The earnings of small- and medium-sized entities (SMEs) and those who work for them are not always equivalent to the firm's size. A new survey has revealed that while financial services reported the lowest top-line income, the sector was found to be among the most generous with benefits and salaries to manager.
Overall, however, SME pay was found to be not that great.
The compensation and benefits report on SMEs in Jamaica by researchers Silverstone and Platt Research Solutions, which surveyed a total of 56 firms in the grouping between June and August 2009, found that within the sample, gross revenue or turnover ranged from a low of $1.8 million annually, to $1.8 billion.
Silverstone and Platt said the survey sample was constrained by a reluctance of firms to participate, but noted that the 56 that did was still a representative sample that numbered an estimated 360,000 in Jamaica.
Among the group, the majority of enterprises, or 43 per cent, were classified as small, with an employee count of 10 to 49 employees, and grossing between $39 million and less than $800 million per annum.
The medium-sized enterprises, defined as having a gross annual income between $800 million and less than $2 billion, accounted for 39 per cent.
highest recorded gross
The highest recorded gross annual revenue in the survey was $1.8 billion.
Micro enterprises accounted for 13 per cent of the distribution, and reported gross income of $38 million.
Five per cent of companies did not report their revenue.
The report said that within the 56 companies surveyed, the distribution firms had a combined gross annual revenue of $5.3 billion.
The financial services sector was responsible for the lowest annual revenue: $692 million.
Manufacturing firms reported gross annual revenue of $1.469 billion, while that of the services sector was reported at $3.665 billion.
Worker remuneration, however, was not as impressive. According to the survey, movements in salary increases fell consistently below inflation rates over the period 2005 to 2009, with the exception of 2006.
Inflation rates peaked at 16.7 per cent in 2007 and 2008, with the average recorded salary increase for both years being 10 per cent.
The researchers said the trend remained the same into 2009.
Among managers, lowest recorded earnings was an assistant customer service manager earning $480,000 annually, with the highest being $6.2 million paid to a medical doctor in the services sector.
Within this managerial category, the financial-services sector appears to compensate the workers best across the board. In this sector, the lowest-paid manager was an administrator paid $850,000 annually, with the highest being a financial director paid $4.9 million annually.
$3 million annually
The financial-services sector included entities offering micro-finance, management consultancy, accounting and auditing. Credit unions and providers of general insurance were grouped under this industry heading as well.
Among non-managerial workers, the lowest paid was a sales representative in the distributions sector earning $180,000 annually, and the highest, a sales supervisor in the same industry, earning $3 million annually.
The highest paid overall in the non-managerial category was a major sales account executive, earning $4.4 million annually.
Within the non-managerial category, the best-paying sector across the board was manufacturing with the lowest-paid worker being a casual labourer earning $480,000, and a technical representative earning $2.4 million.
Total vacation leave given ranged from two to 13 weeks per annum, and was dependent on employee tenure, position and rank.
The finance sector was the most likely to offer benefits, including leave.
Feedback on the study from organisations representing SMEs was that the financial sector was always better paid because of the requirements of the jobs.
"For sectors which demand educated workers, the pay is more likely to be in line with larger companies, and those which require less technical skills pay less," said Dorothy Gordon-Smith, president of the Women Business Owners.
Dalma James, new president of the Small Business Association of Jamaica (SBAJ), commenting on the failure of salaries in the sector to keep pace with inflation, said the trend probably held true for the wider economy.
wide salary bands
"I would be very surprised if this does not hold for the whole economy. As the economy fails to grow, profitability declines, and the ability to increase wages and salaries is limited," James said.
He added, however, that salary bands in the report for both managerial and non-managerial staff were surprisingly wide, attributing the variations to the definition of SME used by Silverstone and Platt.
"They use the European Union definition, which I am sure would include over 90 per cent of the entities in Jamaica," said James.
"I do not think that this gives us enough information about the Jamaican small businesses."
Edward Chin Mook, CEO of Global Ink, a small company, said that the Silverstone and Platt survey was a good effort, "highlighting the spreads which exist and comparing them to local and international economic indicators".
consistent with trends
Chin Mook is also immediate past president of the SBAJ.
"The sample set of 56 companies, though small when compared to the estimated 360,000 MSMEs, seems to have captured the salary ranges which are typical and reflective of the sector and consistent with remuneration trends," he said.
Participating enterprises in the survey reported over 2,700 employees, with a female composition of 60 per cent. More than 85 per cent of participating companies were not unionised.
avia.collinder@gleanerjm.com