Consultancy bears brunt of depressed green jobs market

The recession has taken the wind out of the sails of the UK environmental services sector, but certain areas of the ‘green collar’ jobs market are proving resilient. Liz Trew presents the findings of Environment Analyst’s first career and salary survey for environmental professionals, conducted jointly with leading sustainability recruitment specialist Allen & York.

After more than a decade of virtually uninterrupted growth in demand for environmental specialists in the UK, and with skills shortages and salary hikes resulting from fierce competition for talent, the economic downturn of the last eighteen months has prompted a sea change in the environmental jobs market.

It has been a well-documented tough year for British-based environmental consultancies, particularly those with a heavy reliance on corporate due diligence, contaminated land and services to the property/construction sector. Most of the big name consultancies have shed jobs, with some having used the opportunity to restructure and streamline their businesses in the hope that they will be stronger for it when recession lifts.

Allen & York perspective

Recruitment agency Allen & York’s business manager, Joe Heppenstall, says that the best consultancy firms have been able to soak up the downturn in certain areas by redeploying staff on other projects or locations, “but these are few and far between, so the trend has been a negative one on the whole”.

A quick glance at leading environmental/sustainability trade magazines reveals a dearth in classified job advertisements in recent months, in stark contrast to the situation two years ago when pages were positively brimming with vacancies.

However, the reduction in classified job ads may not simply be a reflection of the softening market. Heppenstall claims there are “still very good jobs out there in good numbers,” but he says candidates are no longer as hard to find so the need to advertise has diminished. That said, he acknowledges that the number of live vacancies on Allen & York’s books has decreased – although “not by as much as most people might imagine” – from 390 this time last year to 230 today.

Allen & York reaped the benefits of a booming market and has invested heavily since its inception as one of the first specialist environmental recruitment firms in 1993. It reached its peak in terms of staff numbers in the early part of 2008, and is still the market leader despite employee numbers since then dropping, in line with its clients’ and the market in general.

“We have not been immune to the downturn, but we have been at pains to structure effectively to continue high quality support for our clients,” explains Heppenstall. “We had to make hard decisions, which is healthy, but maybe this shows that a results-driven business like ours has been as hard hit as our clients’ businesses.”

Allen & York’s current list of openings include a proportion of overseas vacancies, “which continues to increase,” observes Heppenstall. Allen & York has seen many of its key clients looking to spread their wings internationally “rather than hunkering down and shelving developments”. Several of the larger, UK-based environmental consultancies have opened offices in the wider European Union, Middle East and further afield.

Job opportunities

While the UK environmental consultancy industry may be more dispersed and a little thinner on the ground, it is far from being all doom and gloom in the UK, with certain skills still in great demand in spite of the recession. “The clearest opportunities are in energy management and renewable generation,” says Heppenstall.

“The agenda for companies to reduce their cost burden through better utility management has led to the creation of many new roles over the last year of which energy managers have been prevalent,” he adds, lending credence to the theory that the downturn could help realise a switch towards a lower-carbon economy.

On the renewables side, plans for ‘round three’ offshore wind projects have kept developer teams busy and work related to earlier rounds is still buzzing throughout consultancies, according to Heppenstall. Expertise in offshore environmental impact assessment (EIA), ecology and other specialist wind farm-related skills have all been highly desirable over the last six months.

From Allen & York’s perspective, demand for environmental professionals has “remained overwhelmingly more consistent” through the recession in the corporate/industrial environmental management sector than in consultancy. He confirms that “outside of the banks, there have been far fewer redundancies in the corporate green space as a percentage than there have been in consultancy.” Some firms have even strengthened in-house teams during this time.

Heppenstall also points to increasing opportunities in the public sector, despite government plans to reduce spending, as organisations up their measures and controls. This trend appears set to continue with initial implementation of the carbon reduction commitment (CRC) energy efficiency scheme next year.

Survey highlights

The UK’s environmental workforce is distributed between five key sectors: the corporate world, dedicated consultancies, the public sector, NGOs and other environmental industries (such as water, waste management and contracting firms). Environment Analyst’s first salary and careers survey is based on responses from more than 2,500 individuals to an online questionnaire conducted during summer 2009 as well as the records of 22,000 recent candidates on the books at Allen & York. The survey results reveal how individuals and their employers across the five main sectors are coping during recession.

Almost a quarter of respondents to the online survey reported staff redundancies as their organisation’s main response to the downturn. A further 21% said that a pay freeze was the main action taken, while 17% said their employer had stopped recruiting. Other significant actions included the redeployment of staff, pay cuts and reduced bonuses, while just over 4% cited the closure of offices/divisions as the key recessionary response.

In total, some 28% of respondents said the numbers of environmental professional staff in their organisation was decreasing year-on-year (see Figure 1). However, a similar proportion (25%) said their organisations were still expanding environmental teams. Environmental consultancies were more likely to be shedding jobs than other types of organisation, with just over 32% of consultants reporting falling staff numbers compared with 26% of those in the environmental industries, 25% in the public sector, 22% in corporate sector and 19% in NGOs.

Unsurprisingly, 37% of the online survey sample said they felt less secure in their job now than twelve months ago, compared with just 11% who felt more secure. Although more than half felt similarly secure in their role now as a year ago, as many as 46% felt less secure about the security of employment more generally within the environmental sector.

Individuals’ job security is weakest amongst environmental consultants, with 42% of consultant respondents feeling less secure in their roles than a year ago. By comparison, only 28% of those employed by NGOs felt that their job security was more under threat.

The survey results also support the notion that the general level of mobility within the environmental professional workforce has been curtailed by recession, with 56% of participants more cautious about moving jobs now compared with twelve months ago. That said, a still significant proportion (26%) of survey respondents are looking to move to a new employer within the next year.

Remuneration

The mean average salary across the industry as reflected in the responses to the online survey is estimated at £39,500, with 40% earning less than £30k and 22% bringing home more than £50k. Average salaries vary considerably according to organisation type, position and level of experience, age, gender and primary work activity. A summary of some of the headline statistics on salary differentials is shown in the box on 8 page 16 .

The highest average salary – by some degree – is found in the in-house corporate sector at £46,900, which may simply reflect that these positions tend to be filled by more experienced individuals. Meanwhile, the average salary for consultants is £38,900, while NGOs languish at the lower end of the scale at £29,800. Public sector wages average £34,700, suggesting that the public/private sector pay gap is not as wide as many might imagine.

“There is a perception that those in the public sector are paid much less than consultants but that really has not been true for some years now,” argues Heppenstall. “It’s also great to see that the north/south divide in sustainability terms does not really exist salary-wise.” According to an analysis of the current salaries of candidates seeking employment through Allen & York, the average for those working in London was £32,500 compared to around £30k for the northern regions of England, Scotland and Wales.

In terms of primary activity, online survey respondents working in corporate social responsibility (CSR) and sustainability earned the highest premium overall, with an average basic salary of £45,900, whilst those engaged in ecology and conservation work earned the least, at £29,800. However, the Allen & York candidate records suggest climate change jobs are top of the tree in terms of pay scale, with a senior manager or associate/partner in this field achieving an average of £53k.

Pay rises subdued

The economic challenges of the last eighteen months are evident in the pay rise trends reported by our online survey respondents. We asked participants what level of salary increase they had received in the last twelve months. Just under half of the respondents had not received an increase at all this year, with 15% actually receiving a pay cut. Around 9% had their salary slashed by more than 10%.

Alongside this, a significant minority received healthy pay increases, with more than a fifth reporting an increase in excess of 5%, with 13% of those in the 10%+ increase bracket. The mean average pay increase for the sector as a whole was a little more modest – but still respectable – 3.1% for 2008/09. However, this is a marked reduction on the average 5-7% per annum increases that had become the norm for the environmental sector during the few years leading up to recession.

The survey statistics also indicate that those who have not changed employers in the last couple of years were less well off in terms of salary increments. Meanwhile, looking at pay rises awarded by organisation type, results indicate that the highest rises were awarded in the environmental industries, followed by corporate/industrial firms. Consultants generally received a below-average pay increase in the twelve months leading up to the survey.

Bonuses have been similarly subdued, with well over half of survey respondents not receiving any bonus last year. The highest average bonus payouts in 2008 were found in the corporate/industrial sector (at 7.4% of total salary), while the lowest payouts were in the public sector. (Download the Employer’s Edition of the salary survey report EA Survey for access to full pay rise and bonus statistics).

Financial sacrifice

Whilst the survey provides a clear indication that the personal incomes of many environmental professionals are taking a hit this year as a result of recession, it also shows that most individuals are prepared to make further sacrifices in order to save colleagues from redundancy. Nearly two thirds said they would either accept lower pay or work fewer hours, or a combination of the two, in order to prevent more job losses in their organisation (see Figure 2).

Approximately 22% indicated that they would accept lower salaries, although 37% would not find it acceptable to make any personal sacrifice in terms of pay or working hours.

With any luck, further sacrifices will not be needed. Survey respondents were generally optimistic about the prospects for the environmental industry for 2010-15. While 27% felt prospects were good or very good for the remainder of 2009, the proportion rises to 64% for 2010 and beyond. Although around a quarter of respondents were downbeat about prospects for this year, this decreases to just 8% for the longer term.

Outlook

It may take the environmental consultancy sector another year or two to recover to pre-recession salary levels, but there is good reason to be optimistic about the mid-to-long term prospects for consultancy and the wider environmental services industry. Allen & York’s Heppenstall echoes the optimism of our survey respondents: “The investment potential remains strong for the sector and the low-carbon and environmental goods and services offered will only become more diverse, requiring a greater skill set and more support.”

“Undoubtedly, the energy side of the industry, carbon management and renewables will play a large role in the future of the industry,” he adds, as may announcements following the COP15 global climate negotiations in December.

Heppenstall has noticed a recent improvement in mood amongst Allen & York’s key client organisations. “Recently, things have started to change... with more candidate interest being shown,” he says. “Consultancies seem to have had a number of high profile tenders accepted and are operating on a leaner, higher utilisation basis for existing staff, which means many are now looking to recruit – albeit in small numbers – to support newly-won work. This is not the end of the downturn, but it is still good to see that some have turned the corner.”

Environment Analyst and Allen & York would like to thank the environmental professionals who helped us with our survey by giving us an honest, accurate assessment of their current career status and salaries. The 2009 Environmental Professionals Career and Salary Survey is available in a free-to-download “employees’ edition”, while the full report and dataset presented in an “employers’ edition” is available at a discount rate of £48 to Environment Analyst Market Intelligence Service subscribers. The employer’s edition includes full pay rise and bonus statistics. See EA Survey .

• Allen & York and Environment Analyst salary survey