by Simone Cadwell

Earn your worth

Are executive salaries too high?

IT staff required
A shortage of IT skills

A recent survey asked local business owners what they think of the wages earned by other people. Wether or not it is a true reflection of how executive salaries are completely out of kilter with the wages of the masses, remains to be seen.

The survey by Grant Thornton also found that 87% of business owners think companies should disclose the individual remuneration of directors, and, very sensibly, 96% believe executive pay should be directly linked to the quality of their performance.

This inspired Brainstorm to conduct a mini poll of its own, and ask CIOs what their views were. Were they and their IT staff overpaid, were they adequately rewarded for their skills and contribution to their company’s success, and whether they felt their rewards were too low. As one might suspect, several companies declined to take part as salaries are regarded as a highly sensitive matter.

Paul Kennedy, CIO of PricewaterhouseCoopers (PWC), says IT professionals are generally remunerated reasonably well. “There will always be some who are paid less, while others earn more. What adds to the premium paid for IT staff is the lack of skilled people available to employ. This is directly related to the lack of maths and science graduates coming out of our schools and tertiary education institutes,” he says.

“The salary premiums paid are further exacerbated by the desire by many large companies to transform and appoint a representative staff consisting of African, Coloured and Indian (ACI) candidates. Due to the specific shortage of ACI candidates, they can, in some instances, demand salaries way beyond what would normally be acceptable. This can have the effect of creating unfair salary gaps within salary bands, resulting in a snowball effect that pushes up organisations’ salary bills.”

The only real solution to ensuring that salaries are fair, reasonable and justified would be to produce more professionals from our learning institutions to reduce the general skills shortage in the IT sector, Kennedy says.

“I don’t believe CIOs and their IT staff are generally overpaid,” says Len de Villiers, CIO of Bayport Financial Services. Remuneration surveys conducted across SA’s technology industry track the compensation levels of technology specialists, and companies use these salary indicators and trend analysis to structure their compensation packages competitively, he says.

Yet the significant shortage of IT skills and experienced IT leaders is creating a demand for these scarce skills and will put pressure on remuneration packages to remain competitive.

“Companies in South Africa are prepared to pay good remuneration packages to CIOs and IT staff who have a solid and reputable track record and a history of delivery,” says De Villiers, who has worked in the IT industry for 25 years.

Companies that do not keep in line with market trends will very quickly lose their top talent to competitors as the pressure for these scarce skills continues to escalate. Good compensation structures, reward mechanisms and incentive schemes are crucial to retaining IT professionals, and most CIOs have made attracting, developing and hanging on to key talent one of their highest priorities.

Government bodies regularly complain that they cannot attract the best people because they can’t match private sector wages, particularly for IT positions where the scarcer skills already attract a premium even in the private sector.

Douglas Cohen, a specialist in economic development and ICT with the South African Local Government Association (Salga), paints a bleak picture of the career prospects.

Cohen confirms that local government lacks ICT skills, which is worrying because the ability of municipalities to deliver services depends on the quality of their people and other resources.

“Attracting and retaining ICT staff with scarce skills remains a critical challenge,” Cohen says.

“The municipalities are not only competing with the private sector that offers more lucrative salaries, but also with better opportunities from within central government. Unfortunately, the reality is that government staff is made up of under-qualified professionals with watered-down skills that are not geared for real-life ICT crises and challenges. This negatively affects the optimal running of ICT departments and delivery of government ICT projects.”

An index that monitors staff retention shows that local government retains only an average of 30% of key ICT personnel.

“Technology on its own cannot achieve anything and it must be supported by capable people and tested processes to provide services in which the public can have confidence,” Cohen says. 

“Through this approach, we hope more qualified, better-paid and more strategic resources will be attracted into the municipal ICT sector,” Cohen concludes.

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