Eskom’s average annual salary per employee decreased from R775,000 to R735,000 between March 2020 and March 2021, but it remains a major weakness for the state-owned power utility.
This is according to the head of listed credit at Futuregrowth Asset Management, Sithembiso Garane.
The average salary at Eskom came down over the past year because of the 4.5% reduction in headcount from 44,772 to 42,749.
“This is expected to be dampened by the 7% wage increase settlement over the next three years,” Garane said.
He said that Eskom’s employee costs remain its Achilles heel as it grapples with its cost base.
“A 42,000 headcount is still a far cry from the 35,000 optimal level as noted by management,” said Garane.
“The total employee cost accounts for 16.35% of Eskom’s revenue.”
In its annual financial results for the year ended 31 March 2021, Eskom stated that it aims to reduce its headcount to 40,263 employees by 2026.
The National Union of Mineworkers (NUM) said in May that Eskom’s claim that it pays an average annual salary of R737,000 is misleading, BusinessTech reported.
“This amount is not a true reflection of the situation in Eskom,” the union said at the time.
“Eskom is divided into a bargaining unit (T4 to T13) and the non-bargaining unit (T14 to Executives),” NUM stated.
NUM explained that it and other trade unions in Eskom bargain on behalf of employees on the T4 to T13 salary levels.
NUM said that the highest amount that a bargaining unit employee can earn is R650,460, while the lowest salary is R174,180.
“Eskom is intentionally misleading the public to gain public sympathy,” said NUM.
“We have noticed this thread of misleading information from Eskom. This is a clear sign of negotiating in bad faith,” the union stated.
NUM concluded that if the average salary is at R737,000, that means non-bargaining unit employees are earning a lot of money, which pushes the average up.