CIMA Sri Lankaqualified salary survey 2011

Table of contents

Foreword 2

Executive summary 3

Economic context 4

Main findings 4

Overview of remuneration packages and the career ladder 4

Expectations for future pay and conditions 7

Improving employability and opportunities 11

Attracting candidates and retaining employees 12

One word to describe...management accounting 16

Appendix 17

Table of salaries and bonuses 17

Technical information 18

Further information 18

Acknowledgements 18

Global offices 19

2

Foreword Welcome to our third global members’ salary survey. Each year, we ask Chartered Management Accountants to give us an insight into their working lives and their outlook for the year ahead. The results give us a valuable snapshot of the current employment experiences and career aspirations of CIMA’s members. Internationally, nearly half our members are expecting a salary increase during the next 12 months. Just a quarter are expecting a pay freeze and this is a notable drop from last year’s figure of 45%. In Sri Lanka, the number of members expecting a pay rise is significantly higher at 64%. Satisfaction with salaries has also increased 10% since last year’s survey. We believe our members’ optimistic outlook reflects Sri Lanka’s rapid economic recovery and that our survey provides clear indications that the majority are feeling comparatively recession-proof. While CIMA members can command top-level salaries, many are working long hours for their rewards. In 13 of the 14 countries surveyed, two-thirds or more of members are working over 40 hours a week – and sometimes up to 50 hours. This chimes with our findings in Sri Lanka, where more than half (54%) are currently working between 41 and 50 hours a week and 25% are working longer hours. Increase in working hours are anticipated for the year ahead, particularly in Sri Lanka, the UK, Singapore, Malaysia, Hong Kong, China, South Africa and the UAE. These figures show the pressures on members on either side of the coin. On one side, Chartered Management Accountants are helping their employers to meet the additional demands of surviving in the downturn while on the other side, they are supporting organisations as they experience rapid growth. While financial reward is evidently a major motivator for our members, our survey found that quality of life is also important. In seven of the 14 countries surveyed, a good working environment, a challenging workload and a good work/life balance are also valued. In terms of working in other countries, Australia (54%) and the UK (32%) are the most popular destinations for Sri Lankan members. Cautious optimism is still the general outlook of our members across the world. Closer to home, CIMA members in Sri Lanka have made it clear that they are reaping the benefits of their professional qualification. A total of 93% said that their CIMA skills has opened up greater career opportunities and 88% said the qualification has given them greater access to others areas of the business. 93% said their CIMA toolkit had also provided more scope to develop an international career. For the first time, our Sri Lankan members were asked to describe what management accounting means to them in a single word. The four most frequent words were: essential, challenging, strategic and dynamic. I would contend that our members have provided four very good reasons why CIMA’s offering continues to be the qualification of choice in the global business arena.

Charles Tilley Chief Executive CIMA

3

Executive summary

The 2011 CIMA survey reveals that members in Sri Lanka are earning on average Rs.195,397 in basic monthly salary, but the figure increases substantially with experience. The increase in salary is greatest when a CIMA member progresses from between four and nine years of experience to ten or more years. The monthly salary increases by Rs.134,648, equivalent to an 87% rise, which may be largely attributed to movement from middle management to senior management. Satisfaction with salary now seems to be on an upswing, with an increase of ten percentage points in 2011 to 68%. Members’ satisfaction with their benefits package has also improved to 70%, up from 66% in 2010. Although the proportion of members planning to move job within the next two years has remained stable since 2009, there is a clearly decreasing trend of planned emigration, which is possibly due to Sri Lanka’s rapid economic recovery, coupled with continuing difficulties elsewhere. The CIMA survey reveals a positive outlook towards the year ahead, as members expect the business environment in Sri Lanka to improve significantly over the next 12 months. A much higher proportion of members now anticipate an increase in the profitability of their employing business (53%) than anticipate a fall (14%), which in turn is down from 60% expecting a fall in profits in the 2009 survey. There is positivity on the staffing and expenditure front as well, with a substantial decline in proportions anticipating negative indicators such as budget cuts, recruitment freezes, job cuts and salary freezes. 64% of CIMA members are expecting a salary increase over the next 12 months, at an average rate of 12.5%. However, the percentage varies widely, with one-half expecting a smaller than average increase and a notable proportion anticipating a large increase of 20% or more. As business expansion continues, 39% of members are expecting their working hours to increase. The majority say this is due to taking on more responsibility/more pressure – in many cases due to a promotion or other changes in job role – while almost one-half cite company growth, which can lead to staffing constraints.

4

Economic context Overall, the past decade has been a positive period in the development of Sri Lanka’s economy in the global context, despite adverse shocks from the Indian Ocean tsunami in 2004 and the global economic crisis of 2009. The effect of the global credit crisis on the Sri Lankan economy was evident in 2009 when GDP grew by 3.8% – down significantly from 6.0% growth in 2008 – and exports fell by about 13.5%, prompting IMF assistance. However, in 2010 GDP growth rebounded strongly to 9.1% due to a recovery in net foreign direct investment. Nevertheless, with difficulties in Sri Lanka’s major Western export markets − the US, the UK, Germany and Italy − emerging and deepening, GDP growth for 2011 and 2012 is forecast to be slower at 6.9% and 6.5% respectively.1

Although the relatively high rate of unemployment among young people remains a concern, unemployment as a whole in Sri Lanka has been falling.2

The government’s current economic policy includes a ten-year development framework for large infrastructure projects to boost jobs and growth, development of the small and medium enterprises (SME) sector and further expansion of the civil service sector. At almost 60%, the service sector is the largest component of GDP; the information and communications technology (ICT), telecoms, trading, transport, and financial services sectors are the main contributors to growth.

Although near-term economic performance is expected to be positive, much will depend on the continued stability of the political situation, fiscal and budget management (particularly to reduce the public deficit) and economic recovery amongst Sri Lanka’s major Western export markets.

Main findings

Overview of remuneration packages and the career ladder The 2011 CIMA survey reveals that members in Sri Lanka are earning on average Rs.195,397 in basic monthly salary, but the figure increases substantially with experience. The increase in salary is greatest when a CIMA member progresses from between four and nine years of experience to ten or more years. The monthly salary increases by Rs.134,648, equivalent to an 87% rise, which may be largely attributed to movement from middle management to senior management.

1 IMF, World Economic Outlook, April 2011, http://www.imf.org/external/pubs/ft/weo/2011/01/index.htm, accessed October 2011. 2 UN, World Economic Report 2010 p. 123.

‘When a CIMA member progresses from four to nine years of experience to ten or more years, basic salary increases by 87%.’

5

Figure 1: Monthly remuneration by number of years’ relevant experience

Similarly, there is an 89% rise in average basic salary when a CIMA member progresses from less than 31 years of age to 31–40 years of age. In addition to salary, CIMA members receive a range of benefits, by far the most common being: • healthcare • bonus • contribution to/payment of CIMA fees • company car/allowance. 87% of members expect to receive a bonus in 2011. The average annual salary figure equates to Rs.2,344,764, rising by Rs.27,783 when annual bonuses are taken into account. At Rs.131,514, the average basic monthly salary of female CIMA members is a considerable 41% lower than that of males (Rs.221,236), which is equivalent to a difference of Rs.89,722 each month. However, at least part of the reason for this gap could be some differences in the profiles of male and female members: a greater proportion of males are over 40 years of age, with 20 or more years of post-qualification experience, and a greater proportion are also in very senior positions such as CFO or head of finance, while there are proportionately more females working as accountants and in middle management roles. While there is very little difference in average salary between members working in Sri Lankan organisations and internationally-owned businesses, remuneration does vary with the size of business. Compared to CIMA members working in SMEs, those in large organisations earn a significantly larger basic salary. Furthermore, large businesses are paying on average Rs.9,288 more per month than the Sri Lankan members’ average salary, whereas SMEs are paying Rs.14,491 less than the average.

Rs. 195,397Rs. 121,974

Rs. 154,505

Rs. 289,153

Sri Lanka total <3 years 4-9 years 10+ years

Lowest base: < 3 years (38) Base: (131)

6

Figure 2: Monthly remuneration by business size

In the previous two years, overall satisfaction with salary was stable. However, satisfaction now seems to be on an upswing, with an increase of ten percentage points in 2011: 68% are now satisfied with their salary. Members’ satisfaction with their benefits package has similarly improved in 2011: 70% are now satisfied with their benefits, up from 66% in 2010 and 65% in 2009.

Figure 3: Satisfaction with salary – trend

There is evidence that the average basic monthly Sri Lankan salary package has been rising year on year: the rise was marginal between 2009 and 2010 – from Rs.186,630 to Rs.187,832 – but steeper in 2011, climbing to Rs.195,397. In 2011, 64% of members are expecting a salary increase over the next 12 months, at an average rate of 12.5%; we can therefore reasonably expect the reported average salary package to increase once again in 2012.

Rs. 195,397 Rs. 180,906Rs. 204,685

Sri Lanka total Micro/small and medium Large

Lowest base: Micro/small/medium, (52)Base: (131)

59% 58%68%

2009 2010 2011

Base: 2009 (96), 2010 (130), 2011 (131)

7

Expectations for future pay and conditions The CIMA salary survey reveals a positive outlook towards the year ahead, as members expect the business environment in Sri Lanka to improve significantly over the next 12 months, particularly in relation to the 2009 downturn. A much higher proportion of members now anticipate an increase in the profitability of their employing business (53%) than anticipate a fall (14%), which is down from 60% expecting a fall in profits in the 2009 survey. Business expansion is anticipated, with one-third expecting more money available for future investment and a two-fold increase in the proportion expecting more outsourcing. There is positivity on the staffing and expenditure front as well, especially when compared to the 2009 survey, with a substantial decline in proportions anticipating negative indicators such as budget cuts (17%, down from 63%), recruitment freezes (15%, down from 68%), cuts in funding for staff training (9%, down from 43%), job cuts (7%, down from 27%), and salary freezes (3%, down from 51%). Compared to 39% expecting salary increases, just 1% are expecting a decline in salaries across the board in their employing business. Additionally, an increase in staff recruitment is expected by one-third and increased spend on staff training is expected by one-quarter of members. To boost organisational efficiencies, two-fifths expect business process and policy changes, and due to the sustained and continuous efforts by the government to monitor institutions – especially in the financial sector – one-quarter of members are anticipating a greater focus on regulatory issues.

8

Figure 4: Expectations for the business environment – trend

Reduced expenditure and headcount Reduced performance, increased caution

Increased expenditure on staffing Increased performance, more investment

Base: 2009 (96), 2011 (131) Note: 2009 data is not weighted by membership level. *Item not asked in 2009.

17%

15%

9%

7%

3%

1%

63%

68%

43%

27%

51%

Budget cuts

Recruitment freeze

Cuts in funding for staff training

Job cuts

Salary freezes

Salary decreases*

2011 2009

41%

25%

14%

7%

2%

1%

38%

20%

60%

36%

3%

8%

Business process/policy changes

Greater focus on regulatory issues

Fall in the overall profitability of business

Less money available for future investment

Restricted mergers/acquisitions

Less outsourcing

2011 2009

39%

36%

28%

Salary increases*

Increase in staff recruitment*

Increased spend on staff training*

2011

53%

33%

23%

14%

11%

11%

Increase in the overall profitability of business*

More money available for future investment*

Increase in outsourcing

Increased mergers/acquisitions

2011 2009

9

The optimistic outlook for the business environment is also reflected in terms of members’ own salary expectations, as 64% are expecting an increase over the next 12 months − a much greater proportion than the proportion expecting salary increases across the board in the organisation in which they work. Fewer than than one in ten are expecting a salary freeze or reduction, while 2% are facing the prospect of redundancy over the next 12 months.

Figure 5: Personal expectations for salary and job security

The average salary increase is expected to be 12.5%, although the percentage varies widely, with one-half expecting a smaller than average increase and a notable proportion anticipating a large increase of 20% or more.

64%

7%3% 2% 1%

28%

Salary increase Salary freeze Redundancy Shorter working week

Salary reduction

None of these

Base: (131)

10

Figure 6: Expectations for increase in personal salary

54% of CIMA members typically work 41 to 50 hours per week, while an additional 25% work longer hours. Although there is a tendency towards long hours, there has been some decrease in the typical working week since 2010, and one-half of members are expecting no change in their working hours over the next 12 months. However, as business expansion continues, 39% of members are expecting their working hours to increase. The majority say this is due to taking on more responsibility/more pressure – in many cases due to a promotion or other change in job role – while almost one-half cite company growth, which can lead to staffing constraints.

Figure 7: Reasons for expected increase in working hours − trend

0% 0%

7%

14%

29%

16%18%

2%

13%

Less than 1%

1% -3.9%

4% -5.9%

6% -8.9%

9% -10.9%

11% -13.9%

14% -16.9%

17% -19.9%

20% or more

Base: All those expecting a salary increase over the next 12 months (84)

Mean average increase expected: 12.5%

86%

45%

39%

34%

13%

8%

77%

54%

23%

30%

20%

16%

Taken on more responsibility/more pressure

Company growth

My role has changed

Understaffing/lack of resource

Company culture

Current financial climate

2011 2010 Base: All those expecting an increase in working hours (53)

11

Improving employability and opportunities The vast majority of members in Sri Lanka agree that the CIMA qualification enables employment internationally, creates career opportunities and enables movement across all areas of the business.

Figure 8: Attitudes towards the CIMA qualification

Indeed, 59% of members are considering alternative job opportunities within the next two years; of those, 28% are planning to seek employment abroad. This intended employment mobility could, in part, be attributed to the fact that there are visible signs of economic recovery following the 2009 downturn. Among those seeking employment overseas, English-speaking destinations are preferred, with Australia being the most popular, followed by the UK.

93%

93%

88%

Strengthens your ability to move internationally with your career

Creates career opportunities for you

Strengthens your ability to move across all areas of the business

Agree/Strongly agree

Base: (131)

12

Figure 9: Planned migration destinations

Attracting candidates and retaining employees

Although the proportion of members planning to move job within the next two years has remained stable since 2009, there is a clearly decreasing trend of planned emigration, which is possibly due to Sri Lanka’s rapid economic recovery, coupled with continuing difficulties elsewhere. Overall, it appears that economic factors are primarily driving a decline in the rate of emigration from Sri Lanka among CIMA members. As the Sri Lankan economy continues to recover and strengthen, we could see a further decline in the proportion planning to emigrate in subsequent years.

Base: All those planning to move to another country (31)

Hong Kong 17%USA 10%

UAE 19%

United Kingdom 32%

Australia 54%

New Zealand 13%South Africa 11%

Singapore 14%Malaysia 13%

Qatar 13%

13

Figure 10: Proportion planning to move job, to emigrate – trend

Seeking an improved quality of life, better employment opportunities and an improved salary continue to be the primary motivators for relocation. However, other reasons for relocation are changing with the improving economy; for example, lower proportions are now looking to migrate to a stronger economy (19% in 2011, down from 35% in 2010). With the improvement in salary satisfaction among CIMA members (68% in 2011, up from 58% in 2010), the proportions planning to migrate for a better salary or improved employment conditions have also decreased.

62%

52%

62%

42%

59%

38%

Planning to move job within 2 years Planning to move to another country

2009 2010 2011

Base: 2009 (96), 2010 (130), 2011 (131) Base: Those planning to move job within 2 years, 2009 (60), 2010 (81), 2011 (80)

14

Figure 11: Reasons for migrating – trend of top 8

CIMA members in Sri Lanka receive a range of benefits in addition to their basic salary – most commonly healthcare (79%), a bonus (72%), contribution to/payment of CIMA fees (70%) and a company car/allowance (63%). These are also the most desired benefits, and the widespread provision of those benefits most valued by members is contributing to a high level of satisfaction with benefits packages. However, the survey indicates that other financial benefits and flexible working would be welcomed as additional incentives. Membership of a company pension scheme, life assurance and travel benefits/allowances each receive fairly high ratings for importance (3.9 out of 5) but are received by comparatively few members. Flexible hours are currently only provided to one-third (31%) of members, but this benefit receives an importance rating of 3.8 out of 5, while working from home is possible for only 10% of members, but receives an importance rating of 3.5 out of 5.

60%

54%

54%

38%

38%

22%

19%

13%

56%

53%

59%

45%

35%

19%

35%

13%

68%

77%

58%

48%

42%

23%

32%

29%

Improved quality of life

Better employment opportunities

Improved salary

Experience a different culture

New career opportunity

Take time out/travel

Stronger economy

Improved employment conditions

2011 2010 2009

Base: Those planning to move to another country 2009 (31), 2010 (34), 2011 (31)

15

Figure 12: Additional benefits received versus importance

Skill sets that members wish to develop over the coming 12 months are related to managerial skills rather than technical skills – particularly leadership (57%) and strategic planning and implementation (52%) – and there has been little change since 2010.

79% 72%

70% 63%

54%

31%

24%21% 19%

16% 16% 16%13% 11% 10%

5% 4%1% 1%

4.6 4.6

4.3

4.7

3.9 3.83.6

3.9 3.9

3.5

2.8

3.0

3.9

3.33.5

3.1

3.4

2.8

2.4

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%Received Importance (mean average)

Lowest base (all answering): Sabbatical (117)

16

One word to describe...management accounting Members were asked to use one word to describe what management accounting means to them personally. The words below show the most popular responses, with the size of font denoting frequency of mention.

Figure 13: Words used to describe…management accounting

Challenging Decision-making

Strategic

All-encompassing

Professional

Essential Flexibility

Comprehensive

Business

Analysis

Information Great Management

Analytical

Dynamic Relevant

Interesting

Excellence Important

17

Appendix

Figure 14: Table of monthly salaries and annualised bonuses

Sri Lanka Base Salary

(Rs. per month) Bonus

(Rs. per annum)

Total 131 195,397 27,783

Salary tier

Lower 40 68,000 7,752

Medium 47 150,000 16,827

Higher 44 336,053 53,463

Age

< 31 years 47 111,702 12,750

31-40 years 51 202,763 32,515

41+ years 33 284,094 39,162

Gender

Male 92 221,236 32,778

Female 39 131,514 15,433

Level

Associate 111 154,685 20,757

Fellow* 20 350,000 54,463

Size of organisation

Micro/small/medium (1–249 employees) 52 180,906 23,206

Large (250+ employees) 79 204,685 30,716

Years of experience

< 1 year (newly qualified)* 11 89,091 7,711

1-3 years* 27 135,370 15,261

<3 years combined total 38 121,974 13,076

4-9 years 50 154,505 22,772

10+ years 43 289,153 43,463

Ownership

Sri Lankan 74 196,327 29,671

International 57 194,163 25,275

*Caution: Low base, under 30

18

Technical information

Survey responses were collected by CIMA among active members between 09 June and 04 July 2011, via an online survey. The data was analysed and reported by an independent specialist consultancy.

Just over 21,000 CIMA members were selected and invited to participate in the international study which covers 14 markets. Within the study period 2,367 responded internationally, including 131 from Sri Lanka.

The response data presented in this report has been weighted to reflect the profile of the CIMA membership by market. All base numbers quoted in Figures report the lowest unweighted base; i.e. the number of responses.

Further information

For further information on technical matters relating to this survey, contact yourvoice@cimaglobal.com

For further country specific analysis and reports, visit CIMA MY JOBS at

http://myjobs.cimaglobal.com

Acknowledgements

This research was conducted by CIMA in conjunction with Spotlight Market Research & Editing. The Chartered Institute of Management Accountants is a Market Research Society Company Partner. Both CIMA and Spotlight abide by the Market Research Society’s Code of Conduct and the Data Protection Act.

36

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