Inflation exceeds salary increases

Survey finds greater call for
incentive-based packages
JOY ORLEK
SALARY INCREASES continue to lag behind inflation by more than two percentage points and increases in the clearing and forwarding sector are marginally ahead of most other sectors of the economy.
These are some of the key findings of a 2005 salary survey of the clearing and forwarding industry undertaken by P-E Corporate Services and Lee Botti & Associates. According to MD Lee Botti, who initiated the survey 20 years ago, the 22 participants represent medium to larger range companies.
“Salary increases in the clearing and forwarding sector have ranged from 6% - 7% in most regions of South Africa over the past twelve months,” says Martin Westcott, MD of P-E Corporate Services.
“It is a trend that South Africa shares with many developing economies around the world, notably in the East (China, India, Indonesia and South Korea), and in South America (particularly in Brazil, Argentina and Chile).”
The increases have been driven by skills shortages in these economies, coupled with the continuing high demand for technical and professional skills as developing economies adjust to the modern global economy’s dependence on knowledge-intensive industries, says Westcott.
Projections for the year ahead are more conservative, with managers forecasting that increases are likely to dip below the 6% level for the first time in many decades. “This will however depend on the inflation rate remaining within the 3% - 6% target range over this period as well as the impact of factors like the oil price and other imported commodities,” he said.
The survey also reveals growing dependence on incentive or performance-based pay as a key component of modern packages, although this is noticeably lower in the clearing and forwarding industry than in other sectors of the economy. “One exception, however, is the growing use of commission schemes to incentivise sales staff. These have shown a growth of 15% in application over the two years since the last clearing and forwarding survey was undertaken,” he added.
P-E Consulting Services is responsible for collating the data which is produced every two years while Lee Botti & Associates markets the survey.