ACCORDING to statistics compiled by a leading head-hunter, average salaries in 1999 for senior managers of multinational companies have plunged by more than 40 percent since the beginning of 1997.

Chainarong Indharameesup, the managing director of Boyden and Associates, who has conducted similar studies annually for a number of years, recently told The Nation that statistics taken in 1999 from representative samples of multinational companies operating in Thailand showed that the average total wage packets for sales managers had plunged from about Bt150,000 per month to Bt90,000.

The average salaries of accounting managers, human-resources managers and production managers have also dropped by similar percentages during the same period, he said.

Surprisingly, Chainarong said much of the decrease in total pay packets did not result from senior managers taking pay cuts.

''During the current economic crisis, multinational companies chopped management personnel who were judged to be not producing,'' he said.

These overpaid senior managers, he said, were replaced by competent new managers who were willing to accept salaries 30 to 40 percent less than that paid to those made redundant. ''Everyone now recognises that many people in pre-crisis 1997 were overpaid,'' he said.

During the heady days of double-digit growth, senior-management pay packets, he said, were often distorted because of a manpower shortage of qualified senior-management personnel.

''Everyone kept jumping to higher-paying jobs, and companies had no difficulty paying increasingly higher salaries because revenues were continually growing,'' he said.

The economic crisis, which began in mid-1997 after a fall in export growth, triggering the Thai government to enact a de-facto devaluation, forced many companies to seriously re-evaluate their senior-management pay policies.

Many cash-strapped and, more importantly, failing companies soon began offloading a plethora of previously hard-to-obtain qualified senior-management personnel.

''This new supply of qualified senior management personnel is a major reason for the unprecedented two-year plunge in average senior-management salaries,'' Chainarong said..

In addition, with many qualified senior managers beating the bushes for work and with the economy and consumer demand plunging, multinational companies no longer had to stockpile extra executives in anticipation of ever-increasing sales and workloads.

During the past two years, companies have used the economic downturn to correct employment anomalies created during Thailand's unprecedented decade-long boom.

They have corrected for excess staff, excess compensation rates and an overabundance of cash components in pay packages. ''That's the sad story of Thai management salaries,'' he said.

Chainarong, who is also a director of Krung Thai Bank, emphasised that his statistics only showed average figures. ''Companies probably still have to pay Bt150,000 if they want a top-notch sales manager,'' he said.

On a brighter note, a recent salary survey conducted on 140 multinational companies in Thailand by Hewitt Associates, Chainarong said, indicated that 84.1 percent of the companies would be giving salary increases in 1999.

Even with the 1999 Thai consumer price index expected to be at a long-time low of 0.5 percent, Chainarong expects salary increases of about 5 percent in 1999 and between 5 and 6 percent in 2000. ''Exports are still quite good, and government spending has pumped up the economy,'' he said.

At the same time, he doesn't expect that Thai senior management salary increases will increase to pre-crisis double-digit levels soon.

Another bright spot has been the demand for Thai senior-management professionals in the rest of Asia. The baht devaluation along with the plunging average senior management salary levels, Chainarong said, has made Thai senior managers' salary demands very competitive.

''It's created mobility for Thai managers. Most of my jobs now involve recruiting Thais for Singapore,'' he said.

Amid the gloom surrounding the demise of double-digit senior-management salary increases, Chainarong said that during the last half of this year some companies had been paying huge premiums to IT managers qualified to help them rectify Y2K problems.

The last IT manager Boyden placed, he said, doubled his previous salary to Bt250,000 per month and was given a company Mercedes.

''The company had left its Y2K compliance testing to the last minute and was willing to pay an industry expert double his previous salary,'' he said.

Source: The Nation