Mind the gap

Finweek English Edition - - BUSINESS TRENDS - LEANI WES­SELS leaniw@fin­media24.com

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.

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