African Expatriate Salaries Hit Bottom, Looking Up for 2017

Payroll
EXPATRIATE salary benchmarks in Africa have reached their low with 75% of companies looking to pay increases in 2017, according to African-specialist HR consultancy firm Globe 24-7.

Globe 24-7’s annual African Remuneration and Benefits Benchmarking Report gathers expatriate remuneration, benefits and employment conditions data from over 25 ASX, TSX, JSE and AIM-listed African mining companies.

Globe’s CEO & Principal Lachlan Spicer said that the report released on November 1st provided valuable insights into the current employment market for expatriates working in Africa.

“Over the past few years, we’ve seen significant drops in expatriate salaries especially for new hires and many companies have implemented dramatic cost cutting measures. For the first time in 3 years, we can report that positive sentiment is returning. Three-quarters of our participant group indicate they will be implementing salary increases in 2017.”

Whilst this reflects a more positive outlook than years gone by, Spicer cautions such optimism stating that “for companies planning an increase next year, the forecasted amount remains a very modest 2% on average. Still, it will be welcome news as in 2016 60% of expatriates received no salary increase at all and of those that did, the average was only 1.3%.”

The report also found that Short Term Incentive (STI) payouts have risen dramatically in 2016 with average payouts at 99% of target bonus amounts.

“For companies who have an STI program, payouts have steadily increased over the past couple of years and are proving to be a great tool for these organisations to engage their workforce to achieve key personal, site and corporate objectives focussing on safety, production and financial performance targets” added Spicer.

In light of this more positive sentiment, the report also found that 2017 will again be focussed on tight fiscal management for all employee-related costs as uncertain commodity prices and investor cautiousness hangs over the heads of African mining companies.

“The market is still wary (and weary) after several tough years and most employee-related cost items have been closely reviewed during 2016. If it’s not salaries, it’s rosters, flights, travel class, insurance providers, accommodation arrangements and even regular site services under the microscope. I’m aware of one company who made changes to its laundry service this year to cut costs.”

The benchmarking report provides insights into rosters, travel and other benefits and Spicer states how important it is to view compensation in its entirety adding that the report had proven useful for companies to help make informed decisions on their remuneration practices “a CEO or CFO wants to know what the benchmark salary is when deciding to employ a West African or a Canadian or an Australian to their operation as all other employee ‘on-costs’ fall from that very first decision. This quantitative data helps them develop a robust compensation structure in light of the current market conditions in Africa”.

The report was released on November 1, 2016.

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