COMPANIES PAYING BONUSES DESPITE TOUGH MARKETS
End-of-year bonuses are on the cards – for both staff and top executives – at many
of SA’s leading companies, a recent survey reveals.
Throughout the year, many have been faced with the prospect of a bleak festive
season as news broke of tough trading conditions, and the chance that packages would
be frozen and bonuses slashed. In SA, top staff have felt ongoing pressure on their
packages as salaries and bonuses have taken a continued battering from the ripples
of the 2009 financial crisis.
Although the economic environment remains strained, the latest Jack Hammer Corporate
Survey reveals that companies are sticking with their bonus culture – and their
obligations – even though company performance may be tepid.
Asked whether their staff would be receiving a 13th cheque or bonus this year, 100%
of the companies polled answered in the affirmative.
The survey was conducted this month among South Africa’s top corporate employers by
leading executive search firm Jack Hammer Executive Headhunters. Entities polled
were from the banking, investment banking, wealth management and FMCG sectors, as
well as government, manufacturing and insurance.
All respondents indicated that their junior and mid-level staff would be receiving
end of year sweeteners, says Debbie Goodman-Bhyat, MD of Jack Hammer. “But what
needs to be kept in mind is that many companies are contractually obliged to
disburse 13th cheques regardless of performance,” she added.
“I would not say that the response indicates an easing of the extreme
belt-tightening experienced over the past few years,” says Goodman-Bhyat.
“Rather, companies have recognised that to withhold the expected 13th cheque because
markets are tough becomes a big issue with staff morale and ultimately productivity
and staff retention.”
The survey indicates that of the companies polled, 75% indicated without
qualification that employees would receive end-of-year bonuses or 13th cheques,
while bonuses linked to staff performance would also be paid should the company show
What is clear is that in all sectors, from investment banking to manufacturing,
performance or profit share bonuses would be paid out to senior staff where
individual and company performance targets were met – but that the expected sums are
set to be smaller than they would have been prior to the global financial crisis.
“Since then, bonus sums have consistently remained weak. The bonus structures,
formulae and ‘potential’ have not changed, but the amounts disbursed have in almost
no instances reverted to pre-2008 highs,” says Goodman-Bhyat.
“Nevertheless, hope remains; because we still have executive candidates discussing
their bonus ‘potential’ and the sums they used to receive 3 or 4 years ago when
negotiating offers with a new employer. However the new reality has set in and a
‘new normal’ in terms of bonus payouts is emerging.”
ISSUED BY: Lange 360
ON BEHALF OF: JACK HAMMER EXECUTIVE HEADHUNTERS
For more information contact:
Debbie Goodman-Bhyat at Jack Hammer Executive Headhunters on 021 425 6677
Mervyn Dziva at Lange 360 on 021 448 7407
About Jack Hammer Executive Headhunters
Jack Hammer provides a fresh approach to executive headhunting by cutting through
the ordinary. They have achieved this over the last decade by using strategic
research to drill down and expand their market intelligence beyond the obvious and
source the real gems of talent. The knowledge gained in the process enables them to
give clients a competitive edge by ensuring they find the right executive talent –
in a manner that is both responsible and ethical.
Debbie is the founder and Managing Director of Jack Hammer Executive Headhunters –
rated by the Business Day as one of SA’s leading executive search firms.
Jack Hammer, with Debbie at its helm, has become a cornerstone of the South African
headhunting sector, continually and vocally aiming to raise the bar in the local
executive search industry. As a result, in 2011 Jack Hammer was selected as the
exclusive South African partner of IRC Global Executive Search Partners, a top 10
global search firm, and has now extended its global footprint to more than 70 cities
Debbie is a founding member of the Cape Town Chapter of EO – a global
Entrepreneurship Organisation with more than 8500 members worldwide.