This is according to Debbie Goodman-Bhyat (corr), CEO of executive search firm Jack Hammer, who says an analysis of the remuneration that is offered to executives who are headhunted shows that while there’s been a significant decline in the increase percentage offered to headhunted executives, companies are more than willing to fork out the big bucks for women and black executives.
“From 2015 to 2017, the premium on salaries for headhunted women exceeded premiums offered to men, and was higher than the average premium for headhunted candidates. In other words, if you’re a female candidate headhunted for a role, you’re likely to receive a higher premium on your current package than male candidates,” she says.
“In some cases, these increases also reflected package adjustments, where female candidates started from a lower base than men.”
The average increase companies spent on executives working in the financial services industry fell from a 27% increase last year to 20% this year, while the average increase for executives working outside of non-financial services dropped 7% from 29% last year to 22%.
But when it came to appointments that would positively impact the transformation goals of an organisation, the data shows that companies were a lot more willing to stretch the budget to go all out to secure a black executive-level candidate – in most cases going 10% higher than their white peers.
“But compared to previous years, the average premiums offered to high-demand candidates – women and black executives – still reduced significantly. There’s not much in the budget to attract even high-demand short-supply candidates, which may, unfortunately, further impact the pace of transformation,” says Goodman-Bhyat.
The decline in the average package increases, she says, can be attributed to the “hangover of long-term economic erosion, with less cash to go around in all areas, with government and the private sector”.
While the appointment of President Cyril Ramaphosa to the presidency has invoked a renewed hope for the country’s economic turnaround in the form of “Ramaphoria”, the impact of former President Jacob Zuma’s administration will still be felt for some time to come.
“In the past, companies would have had an attitude of paying what it takes to get the right people on board. Now they’re saying if they can’t afford the premium, they won’t go ahead with an appointment. As much as companies recognise the importance of bringing on board the best talent, this still needs to be in the realm of affordability,” she says.
Ramaphosa’s appointment has started the process of businesses green-lighting new projects and a renewal in investment sentiment.