CIMA Sri Lanka salary survey 2007/2008

Sri Lanka salary survey Contents

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Contents

1. Executive Summary 2

2. Demographic profile 4

3. Salaries and bonuses 7

4. Benefits 10

5. Sector analysis 12

6. Hours of work 15

7. Satisfaction 17

Sri Lanka salary survey Executive summary

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Executive Summary

Between August and September 2007 CIMA conducted a salary survey with qualified CIMA professionals in employment in Sri Lanka.

Accountants and finance professionals are among the most highly sought after personnel in the world. Major employers seeking accountants compete fiercely for new recruits every year. As Sri Lanka’s economy continues to grow, the demand for accounting and financial analyst services is also growing. To meet these demands, Sri Lanka needs a constant supply of fresh, talented graduates. As a result, the Chartered Institute of Management Accountants (CIMA) professionals are constantly in demand. CIMA is the only professional body that qualifies accountants solely for business. CIMA members have an increasingly pivotal role to play in driving business success at the heart of the organisation – providing the basis for support for strategic decision.

This survey not only looks at how much a qualified CIMA professional earns in Sri Lanka, but also the types of benefits they receive and how far their expectations are being met in terms of their remuneration packages. The report has been split into the following sub-sections:

Demographic profileSalaries and bonuses Benefits Sector analysis Hours of workSatisfaction.

The survey is based on responses from 212 qualified CIMA Members and Passed Finalists1.

The demographic profile of a typical respondent to this survey is a 38 years old ACMA financial professional with 9 years post qualified experience.

The average monthly salary for a qualified CIMA professional is Rs. 168,000 per month, compared with the national average income for Sri Lanka as a whole, which stood at Rs. 13,705 per month in 20062 – representing a 12-fold difference. The continuing strength of demand for management accountants has been instrumental in driving up the salaries of qualified CIMA professionals. Those working in the manufacturing sector receive the highest salaries (Rs. 222,000).

On average, qualified CIMA professionals expected to receive bonuses equivalent to 1.75 months of their annual salary in 2007. Financial Directors are doing somewhat better than their counterparts, being the most likely to walk away with a bonus equivalent to 2.3 months salary in 2007. By sector, bonus potentials are highest in accountancy practices, where respondents are, on average, also expecting bonuses equivalent to 2.3 months of their salary.

The average benefits package received on top of basic salaries is worth Rs. 56,000. The biggest mismatch between benefits received and the benefits deemed to be of most importance is for pensions. Although just 9% currently receive this as a benefit, three-quarters cite pensions as being extremely important to them.

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1 CIMA students who have completed all of their exams but have yet to submit their practical experience requirement2 Source: Department of Census and Statistics – Sri Lanka

Malaysia salary survey Executive summary

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The typical working week for a qualified CIMA member is 48 hours. The longest hours are worked by:

those aged between 41 and 50, who work 49 hours in a typical week compared with under 40s who typically work 47 hours per week

CEOs, who typically work a 54 hour weekmen work a 49 hour week compared to women who typically work a 45 hour weekthose in the manufacturing sector, who on average work 51 hours in a typical weekthose with 20+ years post-qualified experience, who typically work a 50 hour week.

The good news is that 70% of qualified CIMA professionals are working similar or fewer hours compared with two years ago.

Although 64% of qualified CIMA professionals are satisfied with their current salary and benefits package, worryingly almost 3 out of 10 are ‘not very satisfied’ and a further 8% are ‘not at all satisfied’ with their pay and benefits. The main cause of dissatisfaction appears to come from those on the lowest salaries with a staggering 83% saying that they are either ‘not very satisfied’ or ‘not at all satisfied’ with their current salary and benefits. This compares with those in the higher salary brackets, where just 9% of those earning over Rs. 500,000 are ‘not very satisfied’ or ‘not at all satisfied’ with their current salary and benefits.

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Sri Lanka salary survey Demographic profile

Demographic profile

Post-qualified experience

CIMA’s post-qualified membership base in Sri Lanka comprises a good spread of newly qualified and more experienced members, with an average of nine-years post-qualified experience (Fig. 1). This combination of experience and newly qualified finance professionals within the Institute characterises CIMA as a healthy and growing membership organisation.

Grade

The split of CIMA membership by grade is also fairly well balanced, with 58% of post-qualified CIMA professionals at Associate level (ACMA). A further 22% of post-qualified CIMA professionals are Fellows (FCMA), illustrating the breadth and knowledge of qualified CIMA professionals currently employed in Sri Lanka. In addition, 20% are Passed-Finalists, which indicates a healthy stream of future Members to the Institute.

Figure 1. Number of years post-qualified experience

Figure 2. Post qualified CIMA professionals by grade

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Sri Lanka salary survey Demographic profile

Age

The average age of a post-qualified CIMA finance professional in Sri Lanka is 38, although almost one-third (30%) fall in the 30 or under age bracket (see Fig 3).

Gender

Around two-thirds (68%) of the respondents to this survey were male and one-third (32%) female. This is broadly in keeping with the actual level of qualified CIMA professionals in Sri Lanka, where four out of ten are female.

Job functions

As one might expect, a high concentration of qualified CIMA professionals in Sri Lanka are working in management positions, of which 14% of respondents working as Finance Directors and another 14% working as Finance Managers. Indeed the wide range of job functions and the fact that so many are employed in ‘other’ job functions reflects the diversity and flexibility of the CIMA qualification.

Figure 3. Age of respondents

Figure 4. Job title

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Sri Lanka salary survey Demographic profile

Sector

More than half of qualified CIMA professionals in Sri Lanka work in either the Manufacturing (27%) or Financial Services (26%). The spread of sectors in which CIMA professionals are employed, further demonstrates the breadth of the qualification amongst employers and highlights that CIMA is relevant across all industry sectors. Those working in ‘other’ industry sectors include amongst others those employed in business process outsourcing (BPO’s), advertising, and fast moving consumer goods (FMCG’s).

Figure 5. Membership by sector

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Sri Lanka salary survey Salaries and bonuses

Salaries and bonuses

Salaries

Continued strong demand for management accountants has been instrumental in driving up the salaries of CIMA professionals. The average monthly salary for a qualified CIMA professional in Sri Lanka currently stands at Rs. 168,000. This compares extremely favourably to the national average income for Sri Lanka as a whole, which stood at Rs. 13,705 per month in 2006 – representing a 12-fold difference. The majority (63%) of qualified CIMA professionals in Sri Lanka however are earning between Rs. 50,000 and 199,999 per month.

As one might expect, Financial Directors and CEO’s /Managing Directors earn the highest salaries by some margin, with average monthly earnings amongst these groups at Rs. 339,000 and Rs. 338,000 respectively. Accounts assistants fair worst, earning an average of Rs. 40,000 per month.

3 Source: Department of Census and Statistics – Sri Lanka

Figure 6. Gross monthly salary (Rs.)

Figure 7. Gross monthly salary by job title

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Sri Lanka salary survey Salaries and bonuses

Bonuses - fixed or variable?

Bonuses for more than seven out of ten qualified CIMA professionals are variable, with the remaining 27% receiving fixed bonuses.

In terms of job roles, Financial Directors are the most likely to receive variable bonuses, while Management Accountants are most likely to receive fixed bonuses this year.

By sector, those working in the public sector are most likely to receive fixed bonuses, with those working in accountancy practices most likely to receive variable bonuses.

Bonus potential in 2007

On average, qualified CIMA professionals were expecting bonuses equivalent to 1.75 months worth of their annual salary in 2007. Almost half (48%) of qualified CIMA professionals were expecting a bonus of between one and two months salary in 2007, but 14% expecting to receive no bonus at all.

Figure 8. Fixed vs variable bonuses

Figure 9. Annual bonus potential

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Sri Lanka salary survey Salaries and bonuses

Financial Directors are doing somewhat better than their counterparts, being the most likely to walk away with the best bonuses in 2007, equivalent to 2.3 months of their annual salaries.

Those working in accountancy practices and financial services are most likely to receive the highest bonuses, worth on average, the equivalent of 2.3 months and 2.2 months of their salary respectively.

Unsurprisingly, it was anticipated that bonuses would be highest amongst those employed by the largest companies with a global turnover great than Rs. 5 billion in 2007.

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Sri Lanka salary survey Benefits

Benefits

Healthcare/medical care tops the list of benefits received with 86% entitled to this. Other prominent benefits include pensions, with just over seven out of ten (72%) entitled to this benefit and more than two-thirds (68%) benefiting from a company car or car allowance. However, flexibility of staff hours within organisations could be improved, with one-fifth (20%) offering flexible hours and just 2% allowing staff to work from home.

In terms of the importance of benefits to individuals, vehicle/fuel allowance and a company car or car allowance were considered to be the most important benefits, followed by healthcare/medical care and then bonuses (see Fig 11).

Figure 10. Benefits received

Figure 11. Importance of benefits

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Sri Lanka salary survey Benefits

The biggest mismatch between benefits received and the benefits deemed to be of most importance are:

Pensions – important to 76% but only received by 9% Life assurance – important to 78% but only received by 22%Flexible hours – important to 77% but only received by 20%

Companies are also failing to meet the expectation of employees in term of leisure facilities/entertainment, which is deemed important by 79% but only received by 35% of qualified CIMA professional (Fig.12).

The average benefits package is worth Rs. 56,000, however one-third of qualified CIMA professionals receive benefits with a financial value of less than Rs. 30,000 (see Fig. 13).

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Figure 12. Importance of benefits vs benefits received

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Company car/allowance

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Mortgage ReliefSabbatical

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Figure 12. Importance of benefits vs benefits received

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Failing to meetSatisfied

Exceeding requirements

Bonus

Figure 12. Importance of benefits vs benefits received

Importance

Figure 13. Financial value of benefits

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Sri Lanka salary survey Sector analysis

Sector analysis

Those working in accountancy practices typically have the highest number of years post-qualified work experience (13 years), while those in the plantations sector on average have the least number of year post-qualified work experience at just 3.9 years. On average, respondents had 9.2 years post qualification work experience across all sectors.

Qualified CIMA professionals working in Manufacturing and Retail are earning the highest salaries when compared with their colleagues working in other sectors. An average wage for those working in the Manufacturing sector is Rs. 221,800 and Rs. 213,300 for those working in the Retail sector. However, it is worth noting that after accountancy practices, these two sectors have the most experienced CIMA professionals working for them. At Rs. 56,900 per month, the public sector sits at the bottom of the pay scale, although this may reflect the high number of female respondents working this sector .

Figure 14. Number of years post-qualified experience by sector

Figure 15. Gross monthly salary (Rs.) by sector

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Sri Lanka salary survey Sector analysis

Bonus potentials for 2007 were highest in accountancy practices, where respondents were, on average, expecting bonuses equivalent to 2.3 months of their annual salaries. Reflecting their relatively low salaries, those employed in the public sector were also expecting their bonuses to be lower than in any other sector at just 0.7 months salary.

The number of hours worked by sector fairly closely mirrors the salaries of each sector, suggesting that within some sectors there is a culture of working longer hours for which employees are rewarded financially. Reflecting their high salaries, those working in the manufacturing sector typically work the longest weeks - 51 hours compared to an average of 48 hours across all sectors. Despite the manufacturing sector working the longest hours, they are the second most satisfied sector, which suggests that although they have to work hard for their salaries, they are happy to do so.

Figure 16. Annual bonus potential for 2007 by sector

Figure 17. Number of hours worked by sector

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Sri Lanka salary survey Sector analysis

The majority of sectors are fairly satisfied with their current salaries and benefit packages, with two exceptions. Those working in accountancy practices stand out as being very satisfied, while those in property and real estate are the only sector to fall into the ‘not very satisfied’ category.

Figure 18. Satisfaction with salary and benefits package by sector

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Sri Lanka salary survey Hours of work

Hours of work

The typical working week for a qualified CIMA professional is 48 hours, and half work between 41 and 50 hours per week. In addition, a further 28% work between 51 and 60 hours in a typical week, with 5% working more than 60 hours per week.

The longest hours are worked by:

those aged between 41 and 50, who work 49 hours in a typical week compared with under 40s who typically work 47 hours per week

CEOs, who typically work a 54 hour weekmen work a 49 hour week compared to women who typically work a 45 hour weekthose in the manufacturing sector, who on average work 51 hours in a typical weekthose with 20+ years post-qualified experience, who typically work a 50 hour week.

More than half (55%) of qualified CIMA professionals are working similar hours compared with two years ago, with a further 15% working fewer hours. With almost three in ten qualified CIMA professionals working longer hours than they were two years ago, the main reason for this appears to be through taking on more responsibility or an increase in pressure, with over two-thirds (69%) of those working longer hours citing this as a reason. However, a whole range of factors seem to be leading to increased hours including changes in their job role, company growth, company culture and understaffing (see Fig 21).

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Figure 19. Typical hours worked in a week

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Sri Lanka salary survey Hours of work

Figure 20. Work longer hours than two years ago

Figure 21. Reasons for working longer hours

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Sri Lanka salary survey Satisfaction

Satisfaction

64% of qualified CIMA professionals are satisfied with their current salary and benefits package, of which 16% are ‘very satisfied’ and 3% ‘extremely satisfied’. Worryingly almost 3 out of 10 are ‘not very satisfied’ and a further 8% are ‘not at all satisfied’ by their current pay and benefits. The main cause of dissatisfaction appears to come from those on the lowest salaries with a staggering 83% saying that they are either ‘not very satisfied’ or ‘not at all satisfied’ with their current salary and benefits. This compares with those in the higher salary brackets, where just 9% of those earning over Rs. 500,000 are ‘not very satisfied’ or ‘not at all satisfied’ with their current salary and benefits.

Amongst those most satisfied are:

those aged between over 51 CEOs/Managing Directors followed by Financial Directorsthose working for accountancy practicesthose earning the highest salaries of more than Rs. 500,000 those working longer weeks. Those who said they were extremely satisfied with their current salary

and benefits package work on average 55.5 hours per week.

The least satisfied groups are:

those aged 40 and underaccountantsthose working in the property and real estate sectorthose on the lowest salaries earning less than Rs. 50,000those working the least hours are also least satisfied.

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Figure 22. Satisfaction with salary and benefits package