Salaries spike as skills shortage bites

SKILL SHORTAGES have played havoc with salary increases in the clearing and forwarding sector over the past two years with basic salary increases averaging just over 17%. That’s the finding of a recent remueration survey in the clearing and forwarding industry just released by P-E Corporate Services and Lee Botti Associates (LBA). “Increases in total employment costs which include fringe benefits and incentive pay averaged slightly more than 19% over the same period. Year on year increases in basic salary averaged 8.4%, almost one percentage point higher than all sector rates,” ” LBA MD Lee Botti told FTW. “The two year analysis shows that cumulative increases over the two year period within this sector have been more than two percentage points higher than the 15% average increase across all sectors over the same period,” said principal remuneration consultant for PE Corporate Services Adele Slotar. “Increases are well ahead of inflation which has averaged 12% over the same period.” According to Slotar a differential of between two and three percentage points between salary increases and inflation is not uncommon in South Africa and is largely attributable to ongoing severe and chronic shortages of key technical and professional skills. “While particularly acute in South Africa it is a phenomenon which is also found in other developing economies – notably countries such as Chile and Argentina in South America, the Pacific Rim and parts of former Eastern Europe.” Survey results confirm that the high levels of skills shortages in the c&f sector are most acute in Gauteng with salary increases in this region leading those in other regions. This is also evident from regional differentials in pay scales across the 40 plus specialist industry positions covered by the survey. Market rates of remuneration in both Kwa- Zulu Natal and the Western Cape lag behind Gauteng rates by approximately 12% with the Eastern Cape trailing Gauteng by 17%. As another indicator of pay pressure in this sector, well over 90% of the leading organisations surveyed now include incentives in the pay mix at executive level, over 80% do so at middle management level and over 75% at lower salaried staff levels. These percentages also rank above market averages. Lee Botti & Associates founded the survey in 1983 in response to clients’ needs. “Since 2003 we have been producing it in conjunction with PE Corporate Services who are specialists in the field of remuneration,” said Botti.