In this article, Muhammed Goolab, Executive Committee Member of the South African Reward Association (SARA), answers frequently asked questions about your pay:

Why do my friends get paid more than me if we do the same work
Several factors determine individual pay levels. Some industries pay more for a specific skill or may even pay a premium for skills that they place more value on.

A company’s financial performance, as well as the individual’s performance, can also contribute to different salaries for the same skill.

How do I get more cash out of my salary?
Most organisations in South Africa offer Cost to Company packages, which indicates the total direct and indirect (e.g. pension and medical aid benefits) pay that an employee receives in a year.

Cost to Company packages generally allows employees to adjust some of the benefits of their package, such as pension fund and medical aid contributions.

Lowering your contributions can lead to more cash in your pocket each month, but employees who do this often sacrifice some of the benefits that they were contributing towards.

It is important to understand the benefits that you want to receive and make sure you are making an appropriate contribution towards your retirement and healthcare each month.

Why is my salary increase less than the medical aid increase?
The drivers that determine salary increases within a business are different from the drivers behind medical aid increases.

Medical aid inflation is defined as the annual increase in claims received by medical schemes and has generally increases greater than CPI.

This is driven by the costs for medical services rising, as well as the demand from clients on medical services. 

Salary increases are driven by company performance, individual performance, union agreements, industry trends and salary market movements.

Why do I have to be on a company appointed medical aid?
Whether or not an employee must belong to a company appointed medical aid depends on the company you work for.

Companies that make medical aid compulsory for their staff are typically able to admit new members without paying late joiner penalties or being subjected to waiting periods.

Medical aid schemes would typically not grant automatic membership to new staff without underwriting them unless membership is compulsory.  

What medical aid/retirement fund should I choose?
SARA often gets asked what medical aid plan employees should select. This will differ depending on your individual needs.

Companies that offer medical aid benefits as part of their employment contracts generally have an appointed advisor within the scheme to guide employees on the most appropriate plan for their circumstances and family situations.

Speak to the advisors to make an informed decision. Similarly, retirement fund contributions will differ depending on your needs.

Discuss your retirement goals with a financial advisor to make sure you are on track to meeting your retirement goals.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, [email protected], www.atthatpoint.co.za  

For more information on SARA please visit:
Website: www.sara.co.za  
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association
 

The days of living like a king or queen off back-to-back foreign assignments are diminishing, and expatriates - or international assignees as they are now called - may receive reduced rewards in the future.

“Companies are increasingly focussed on expense management, and costly assignee lifestyles are susceptible to cuts,” warns Nicol Mullins, Chartered Reward Specialist and Executive Committee Member at the South African Reward Association (SARA).

So what can aspiring and veteran assignees expect in terms of a reward package and will it meet their needs? “It depends,” says Mullins.

Destination unknown
Whether or not an assignee’s package is sufficient will be determined by their eventual location, relative to their lifestyle expectations. The base of departure should be to place international assignees in a similar position, not better or worse off, than what they are currently in.

Those working in developed countries would likely enjoy good public transport, shopping, dining, entertainment, housing, schools, medical care and other conveniences.

But only if their remuneration makes these affordable. Conversely, assignees arriving in emerging market countries could find themselves stationed in remote areas or less-developed cities where, even if they earn well, the quality of life available to them is much lower than what they are accustomed to.

Of course, quality of life is subjective. Middle Eastern cultures may be too restrictive to many female assignees regardless of rewards, while people from sunny climates might expect better compensation to endure bitterly cold regions for extended periods.

Outcomes are pivotal
Ultimately, the worth of a foreign assignment package hinges on what the assignee and the organisation wishes to accomplish from it. Do they like experiencing other cultures or will their earnings go towards early retirement? Are they willing to “rough it” for a few years or do they expect better than what they had in return for uprooting themselves?

Mullins advises those considering international assignments to establish their goals up front and decide if the package offered will help them achieve these goals.

The first red flag is whether or not their prospective employer has an international assignment policy at all. A policy assists in providing transparency, clarity and certainty.

A comprehensive policy
For any foreign assignment to be successful, it must be mutually beneficial to both the employer and the assignee.

Companies should deal with assignees transparently and honestly from the start. They can begin by having a comprehensive policy document in place for each assignment destination, one that articulates the total rewards package, the company’s commitment and what costs it covers.

Astute assignees will ask if this policy document exists and obtain a copy to ensure it clearly lays out how their package will be structured from the moment they accept until their eventual return. This includes what they can expect after they are repatriated, such as continued employment and benefits.

Counting the cost
Then it’s up to the candidate to weigh up the total package against their desired outcomes, not just in terms of lifestyle costs, but also any perceived sacrifices they will make when entering and adapting to their new environment. They should also evaluate the impact of the stay on an accompanying partner or children.

“The business and assignee must consider that any amounts saved or earned will be nothing compared to the cost to both parties if the assignment fails,” says Mullins.

He encourages organisations to engage the services of a professional reward specialist when developing international assignment packages and policies.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, [email protected], www.atthatpoint.co.za 

For more information on SARA please visit:
Website: www.sara.co.za 
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association
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