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Executives work on open contracts

Business
More than half of local executives have open contracts without time limits as organisations prefer the arrangement as it offers job security, a new report has shown.

More than half of local executives have open contracts without time limits as organisations prefer the arrangement as it offers job security, a new report has shown.

BY BUSINESS REPORTER

In a latest survey, Executive Employment Contract Survey 2015, the Industrial Psychology Consultants (IPC) said 51,4% of executives were on open contracts without limit of time.

“Most companies are not moving to fixed term contracts for reasons such as; fears of violation of labour laws, executives are on open contracts without limits to enable job security to executives and others are still on consideration,” IPC said.

The survey showed that 67% of executives in the mining sector and 83% of executives in financial services were on open contracts.

IPC said the results showed that some organisations were offering fixed-term contracts of three years to motivate their executives to perform.

“On termination of the fixed-term contracts, most organisations offer pre-agreed gratuities. For those executives that may need to renew their contracts, most organisations offer a three-month notice except for those in medicine and pharmaceuticals,” it said.

When asked why they were not moving to fixed-term contracts, respondents told IPC that individuals occupying positions had been with the organisation for a long time and performance levels were good.

They said companies would move to fixed-term contracts on the departure of the current executives. Some organisations told IPC absence of term limits was offering job security to employees, keeping them engaged and productive.

IPC was told that it was proving difficult to change contracts with managers as they wanted to be given packages and then move to fixed-term contracts.

A number of organisation told IPC that they were negotiating for the termination of current contracts before they could re-engage executives on fixed-term contracts.

Participants in the survey were drawn from 15 economic sectors.