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The rise and fall of executive demand
The first annual MSL Index report on SA reveals some interesting trends, writes JANETTE BENNETT
WHILE demand for business executives fell off sharply towards the end of last year, demand in the non-business sector ended the year a third higher than it started.
This is revealed in SA's first annual MSL Index report. The Index, which tracks senior appointments advertising in Business Times Appointments, has been published since July. Its compiler, Dr Derek Jones, now has a full year's data at his fingertips.
The MSL Index has been compiled in the UK since 1959, and it is regarded as a useful barometer of the economy. The UK Index, which Jones helped to develop, is based on job advertisements in several top publications.
The Index focuses on executive and management positions. During 1999, 7 753 of these positions were advertised in BT Appointments. Of these, 59% were business positions and 41% were non-business. Non-business refers to central, provincial and local government; parastatals; universities and technikons; and international agencies.
Parastatals and the tiers of government make up the lion's share - almost 90% - of the MSL Non-Business Index, accounting for more than a third of the total demand for all executives. "Putting this another way, there has been more demand in SA in 1999 for executives for government positions than there has been for any other single category of executives in the business sector, even for financial managers in the whole of industry and commerce," Jones says.
Indeed, financial managers were in greatest demand throughout the year, accounting for 23% of job adverts. Sales and marketing managers made up 13% of the total, systems and IT managers made up 5.6%, human resources managers made up 4%, general managers made up 2.2%, and production managers 1.9%.
Jones broadened the scope of the Business Index later in the year to break down business adverts further by sector. The MSL Business Index shows banking and financial services making up the highest demand (15.9%), followed by manufacturing (9.5%) and IT systems/services (6.9%). Perhaps surprisingly, the hype around Y2K did not translate into an increase in demand for IT exectives. As Jones puts it: "The Y2K problem might have required more cowboys, but there shouldn't have been any need for many more sheriffs."
He also looked at salary levels - 54% of adverts for the biggest group, financial managers, included this information. These managers were offered salaries ranging from R600 000 a year (for a group financial director) to R127 000 (for an internal auditor), with an average of R290 415 for the group in the fourth quarter.
Jones points out, however, that true earnings for financial managers could be 50% to 100% higher than advertised - many adverts hinted at substantial fringe benefits and taxfriendly perks.
The highest salaries recorded in 1999 were R1.2-million, recorded early in the year. The high average salaries, Jones says, suggests there is "a genuine shortage of executives in this field, forcing recruiters to increase their offers to tempt good people out of their current positions".
A quarter of financial managers were being recruited for the banking and financial services sector, 10% to 15% for IT, Internet services and telecommunications, around 5% for manufacturing, and 5% for central government departments.
Gauteng consistently accounted for the overwhelming majority (65.8%) of executive appointments. The Western Cape was a distant second (11.6%) and KwaZulu-Natal third at 8.2%.
The Business, Non-Business and All Executives indices followed each other closely until mid-year, dipping over the Easter period, lifting just before the general election in June and then growing steadily until October.
From August to October, the Non-Business sector showed strong growth as the government began tackling restructuring issues. In the final quarter of 1999, business sector demand ended the year 13% lower than at the start of the year. Non-business demand grew 34% during this period.
Last year - which saw SA clawing its way back from the edge of recession - is likely to prove to be a relatively weak year for recruitment. The year ahead looks far more positive, with economic growth forecasts of up to 4%.
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