earnings remained static at 3.75 per cent, marketers’ pay increases began to rise again, from 5.9 per cent to 6.4 per cent.

Women continued to be brought more into line with men and some top earners received below-average increases.

The lessons left by the recession appear to have been taken to heart. Predictions for rises in the coming year are up on last year at 4.6 per cent but may again prove to be an under-estimate.

How did marketers benefit this year? Above-average rises went to those below marketing manager level, with the exception of the most junior. Marketing managers and directors received slightly below average, an improvement on last year’s situation. But for managers, being in the top ten per cent of earners was no guarantee of an above-average rise, unlike previous years. This segment was awarded 5.4 per cent, compared with the average manager’s rise of 6.3 per cent. The top dogs at some other levels also fared relatively poorly, suggesting they had been sufficiently rewarded in previous years. On the other hand, the top ten per cent of marketing directors received 7.1 per cent. The best senior product managers and marketing assistants also bettered the average.

The financial rewards of manager and director status for high fliers are considerable. Below marketing manager, the top ten per cent get 35 per cent to 40 per cent more than average, but once elevated to manager status, salary averages £48,029 – 55 per cent more than the average of £30,983. Marketing directors are approaching six-figure status at £92,500, more than three-quarters up on the average of £52,405.

Despite a choice of benefits being predicted as the norm by 2000, there has been no marked advance in the marketing sphere over the past year. But with 37 per cent of marketers able to choose, they should consider themselves privileged compared with the workforce in general. A recent study reveals that only eight per cent of firms operate a flexible benefits policy.

Cars are still the main perk but gradual changes appear to be emerging in company car policy. Five years ago, 86 per cent got a company car – now the figure is down to 77 per cent although an additional three per cent get a car loan and six per cent an allowance, the latter figure having doubled since last year. As department size increases so, presumably, does sophistication in compensation and benefits policy and, along with it, the likelihood of a car loan as opposed to the provision of a car. Free petrol or a petrol allowance is also much less widely available in larger companies.

Changes in taxation relating to company cars, which came into effect last April, appear to have already made an impact on senior executives’ views of the car as an instantly recognisable status symbol. Managing and marketing directors who last year were switching from luxury vehicles costing more than £25,000 to the lower price bracket are now slowly reversing the trend, possibly because the additional tax burden can be offset by pay increases. But this asset’s value has only just returned to its 1992 level, whereas subordinates’ cars have all the time increased in value. This year’s car averages out at £16,638 – 1.78 per cent more than least year.

Incomes are most likely supplemented by a performance-related bonus now given to 51 per cent, virtually on a par with last year. Anyone at group product manager level and above is more likely than not to be a recipient. One in four overall benefits from profit sharing, a slight increase on last year and quite evenly distributed, a change which became apparent in the last survey. Guaranteed bonuses are available to six per cent.

The value of profit sharing shows some improvement, slightly better than performance-related bonuses, and guaranteed bonuses have achieved good gains with 37 per cent this year getting six per cent or more compared with 24 per cent last year. At the most senior levels, these top-ups can be extremely valuable, adding as much as a third or more to basic salary in exceptional cases.

Provisions for retirement show little year-on-year change with a quarter fortunate to be members of non-contributory pension schemes, and 63 per cent in a contributory scheme. As with profit sharing, membership of non-contributory schemes became more evenly spread throughout departments in the last survey.

The repercussions of the insurance premium tax introduced last October have yet to be felt, with just under three-quarters still in a company health scheme, the second most widely available benefit. Cräche facilities are on the increase, although still only available to two per cent and more prevalent in larger companies, but smaller ones are starting to provide.

Car perks apart, marketers obtain a greater range of benefits in larger companies. In departments with more than 75 staff, over half enjoy profit-sharing or a performance-related bonus. In the largest firms, about double the average can join a share-option scheme and are members of a non-contributory pension scheme. Club membership, cräche facilities and discounts are also more widely available.

Holidays continue to improve with a slight increase in entitlement so that now 11 per cent get six weeks and 68 per cent five weeks. Group product managers in particular will find more time to recharge their batteries with at least six weeks’ leave for 13 per cent, up from eight per cent last year.

Changes in benefits have been minor but generally beneficial and at last, pay awards are moving up. Following the five-year low of 5.9 per cent reported last year, the average rise has now increased to 6.4 per cent. Another 1993 trough from which marketers have emerged was the peak in personal pay freezes at 13 per cent, which has now dropped to eight per cent. The higher echelons from marketing managers upwards have found themselves particularly shackled during the recession, but over the past year the numbers on frozen pay have halved.

There are still, however, companies where the effects of the recession continue to be felt and 11 per cent of marketers says that in the past year a pay freeze was instituted in their department. Smaller departments in particular felt the pinch.

Although companies continue to slim down, with redundancies reported in two out of three, the rate has fallen from the high of two years ago of more than seven in ten. Apart from the very largest organisations with marketing departments of more than 100, the shakeout is still on the increase in companies with departments of 31-plus.

But the worst seems to be over for the marketing department, which is now showing signs of growth. This year, 35 per cent report an increase in numbers and 28 per cent a decrease. Mirroring the redundancy situation, growth is prevalent where the department has up to 30 staff. Reductions are most likely in departments with 31 or more staff and reported by as many as half of marketers in departments of 41 to 50.

More detailed analysis reveals that growth is up to an average of 3.9 this year, from 3.5, but decreases have slightly increased from 5 to 5.2, so this year’s picture appears a little rosier. Job sharing, previously most evident in companies with large marketing departments of 76 or more staff, is now reaching down into smaller companies, reported by 12 per cent of marketers in departments of 51 to 75 this year compared with only three per cent last year.

Ad spend, which showed a dramatic rise two years ago, has levelled out and the big spenders with budgets of more than £8m still represent one in five. Interestingly, there has been a drop in the number of such companies with departments of 41 or more and smaller companies with 21 to 40 have risen. Now nearly half have this sum to manipulate. The grocery and drinks sectors, which last year accounted for 55 per cent of such companies, is now down to 48 per cent. This could in part be explained by a move towards category management shifting the emphasis away from consumers and towards retailers, where the real financial muscle lies.

This year’s survey introduced a question on departmental restructuring to take into account this and other recent developments such as brand culling. Nearly a quarter have seen category management implemented in the past year, particularly in the very largest departments (38 per cent), but for a third of those marketers, the process had already begun earlier. With an additional nine per cent reporting the occurrence in the past five years only, then nearly a third have been through the process. This development is distributed across all the major industries, ranging from 18 per cent in the industrial sector to 30 per cent in pharmaceuticals.

Brand reduction in the past year, at seven per cent, is highest in the fmcg and healthcare sectors (13 per cent and 11 per cent respectively). In all but the smallest departments, some restructuring was more likely than not and was most in evidence in the largest departments.

Against a background of changes in operating policy, how have salaries fared in different industries? It used to be common to report the financial sector as the highest payer, but the best that can be managed this year is the group product manager’s salary of £33,363 – eight per cent up on the average of £30,995. This is by far the largest sector surveyed, with marketing departments of 51 upwards, where staff reductions are reported in about four in ten companies.

There is good news for industrial marketers, who find that the gap in their below-average salaries is narrowing. Particular improvements are noticeable at group product manager level and above, where salaries are now about 90 per cent of average, up from 83 per cent last year.

The fmcg sector is looking good, especially at marketing manager and director level (eight to nine per cent above average) so that a marketing director now earns £57,324, compared with the average of £52,405.

With such a mixed bag of indicators, marketers, although positive about their employers’ growth prospects, have not modified their views since last year. But they are more optimisticabout future salary increases, predicting 4.6 per cent in the coming year against 4.3 per cent last year. But maybe such prudence is unjustified since the rise they got last year was 50 per cent more than predicted.

It comes as some surprise that women’s expectations in the coming year are no different to men’s since they have made great strides of late. Last year, their salaries averaged £26,533 and although this is still only 79 per cent of the man’s average of £33,496, it has edged up four percentage points in each of the past two years. Presumably, some of the credit for this is because of Opportunity 2000, the campaign to increase the quality and quantity of women’s participation in the workforce, which is now in its fourth year. The number of women in marketing is increasing proportionately. Five years ago they accounted for less than a quarter of markets; last year this figure was 50 per cent up and this year it stands at 38 per cent.

Their departmental status is improving too and although the proportion of female marketing directors has remained static at 15 per cent, growing numbers account for levels in between, from senior product manager upwards. Higher salaries are now more within their grasp and more than a third earn more than £28,000, a dramatic improvement from 27 per cent reported in last year’s survey.

Pay differentials have also narrowed at marketing manager level and below since two years ago when we reported that with increasing seniority, a woman earned proportionately less than a man. The gap is still greatest at manager level where the average woman’s salary at £28,850 is ten per cent below the male equivalent (17 per cent two years ago) but more junior levels range from 93 per cent to 98 per cent. Pay awards are still much higher than men’s, averaging 7.2 per cent compared with six per cent, and they are more likely to have been achieved through promotion (28 per cent compared with 20 per cent). All the signs, therefore, point to employers’ recognition of the female talent in the marketing department but only time will tell how many break through the glass ceiling.

The indications are that other ceilings are also in place, erected by women’s own value systems. Despite the fact that nearly twice as many women marketers as men are single, they are more likely to feel that relocation difficulties limit their career opportunities and although location is relatively unimportant compared with other job characteristics, it is a quarter more important to them than it is to men. Combine these factors with an overall drop in the number of marketers having the benefit of relocation expenses, down to 31 per cent from 36 per cent, and a one per cent increase in the base rate in 1994, then true parity may take some time to achieve.

In fact, no more women are predicting a job change of any sort in the coming year than did last year. Men, however, despite the possibly greater familial constraints on them, feel that this year they are more likely to change jobs than not, a reverse of last year’s situation.

Europe, though, is no greater a lure for anyone than before, although two out of three would be prepared to relocate there with either their current or a new job. Women, traditionally the better linguists, have lost interest a little since last year but men’s interest has increased.

This year there is much greater interest among managing directors in going to Europe, 50 per cent up on last year, possibly related to the fact that their fluency in any language has increased. A similar scenario is taking place at the most junior level of the department.

The route up the next rung of the ladder is still mostly via the recruitment industry rather than advertised vacancies, be it headhunters (20 per cent) or recruitment consultants (35 per cent). Although there is no overall change in these figures year on year, headhunters may get a warmer reception in future from chief executives. A large decrease in numbers expecting not to move (37 per cent to 22 per cent) has been offset by the numbers expecting a mysterious phone call, now at 36 per cent, more than double last year’s figure.

Recruitment consultancies and companies advertising junior marketing vacancies direct might well be advised to expect an increase in the numbers of marketers knocking on their doors. With below-average rises for even the top ten per cent, assistant product managers could well feel dissatisfied and decide to look further afield now that the economy is on the road to recovery. Even though they were very unlikely to get a car previously, this figure has now dropped from 13 per cent to eight per cent.

Since the last survey, their dissatisfaction has increased compared with product and senior product managers and now seven in ten predict moving this year. At their level, opportunity for advancement is the most important job characteristic, getting the highest rating among marketers. Just under three-quarters rate it as very important and in second place is recognition for work done, rated by two-thirds as very important.

Employers should protect this investment and ensure the marketing directors of the future appreciate that promotion brings with it not only higher financial rewards but also access to more benefits such as free petrol and a health plan. This is more readily within their grasp than ever before although marketing directors are most likely to be over 40 (41 per cent), a growing number – three in ten – are now in the 36 to 40 age bracket, up from 23 per cent last year.

With the boom years behind them but a number of positive indicators in the past year, the future appears to be far brighter for the marketing world. Maintaining a prudence equivalent to the Chancellor of the Exchequer’s should stand them in good stead in a future where change is likely to be the norm.

SBHD: Facts and Figures

Mailing took place in early October and by the cut-off date of November 21, 2,245 questionnaires had been returned, a response rate of 22 per cent. Compass Data Services conducted the research and analysed the questionnaires that were returned.

The sample consists of 1,394 men and 845 women. Breakdown by job title is as follows: two per cent are managing directors, chief executives or chairmen; ten per cent are marketing directors; 37 per cent are at marketing manager level; five per cent are group product managers and eight per cent senior product managers; product managers form 15 per cent of the sample and six per cent are at assistant product manager/marketing assistant level. The remaining 15 per cent of job categories such as advertising managers are not discussed in this article but do appear in the full report.

The major industries covered by the report are as follows: 21 per cent work in food and drink; 11 per cent in consumer durables; 14 per cent in the financial sector; 15 per cent in the industrial sector and eight per cent in hi-tech.

With a questionnaire covering nearly 40 topics, this article can only highlight some of the main findings, but the full report contains detailed analysis and gives in-depth coverage to subjects such as benefits, attitudes towards the job and views on company performance.