PwC survey shows firms across the region plan to raise salaries in the
next year to match rivals. Companies also considering new hires. TEA
Graphic
Nation Media Group
By CHRISTINE MUNGAI The EastAfrican
In Summary
- The pay will be increasingly aligned to risks taken, an indication of the intense competition in a regional market that is increasingly demanding innovative thinking and fresh solutions from managers.
- And as firms increase salaries to match their rivals, they are also keen to boost their headcount — signalling a wave of new jobs across sectors in the region.
- The region’s occasionally unstable business environment is a challenge for top executives, forcing employees to demand pay for performance.
- HR executives said different market fundamentals — like profitability of firms and availability of skills — in the region will mean countries will increase salaries at varying rates, further deepening the wage discrepancies that exist within the EAC
Top managers in Kenya and Uganda are likely to
see their salaries adjusted upwards at a faster rate in the coming year
than their peers in the region, as companies in these countries battle
for talent, a new survey shows.
The pay will be increasingly aligned to risks taken, an indication of the intense competition in a regional market that is increasingly demanding innovative thinking and fresh solutions from managers, according to the survey by financial advisory firm PricewaterhouseCoopers (PwC).
“At the upper levels of management, we find that competition for talent is very much an employee’s market and they have a lot of leverage. At the graduate level, it is more of an employer’s market. At all levels, however, organisations are showing more interest and focus with regard to human capital and this is a positive development,” said Kuria Muchiru, partner at PwC Kenya and Africa human capital leader for PwC Africa.
Nine out of 10 top executives surveyed said that they have had to adjust the pay package of their employees because of the risk of losing them to the competition.
This preference among the EAC CEOs polled is much higher than the average among African CEOs, where about 75 per cent reported similar pressures. Globally, the rate is lower at about 70 per cent.
The PwC survey, dubbed The Africa Business Agenda,
which is to be released on October 11, sampled 301 firms in sub-Saharan
Africa — 31 CEOs from Kenya, 20 each from Uganda and Tanzania, and 15
from Rwanda.
And as firms increase salaries to match their rivals, they are also keen to boost their headcount — signalling a wave of new jobs across sectors in the region.
According to the survey, a majority of East African firms — 54 per cent of chief executive officers polled — intend to hire new staff over the next 12 months. Only about a quarter of CEOs interviewed said they intended to maintain their current headcount.
More job opportunities are to be found in Tanzania, where only about 12 per cent of businesses are not planning to hire more people.
At least 28 per cent of Kenyan and Ugandan CEOs said they expect the staff numbers in their companies to stay the same in the next one year. At least 33 per cent of CEOs in Rwanda expect the work force to remain at the current levels.
Human capital is increasingly becoming the most sought after arsenal in the region, as companies seek talent to drive their expansion strategies and grow.
Human resource experts said as a result of the pressure for better pay packages for top executives, the growth in salaries for managers will continue to outpace that of rank-and-file employees.
“At all levels within an organisation, recruitment and retention is about more than just pay. Successful companies know this, and they invest in a broad variety of incentives, rewards and programmes to build a corporate culture that influences retention,” said Mr Muchiru.
The pressure is particularly intense in Uganda,
where all the chief executives interviewed said they have had to adjust
pay in order to retain top talent.
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