SA Financial sector "cautiously optimistic" on jobs in 2011

The first glimpse at South African employers' expectations of 2011 reveals a picture of stability, with financial services doing better than other sectors. The Manpower survey for the first Quarter of 2011 forecasts a "modest increase" in staffing levels in South Africa, with 13% of employers expecting to take on more staff and only 8% expecting to lay people off.

The percentage of employers who indicate they will make "no change" to staff levels has increased since the last quarterly survey: this "suggests a measure of stability in the South African labour market with a significant portion of employers indicating that they are determined to maintain the talent they have as we work towards recovery," says Peter Winn, managing director of Manpower SA.

In general South African employers have "a cautious approach towards expenses and payrolls as we enter the first quarter of 2001," says Winn, while in financial services the situation is brighter and "employers report cautiously optimistic hiring plans for the coming quarter. The Outlook is slightly stronger quarter-over-quarter, but declines moderately when compared with Quarter 1 2010."

In this sector, given the skills shortage, employers are particularly keen to retain talented staff and remuneration packages are a crucial tool. For this reason banking is the highest paid industry in South Africa, according to the latest Remuneration Report by Mabili Reward.

While the average package for a CEO is 4.29m Rand a year, in financial services the median figure almost doubles to R8.2m. "Financial rewards play a vital role in retaining human capital and getting the financial component right is an entry ticket to the game," says Laurence Grubb, managing director of Mabili Reward. "89% of our survey respondents feel that the current shortage of skills is their most pressing retention challenge."

Banks have to juggle like never before the contrasting imperatives of cutting costs and keeping salary increases low and of offering packages attractive enough to retain talented staff. Next to a guaranteed package, "short-term incentives are the second most important factor retaining employees," says Grubb. "Interestingly the current recession is having a marked effect on the level of short term incentive payouts, with the overall level having dropped from 53% to 33% of guaranteed pay. Incentives are also more tightly linked to performance."