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Beer

01 January 2000
Beer

A new survey shows that pay and reward packages for licensee professionals have significantly outstripped their public image, putting many leading managers ahead of more traditional professions such as engineers, chemists and teachers - even airline pilots and doctors in some cases.

Salaries in excess of £35,500 per year are common for many individual licensees while some couples in top pubs enjoy earnings of £70,000 and above. And this is without including some significant additional advantages, according to new research by the British Institute of Innkeeping (BII)and published in New Innkeeper in May.

"The licensed retail revolution continues at breakneck pace," says Maureen Heffernan, head of careers promotion at the BII. "At a relatively young age licensed professionals are managing complex, multi-million pound businesses with responsibility for the development of up to 60 staff. They need a high skills level, and their remuneration reflects this."

In today's market there are almost as many different styles of pub operation as there are individual personalities. Running a licensed retail business has never been more challenging. It calls for well-rounded business and personal skills similar to any worthwhile managerial position in banks, big offices and other traditional white-collar occupations, including marketing, advertising and public relations.

The modern licensed retail sector needs a skilled workforce with a wide range of abilities to enable them to achieve high levels of customer satisfaction. Licensed retail managers need to be innovative self-starters, have good business initiative with knowledge of licensing law, food safety issues, catering, marketing, staff training and motivation. They need to be good with people and they must appreciate that training is a lifelong experience.

"Pub managers are in one of the best occupations for accumulating money," says John Austen, director of Austens, one of the biggest firms of accountants specialising in licensed retailing. "The best managers can be earning in excess of £25,000 or £30,000 and they can save the majority of their net income to get on and do their own thing in future years.

"The opportunity to live on the premises as part of the job is a tremendous advantage. Licensees with or without families living in adjacent houses or upstairs flats can be receiving an additional benefit worth at least £350 a month net income. If you include other basic living costs and the lack of any commuting costs then we're looking at the equivalent of an extra £5,000 per year, or £100 per week."

Chris Reeve is human resources director for the JD Wetherspoon group, which employs more than 6,000 staff in its 220 pubs. "Historically, in the pub industry managers' salaries were low and were compensated for by free accommodation and other perks," he says. "This is no longer true in many cases, especially following the move to large town-centre pubs which are effectively lock-up outlets where many licensees live out.

"More than half our managers live off-site in accommodation provided for them by the company. This is worth at least £7,000 to £8,000 a year (£140 to £160 per week) to them and up to £10,000 in London and other large cities. Our single managers can be earning more than £40,000; the figure for a couple would be nearer £70,000.

"Today's managers running pubs turning over seven-figure sums are very well-paid by any standards - even before benefits are considered."

In addition to housing benefits, many managed houses have a pool car for cash and carry use, which may be available for managers' use.

The job blends elements of a trade with that of a profession, according to Tim Martin, executive chairman of JD Wetherspoon (personally worth £110m in The Sunday Times' 1998 list of richest people). "It's a trade in that you need a lot of detailed, practical knowledge to run a pub properly," says Martin. "But it's also a profession in that you need knowledge such as law, accounting and personnel expertise. The bigger the pub, the more the element of professional knowledge comes into it."

Extensive research carried out by the BII (see Table 2, right) shows managers' average earnings to be £18,312 (£352 per week gross) after four-and-a-half years' experience in the industry. The maximum quoted was £35,561.

Pub managers' salaries stand up well for themselves, but when the accommodation and other company benefits such as pensions, healthcare, bonuses and valuable share options are combined with opportunities to achieve high levels of responsibility quickly, often at a young age, the attraction is clear.

More than 70% of companies responding to the survey recruited managers aged 19 to 24 years. Opportunities for bar staff and other junior employees for fast promotion is demonstrated by the figures - 83% of respondents promote managers from within the company.

There are usually no specific entry requirements for management posts. Many companies operate a fast-track system for suitable applicants with leisure and hospitality qualifications, or degrees in any discipline. The perception that management couples are preferred no longer holds, as the type of outlet now usually dictates the management style required.

In their turn, successful managers will generally have the chance to move into other areas of the business and progress through the company. Opportunities for self-development through recognised training programmes are available throughout the industry with most companies offering internal courses in addition to external seminars.

Table 3 (left) shows BII research relating to area managers, a route many pub managers have taken with great success - 84% of responding companies recruit area managers aged 25 to 34 years. The survey shows an area manager's average salary to be £28,740.

This article appeared in the May issue of New Innkeeper, the official journal of the British Institute of Innkeeping

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