Salary trends in Africa and the Middle East are largely influenced by the need to attract or retain people with the required skills, says Alan Hosking
Salary increases granted to business executives around the world always beat inflation, says Jim Steer, director at Deloitte & Touche Human Capital Corporation (HCC). He made this comment after extracting the figures relating to executive pay increases from HCC's international associate Watson Wyatt's latest Global Executive Remuneration Survey, which examined executive pay in 50 different countries.
Steer says this is as true in developed countries with booming economies and low or even negative rates of inflation as it is in African or Middle East countries with contracting economies or high levels of inflation. And he believes that executive remuneration trends have as much to do with improvements in productivity and perceived price increases as they do with a global shortage of talented executives.
"Thanks to technology, executive skills are readily transportable over geographic borders. If executives in one country feel that their standard of living is being compromised by high inflation, it is relatively simple for them to emigrate," he says.
Steer concedes that in countries with a more chronic skills shortage, there is more pressure on companies to find ways to reward executive loyalty, although he is quick to point out that remuneration is only one factor in retaining managerial talent. There are a number of other factors outside the control of business that can prompt the emigration of skills. In South Africa, for example, emigration of skilled individuals is exacerbated by factors such as the crime rate in the country.
While Africa and the Middle East differ dramatically in many ways, they share a number of similarities. With the exception of a few countries, both regions are known for ongoing conflicts or a serious risk of future conflict. This makes a huge difference to their attractiveness as a place of work for foreign nationals, a factor which further adds to the affected countries' woes, as many of them are very dependent on foreign skills. The