Guiding consumers since 2009

Executive salaries climb to counter 'brain drain'

By Staff Writer


From Reuters
October 9 2007
By Gershwin Wanneburg

South African executives' basic salaries rose by more than seven percent in the past year as companies tried to hold onto skilled labour, in particular a small pool of black professionals, a new study said.

The increases were just above the current rate of inflation but higher than companies had expected they would need to pay to prevent a high turnover, consultancy firm Deloitte said.

Average staff turnover among companies surveyed between August 2006 and July this year eased to 10.5 percent, from 13.5 percent. But resignations among local CEOs reached record levels, in line with a global trend, the annual survey found.

The staff crisis in the financial and manufacturing sectors -- two of the economy's biggest -- poses a challenge for the government as it tries to upgrade skills and counter a brain drain that has seen white professionals leave for overseas.

"Although participants had predicted average increases of between 6 and 7 percent in guaranteed package, the increases that were actually awarded were higher than anticipated," said Louise Marx, manager for Human Capital at Deloitte.

"Once again, market forces dictated that adjustments and premiums were required to attract and retain top talent. Predictions for 2007/2008 are that executive guaranteed package increases will range between 7.0 and 8.0 percent," she said in a statement.

South Africa's annual CPIX inflation -- which breached the central bank's 3-6 percent target range for the first time in April this year -- slowed to 6.3 percent in August from 6.5 percent in July.

South Africa's economy is experiencing one of its longest growth periods ever, and the government wants to sustain that in order to reduce widespread unemployment and poverty.

COMPETITION FOR BLACK SKILLS

The government is spending billions of dollars on electricity and transport networks in order to create jobs and upgrade infrastructure needed to stimulate the economy. But the expertise to realise those goals is in short supply.

Experienced white professionals have left in droves to escape high levels of crime and affirmative action policies that have made it more difficult for them to find jobs. Analysts also say post-apartheid South Africa is struggling to produce an educated class among the black majority.

That poses a dilemma for authorities who are pushing companies to appoint more blacks to senior positions through affirmative action policies.

Deloitte said more than half of about 400 firms polled said they found it difficult to retain black executives. More than a third complained about poaching by companies vying for blacks, who regularly changed jobs in search of better pay.

As a result, salaries may continue to rise at a rapid rate.

South Africa's central bank has warned about the inflationary impact of hefty raises. Deloitte said a massive strike by civil servants earlier this year created pressure for wage hikes in other sectors.

Recent Articles

Featured Raise a deposit for your house in 5 steps

If you’re a first-time home buyer, you could be lucky enough to be  approved for a 100% bond, but if you aren’t, a 10% deposit might be required. This  could be a daunting prospect.  However, a few financial tweaks to your lifestyle and spending habits could get you a foot in the property door and, once you’ve purchased a property, significantly reduce your long-term bond repayments.

Get personal with your finances – and tie the knot

As time passes, your financial products may not live up to your needs. Therefore, it’s important to take stock of what you’re paying for and adjust where necessary. We got in touch with financial advisers to find out how you can get your finances in order, and what you should do to ensure you’re financially stable.

Personal loan or business loan? The best way to finance your business

When starting your own business, you may have to rely on external funding. Perhaps you qualify for a personal loan, but would it be better to take out a business loan instead? We got in touch with a specialist to find out whether it’s best to take out a business loan or a personal loan to assist you with your ongoing business or start-up.

What to do when you’ve been denied a home loan

After months of scanning property sites and attending showhouse after showhouse, you’ve finally found what you’ve been looking for. But your dream of owning a home comes crumbling down when you receive the news that you’ve been denied a home loan. So, what now?

Deals

Cash Rewards up to 20% when you swipe your Absa Card at Spar

Price: Available on request
When: Daily
Where: Nationwide

The Royal Elephant Hotel Valentine's Day Special

Price: Available on request
When: 14 February 2020
Where: Centurion

Premier Hotels Vegan Dinner Special

Price: R225 per person
When: Monthly
Where: Nationwide