A new report by HRINC Cambodia provides benchmarks for salaries and compensation to help employers navigate the remuneration quagmire

HR ADVICE

By Sandra D'Amico

Net Median monthly salaries by level

Net sector salaries versus market average

Net possition salaries versus market averae

When managers review their employees' salaries, they often have to rely on rumour, hearsay and personal anecdotes to get a feel for what "the market" is paying. A new report by HRINC provides some welcome facts and figures on salaries and benefits in Cambodia.

This year has been a challenging one for human resources (HR) managers in Cambodia. High inflation has directly affected the living costs of their employees, resulting in demands for large salary increases.

In addition, a shortage of skilled labour has seen employers competing fiercely to recruit and retain good people, placing further pressure on salaries. HR managers have had to balance staff demands for higher wages against demands from senior management to rein in costs amid the global recession.

To provide HR managers with a sound basis for decision-making, HRINC Cambodia has just released its annual survey of salaries and benefits paid by Cambodia's leading companies. Now in its fourth edition, this year's Private Sector Salary Survey 2008-09 is the biggest and most comprehensive salary survey ever undertaken in this country.

A total of 59 companies participated, which is three times as many as in the previous year. Interest in reliable and up-to-date information on market salaries has been so great that HRINC has also conducted separate surveys for the hotel, telecom and microfinance sectors.

HRINC classifies all jobs into 10 job levels, with level 10 being a low-level worker and level one being a managing director or country manager. For the 59 companies surveyed, the median net monthly salary for very senior managers was in excess of $3,000. At the other end of the spectrum, low-level workers (level 10) have a median net monthly salary of around $120.

Plumb sectors

HRINC's survey also provides some revealing insights into which sectors and jobs pay the most.

The survey divides companies into four broad categories: financial and professional services, hospitality, industrial - which includes manufacturing, trade, shipping and logistics - and technical, including construction, engineering, petroleum, telecom and IT.

For most job levels, companies in the technical category tend to pay above the market average. Hospitality companies tend to pay below-average salaries for mid- to low-level jobs, while companies in the services category pay below-market salaries for most job levels (although they often have higher bonuses).

Engineering jobs tend to pay higher salaries than other types of jobs. This is not surprising given the acknowledged shortage of skilled, experienced people with engineering backgrounds in Cambodia.

Qualified Cambodians are therefore more likely to command high salaries, while some positions have to be filled by expatriate engineers (who can command very high salaries). At the other end of the spectrum, production-related jobs tend to receive lower salaries than the market average.

The whole package

Another key finding of the survey is that total remuneration is about much more than just monthly salary. As the Cambodian labour market becomes more competitive, other aspects of remuneration are becoming increasingly important in attracting and retaining staff. Potential staff want to know about 13th-month cheques, bonuses and other benefits and allowances.

The most common benefits and allowances include telephone allowances, car or transport allowances and accident insurance. Some companies also provide other types of benefits and allowances, such as medical insurance, retirement benefits and study allowances. This growing emphasis on benefits and allowances is expected to continue in the coming years as companies look for innovative ways to reward staff.

Over the next few months, companies will be conducting annual salary reviews. HR managers take a range of factors into account when deciding salary increments for next year but most base this on employee performance, company results and inflation. Factors such as seniority and collective wage bargaining are given less weight.

Several recent studies have highlighted the "skills gap", where demand for skilled labour outstrips supply. This latest survey confirms those views. Employers highlighted a lack of qualified and experienced candidates as their major recruitment challenges.

A detailed report is available from HRINC that analyses salaries for all job positions, by job function and by job level. This level of analysis can be used by companies to answer the fundamental questions: How do I stay competitive in the labour market? How do I retain my staff?

In setting their compensation strategies, companies want to "pay enough without paying too much". Don't pay enough and you lose good people; pay too much and you can't compete on costs. Confronted with high inflation and slowing growth, this challenge has never been greater.

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Sandra D'Amico is managing director of HRINC.

For further information on HRINC's salary surveys,

Email [email protected] or visit www.hrinc.com.kh.