Factors Affecting Salaries

EghtesadOnline: A report on salary ranges for different jobs at several position levels in Iran published by Iran Talent, a leading online job site in Iran, has identified factors affecting pay rates in the Iranian job market in the last fiscal year (March 2016-17). The report is based on surveys collected from companies with over 100 personnel.

News ID: ۷۴۲۸۶۶

19 July 2017

In practice, one of the most important factors affecting pay rates for different employees is the level of management and supervision they have over others’ performances based on which job positions are categorized into three organizational levels in this report: low-level positions for those who do not have supervision authority, mid-level positions that supervise employees with low-level positions and executive-level positions for those who have supervision over mid-level positions.

Based on data gathered from 54,798 full-time employees throughout the country, 29,877 in Tehran and 24,921 in other provinces, the report shows that the average monthly pay rate for low-, mid- and executive-level positions in the capital stood at 22 million rials ($582), 31 million rials ($820), and 45 million rials ($1,191) respectively during the period under review.

The figures reveal that in Tehran, executive-level positions are paid 45% higher than mid-level ones and mid-level positions receive 36% more than employees with low-level job positions. This is while in other provinces, the pay gap is narrower in that the differential between executive and mid-level positions is 25%, and 33% between mid-level and low-level ones. Low-level positions had the largest share in the statistical population with 55%, followed by mid-level positions with 32% and executive-level positions with 13%, according to Financial Tribune.

The salary range is determined by market pay rates established for people doing similar work in similar industries in the same region. Pay rates and salary ranges are affected by many written and unwritten rules and factors in a particular society, region, and/or company.

In some companies, level of education and experience are priorities, while for others level of knowledge and skills are determining factors. The fair determination of salary ranges for each job has always been of high importance for employers, employees and job seekers alike.

Location Factor

The location of work is a major factor as regards pay rate and salary range. The results of the report show employees in only three provinces in Iran have higher salaries compared to those working in Tehran.

On average, employees in Bushehr Province are paid 39% higher, while those in Hormozgan Province and Khuzestan Province receive 21% and 5% higher salaries respectively compared to those working in the capital city. In other provinces, pay rates are 23% lower on average compared to those in Tehran.

More specifically, executive-level positions in provinces other than Bushehr, Hormozgan and Khuzestan have 32% lower pay rates than those in Tehran, with mid- and low-level positions also paying a 21% and 19% lower pay in comparison, respectively.

As in many countries, place of work and place of residence are not always necessarily the same for all employees. Many people might go to other cities for work on a daily, monthly, or yearly basis depending on the nature of their work.

Analysis shows Bushehr Province has the highest number of non-native employees (those whose place of work and residence differ) as some 71% of all employees in this province are non-native. Chaharmahal-Bakhtiari and Hormozgan are ranked second and third in this regard with non-native employees constituting 40% and 38% of all employees there respectively. On the other hand, the top three provinces with the lowest share of non-native employees include Khorasan Razavi (10%), Qom (10%) and Tehran (12%).

Statistics suggest that native employees in Tehran have 9% higher salaries on average compared with those who periodically come to the capital city for work. However, the case is the reverse in other provinces. Native employees’ salaries in other provinces are 14% lower than non-natives.

Business Activity Factor

The type of business activities also plays a role in determining pay rates.

The analysis of data collected from 27,395 full-time employees in Tehran reveals that commercial companies offer higher salaries than production and services companies on average to all the three job categories.

Stats indicate that low-level employees receive the highest salary in investment, financial and exchange companies among other types of companies with an average monthly income of 28 million rials ($741). Banks pay mid-level employees more than other companies with an average monthly pay of 44 million rials ($1,164), while people with executive job positions receive better pay in oil, gas and petrochemical companies with an average monthly salary of 69 million rials ($1,826).

Companies can also fall under international, public and private categories. Not surprisingly, international companies are the highest-paying companies in Tehran for all kinds of employees compared to domestic private or public companies.

Based on a statistical population of 26,578 full-time Tehran-based employees, international companies pay a monthly average salary of 87 million rials ($2,303), 47 million rials ($1,244) and 30 million rials ($794) to executive-, mid-, and low-level employees respectively.

Size Factor

Another key factor in determining the pay rates is the size of a company. According to the report, large companies (with over 100 personnel) offer more money than small companies (with less 100 personnel). The pay difference for executive-level employees is 31%, whereas it is 25% and 26% for mid- and low-level ones respectively.

Men Vs. Women

Today, one of the most-debated topics regarding job positions in companies revolves around employment of women and gender diversity.

The study shows that more women are working in private companies than in international or public companies in Tehran. Some 32% of the private companies’ staff are women, while the women’s share in international and public companies are 29% and 20% respectively.

Women have the highest involvement in office work/secretary positions, having a 60% share. Translation and art/design-related positions are also among the most common jobs for women, as they fill 54% and 50% of the positions in these areas respectively. On the other hand, women take the lowest number of positions regarding factory/construction/oil-site/power station management, production and operation, installation/launch/execution.

The report shows that some 18% of employees with over 15 years of work experience were women during the period under review. Women had a 40% share in the number of employees who had entered the job market during the three years to the fiscal 2016-17.

In general, women receive lower pay than men. The pay gap is more noticeable in executive-level positions, as men are paid 50% higher. This is while for mid- and low-level positions men receive 21% higher salaries compared to women.