Mind the gap
THE GAP in salaries in the financial services sector between management and the peasant sitting in the basement is getting bigger, new research shows. The global financial recession is largely to blame for the widening of the disparity. According to Network Recruitment, in a survey of 1 136 employees in the financial sector, not only is there a significant gap between top and bottom but directors also often receive bonuses and performance incentives.
Network Finance GM Tine Erasmus says the recession left many expensive middle managers without jobs, with their duties absorbed by employees above or below them. That’s one of the reasons for the disparity between high and low earners. The research shows 59% of employees receive between R300 000 and R500 000/year. Of directors, specifically, just under half receive between R500 000 and R1m/year. Importantly, the research shows that of the directors who earn more than R1m/year, 87% also earn a non-guaranteed portion. That usually includes performance bonuses and share options.
“But the question is perhaps not really ‘ why are these executives being paid so much?’ but rather ‘do they deserve the remuneration?’ Consider that the really big earners are often the rainmakers of society,” says Erasmus. “They don’t just bring with them management skills but also vision – vision to expand businesses, create more jobs and lure overseas investors. Those are valuable traits and must be rewarded, for without proper remuneration such skills will be lost to other countries.”
The research also shows the younger workforce is most likely to emigrate. SA is at risk of losing younger employees over the next few years, with 28% of the 18-to 24-year-old age group considering leaving the country for opportunities overseas.