Spinnaker Reveals Radical Pay Changes

Maritime recruitment specialist, Spinnaker Consulting, has warned that radical pay structure changes for UK shipbrokers are resulting in brokers wanting to move out of competitive broking. As part of an in-depth salary survey covering 320 UK brokers, Spinnaker found that base salary pay structures are increasingly giving way to flexible bonus-based structures for competitive shipbrokers. As salary based pay still predominates among principals' brokers, Spinnaker has experienced a growing number of brokers keen to move out of competitive broking and into the employment of principals. "Our survey shows that as broking companies work hard to improve margins and reduce overheads, high basic salaries are being offered less and less. Instead what we see is more broking companies placing increased emphasis on the bonus structure," says Phil Parry, managing director of Spinnaker Consulting. Broking companies can keep their costs and risks low by shifting compensation to bonus rather than base salary. A graduate filling a trainee shipbroker position for a principal can expect to earn a base salary of up to £25,000. The same graduate working for a competitive broker would earn a base salary of less than £20,000 but with a potential bonus of 20 percent. Many brokers are just not willing to accept the lack of security associated with low basic salaries. "There is certainly no shortage of jobs for shipbrokers prepared to accept bonus structure compensation," says Parry. "But most brokers are looking for a higher basic salary." In today's competitive environment brokers who manage to secure themselves a high basic salary are under even more pressure to perform. Brokers increasingly have to justify their existence and, as the commercial risk is shifting from the employer to the employee, there will be an increase in the use of lower basic salaries with higher bonus potential. "To retain key brokers, companies need to optimise their mix of solid performers and high producers and design their compensation system to provide effective incentives for each," says Parry. "In this changing environment, brokers need to take systematic responsibility for their career development. If they are profitable for their company, they can track their careers to ensure their opportunities match their performance." Spinnaker and Doll Shipping Consultancy co-operated on the salary study in order to provide Spinnaker clients with a guide to structuring current year and future compensation plans. The full survey is available from Spinnaker. Parry notes, "Although some brokers received unusually high bonuses in 2001, 2002 bonuses are likely to be much lower."