24-05-2010
NEW SALARY SURVEY FINDINGS

Salary survey indicates impact of gender and racial equality programmes on earning capacity.

Despite South African organisations’ commitment to gender and racial equality, differences among the demographics suggest that many are still unconvinced. This is according to the results of the third annual Careers24 Salary Survey. The study - based on responses from 13 583 online South Africans - explored remuneration trends and employee perceptions towards organisational corporate climate and its influence on retention, performance and engagement. Among key findings, the study revealed that: - On average, men earn 65% more than women; - 41-year-old women are re-entering the job market at the junior management level; - Coloureds have the least earning potential while black professionals are the most upwardly mobile yet have the least experience; - Black Africans perceive a surplus of Indians in an industry sector as a threat to racial equality; - Managers have the most influence on an employee’s performance yet lack the skills to foster their development; and - Government and the media have the least constructive corporate climate. This year’s study identified those issues which positively or negatively impact employees’ working environments and, in turn, their performance and likelihood to go the extra mile or seek alternative employment. While organisations faired above average overall, we found interesting variances among the demographics and sectors, suggesting that staff are, at times, unsatisfied with their working environment despite many organisations’ commitment to counter this. It’s still a man’s world Men earn, on average, 65% more than women. This is regardless of location, level, qualification or age and is most likely due to the fact that women leave their jobs to have children. More and more women are re-entering the job market in their early 40s at junior management. This puts women at a disadvantage to men as while she takes a few years off to raise her children, men continue to gain experience. It also accounts for the fact that men continue to dominate top management positions. To counter this trend, women should arm themselves with short-course certificates before re-entering the job market. With a certificate women can earn 20% more than men who have been in the same positions for double the length of time. Industries where this is evident include legal, property, insurance, administration and NGOs. Indians receive lowest salary increases yet are the biggest threat During the period 2008/09, Indians received the lowest salary increase of 0,33%. This is compared to coloureds (5,65%); Black Africans (8,11%) and whites (8,43%). Interestingly, when asked if they were willing to put in extra effort for their organisation, Indians responded the most favourably. Yet, variances in earning potential aside, when it comes to perceived racial equality, Black Africans are the most threatened by Indians and the more Indians there are in an industry sector, the more concerned they are about commitments to racial equality. Black Africans however are the most upwardly mobile among the demographics, yet have the least experience for their current positions. "The reality is that Indians are perceived as being better off than their black counterparts. For example, you would not see an Indian staying in staying in a township community. This just reinforces the notion that they are doing better. It’s really a question of relative levels of poverty and opportunity,” comments Lovemore Nyatsine, principal for Seedbed consulting. Black professionals can be top earners over 50 While whites are the highest earners from the age of 31 years, with the average salary being R19, 998 compared to Black Africans (R17,296), Indians (R14,099) and coloureds (R13,489), it is black managers over 50 years old that can have the most earning potential, eclipsing all other demographics. Among over 50s, black professionals on average earn R28 000 a month compared to their white peers who earn R25,500. This trend can be attributed to EE policies where over 50 black professionals are experienced and in short supply. Managerial talent at this level is in great demand as most companies seek to fulfill EE requirements with experienced and skilled black professionals. In order to attract and retain black managerial staff however, companies must pay a premium. Invariably black managers are likely to have better leverage when it comes to salary package negotiations because they are now aware of their ‘added value’. Four years signals time to move on If you’ve been in your job for longer than four years, you are in the minority. While black professionals are the most likely to job-hop after 3.47 years, whites and coloureds are more likely to stay around, particularly in top management positions where the average length of employment is seven years (compared to Black Africans 3,15 and Indians 5,46). This is due to the country’s transformation agenda (BBBEE) where black professionals are a sought after commodity. “They have greater opportunities at their disposal, command higher salary packages and move frequently for career and financial advancement,” says Kate Shead, regional director for Siyaka Consulting. Diploma surplus The dismal matric pass rate has raised many questions about the lack of adequate education and life-orientation guidance in South African schools. Yet, despite a dire need for skills in the artisan trades, engineering, healthcare and education sectors, the most common qualification is the Diploma, regardless of demographic. Government’s announcement to invest R1bn in skills development in order to give the 228 687 matriculants who failed an opportunity to pursue alternative avenues – particularly in artisans trades - highlights the urgency to guide young people into occupations that will boost the economy. Yet technical certificate studies are the least prevalent (3,65%) across demographics compared to Diplomas (30,81%) and Bachelors (16,10%). “Career guidance is conducted too late for students to make informed career choices,” says Nyatsine. “The tertiary educational system needs an overhaul to be in sync with changing industry needs as well as to be able to produce entrepreneurial graduates and not just employable graduates”. Government, media the least favourable sectors to work in When it comes to the best and worst industries to work for, Government secured the bottom spot for the second year in a row and was consistently last among the sectors when it came to issues of leadership, management, organisation and performance. Geographically, careers in Government are concentrated in Mpumalanga, Eastern Cape and Limpopo, which were also among the provinces that performed the worst in the 2009 matric results. Young people in these areas are at a disadvantage when it comes to education and, even at school level, are not able to reach their potential. This lack of skills transfer and development must have a knock-on effect later on in life. It is thus not surprising that Government – which according to the survey’s findings is concentrated in these areas – performed so badly. Sectors at the top of their game Overall, industries that provide the best working environment were engineering, insurance, agriculture, mining – something winner of 2009’s Deloitte’s Best Company to Work For, Santam’s Ian Kirk, Chief Executive Officer agrees with. Kirk says, “The insurance industry is very competitive and the skills and knowledge of the staff are a key differentiator. It is thus in the organisation’s best interest to do whatever it can to ensure its staff want to stay within the organisation and it puts time, energy and money into managing its talent.” Interestingly, the media was the second worst performer in terms of its working environment. The changes in traditional media, as influenced by a more on-the-go lifestyle, are having an effect on the performance and engagement of its staff. Change brings with it significant challenges and could account for salary cuts, retrenchments and low staff morale. Managers have the most impact on performance, but are not trained for the job The study found that managers and supervisors had the greatest impact on an employee’s performance potential. Yet most organisations faired below average in training and development across the board right up to senior management. This suggests that those under top management are not being adequately developed for their jobs. Staff development is generally seen as the responsibility of the managers and supervisors – not an organisation’s leaders. Without effective management, organisations are unable to foster an environment that encourages employee’s to reach their full potential and could encourage them to seek alternative employment. ‘Underpaid’ but satisfied if there is opportunity to grow Lack of direction and growth opportunities also have a negative effect on staff perceptions towards their salaries. While remuneration was considered to be below their level of responsibilities, regardless of demographic, staff are more likely to be satisfied with a ‘lower pay’ if they have clear guidelines and goals in place which are tied to their future growth. “In the past people would begin a job and expect slow growth with slow, incremental increases along a stable career. Employees today realise that jobs change, organisations come and go and that they will be presented with many opportunities for meaningful career change across their working lives. As such, development opportunities have real currency value to employees today,” says Stephen Renecle, from Stephen Renecle & Associates, who is a registered industrial psychologist. Transparency impacts staff performance Leaders, on the other hand, have the greatest impact on employee performance by providing an engaging strategic vision and an environment of transparency. Without a clear understanding of what the company wants to achieve, staff are less inclined to perform and this could have a negative effect on the business. Thus, it is in the company’s best interest to keep staff informed with regards to any changes and ensure staff know what the ‘bigger picture’ objective is. Michelle Bisaro is the business manager of Careers24 (www.careers24.com). 08/02/2010 www.hrfuture.net