A quick scan of recruitment adverts can give you a good idea of going rates but salary surveys are a better benchmark, writes Caroline Madden
It can be difficult to determine with any degree of certainty whether you're getting paid the right rate for your job. Conversations with colleagues and friends on the delicate subject of salary can be misleading - some people prefer to play down their earnings, while others can't resist a little embellishment. And although a quick scan of relevant job adverts can provide a rough guide, recruitment agencies tend to advertise their highest paid positions, so you may end up overestimating the going rate.
Salary surveys are possibly the most reliable benchmarking tool available to employees interested in seeing how their salary compares to the market rate.
The latest salary survey conducted by the Irish Management Institute (IMI) dispels the myths surrounding the earning power of Irish executives and provides a snapshot of current remuneration levels across various sectors.
It also gives an insight into major trends in the market, such as the increase in executive salaries of 5.5 per cent during the period April 1st, 2004 to April 1st, 2005.
After factoring in inflation, this meant a real pay gain of 3.3 per cent, but the report revealed that this increase was not evenly distributed across the executive spectrum. While chief executives averaged a healthy raise of almost 10 per cent, middle management felt the pinch with an average salary drop of 2.7 per cent.
However, the overall outlook for executives is positive for 2006, with half of the companies surveyed indicating they will increase salaries next year.
The results of the survey, which covered 170 companies and 6,578 managers, also confirmed that company size is a key factor influencing managerial salary levels. For example, companies with fewer than 100 employees paid their chief executives an average of €140,000, compared to €216,900 paid by companies with over 1,000 employees.
Similar trends were found at lower levels, with middle management salaries averaging €61,000 in the smallest companies, compared to €75,800 in the largest organisations.
Most executives reading the IMI report will probably have flicked straight to the industry sector analysis section to see how their salary package compared to the norm in 2005. Those employed in blue-chip companies - specifically banking, insurance, finance and professional services - will have been pleased to see that, from the bottom rung of the managerial ladder all the way up to chief executive level, executives in this sector outperformed all others in terms of average earning capacity.
On average, first level management (eg supervisors, team leaders) earned €65,640, middle managers received €84,360, and directors (ie, heads of functions) were paid €124,000. Half of all chief executives earned €217,500 or above, while a quarter earned €372,500 or more.
Although not quite in the same league as the financial sector, the semi-state, IT and healthcare/pharmaceutical sectors were also lucrative areas for executives this year. In the semi-state sector, those at middle management level averaged €76,000 per year, directors earned average salaries of €115,000, and chief executives were typically paid €175,920.
While the average chief executive salary in both the IT and healthcare/pharmaceutical industries was €177,000, first-level manager salaries varied quite significantly, with those in IT averaging €31,150, compared to €52,000 in healthcare and pharmaceutical companies.
The lowest paid managers generally worked in manufacturing industries such as engineering, building and construction, where the average remuneration for middle managers was €60,900, and €129,025 for chief executives.
These salary comparisons factored in payments such as bonuses, cash allowances and overtime, as well as basic salary.
Some 90 per cent of companies indicated that they had an annual performance bonus scheme in place, and the percentage applied increased with seniority of position. For example, middle managers typically received bonuses up to 15 per cent of their salary, while the majority of chief executives' bonuses were 30 per cent or less of salary.
Apart from cold, hard cash, executives may also be curious as to what perks and benefits were normally added to remuneration packages in 2005. The IMI findings show that the majority of organisations provided non-monetary benefits in some form to motivate those at management level. Almost half of the respondent companies now operate long-term incentive schemes, of which share options and profit sharing schemes proved the most popular, with 28 per cent of chief executives and 15 per cent of middle managers participating in such schemes.
Half of all chief executives were provided with company cars, compared to just one in four middle managers, and, while the former usually drove Mercedes-Benz or BMW, the latter made do with Toyota or Renault. The year saw a significant increase in the number of companies offering a cash alternative to a company car, and almost one-quarter of chief executives opted for cash.
Additional benefits commonly included payment of professional subscriptions, education fees, and medical insurance, as well as the provision of car parking spaces and subsidised restaurants.
Although the number of female executives increased slightly this year, the upper echelons of management remain distinctly male dominated, with only 5 per cent of chief executives being female.
Women starting out in management will be interested to note that, while less pronounced, an imbalance exists even at first-line management level, where 63 per cent of managers are male.
The survey didn't delve further into the thorny issue of gender inequality, but a recent ESRI study revealed that a gap emerges between the earnings of men and women surprisingly early in their careers. According to that study, female graduates can expect to be earning 11 per cent less per week than their male counterparts within just three years of graduation. They are also less likely to receive bonuses or promotions within that time.
