"South African businesses that have already planned their pay increases for 2022 have some tough decisions ahead of them," warns Yolanda Sedlmaier, Chartered Reward Specialist and Exco member at the South African Reward Association.

This is due to rocketing inflation, fuelled by global economic turbulence and local conditions, which is only expected to worsen over the rest of the year.

Employees faced with the escalating cost of living may be underwhelmed and demotivated by increases falling well below their needs. Unfortunately, this can negatively affect their productivity as well as that of their company. 

A rough road ahead
South African employers determine their pay increase targets several months before those increases are due to be implemented.

The targets are typically based on various factors, including the prevalent economic outlook for the coming year at that time. Once set, sudden changes to the forecast factors are very difficult to accommodate due to the time needed to rework the plans and the financial provisions supporting their adoption.

"The process is the definition of a big ship turning slowly and 2022 is shaping up to be just that kind of situation," says Sedlmaier.

According to recent figures from Statistics South Africa, the country's current annual inflation is 5.9 percent, mainly due to higher food and fuel prices. This is compared to 4.5 percent in 2021. In addition, credit rating firm Moody's has projected that local inflation could reach as high as 8 percent by the end of the year, a figure the US economy has already reached.

To offset inflation, the South African Reserve Bank (SARB) has announced an increase to the interest rate of 50 basis points, following three consecutive rises of 25bps each. The SARB also noted that economic growth had been adjusted from 2 percent down to 1.7 percent due to several short-term factors, including flooding in Kwa-Zulu Natal and ongoing electricity supply constraints.

The sudden onset of Russia's war with Ukraine and the conflict's immediate impact on the global economy is also a significant factor. This while businesses are still fighting back from the effects of the COVID-19 pandemic throughout 2020 and 2021.

Lastly, economists report that while the outlook for a global recession was 25 percent at the beginning of the year, this outlook has increased to 50 percent. Others have suggested that such a recession may be mild compared to previous declines, like the 2008 financial crisis.

"Either way, employers need to be ready for anything," says Sedlmaier.

To revise or not to revise
The effects of inflation on worker attitudes can already be witnessed as unions, demanding increases of 7, 10 and even up to 15 percent, are prepared to go on strike against employers offering 6 percent. 

As a result, will companies be forced to implement interim mini-raises to offset the unforeseen inflationary conditions or even bite the bullet and revise their plans altogether? Can they implement better cost-saving initiatives, such as more work-from-home allowances, to alleviate the burden on workers? 

"There's no easy answer to the million-dollar question they face and employers will have to dig deep to develop effective reward strategies," says Sedlmaier.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, rosa-mari@atthatpoint.co.za, 060 995 6277, 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

Dr Mark Bussin, EXCO member of the South African Reward Association (SARA), says that powerful international trends are changing the governance and remuneration landscape significantly.

“These trends are ushering in a profound shift in how we think about governance and remuneration, and smart boards and executive teams need to understand their implications,” he says. “Many of them are developing trends, so companies will need to keep their eye on the ball, and develop flexible strategies to respond to a shifting set of variables.”

Dr Bussin says that while there are multiple trends, the following are the most important as they represent key directional shifts:

Institutions and regulators flex their muscles
Underlying many of these trends is the indisputable fact that both institutional investors and regulators are getting much more specific about what they want from companies in which they are invested. In particular, advisors like Lewis Glass and Institutional Shareholder Services are gaining more influence as they provide advice to large clients, and their agendas are thus gaining traction. Key agenda items include ESG and human capital measurement.

ESG becomes a board matter
Environment, social and governance (ESG) reporting has become mandatory globally. “The move to include non-financial metrics is positive, as it supplements traditional backward-looking and quantitative financial metrics with a new set that are essentially forward looking and qualitative,” he argues. “However, measurement is much more difficult and there’s no real objective way of doing it yet.”

Human capital reporting grows up
Another move to a more qualitative approach sees traditional reporting based on figures relating to gender and race being complemented by a deeper look at how the company is managing its talent. “We’re looking beyond numbers-based affirmative action to consider things like dignity, respect and, above all, inclusivity,” Dr Bussin says.

Pressure to simplify remuneration
Variable remuneration frameworks designed to drive performance have become so complex that that it has become virtually impossible to establish what anyone really earns, and so benchmarking cannot be done.

Focus on the vertical and horizontal pay gap continues to grow
The vertical pay gap—the CEO’s salary compared to that of the lowest paid worker—seems less and less useful as a measure. The top jobs are becoming more and more complex, and so attracting higher wages, while the lowest remain static. “The vertical pay gap will continue to widen and, in any event, redistributing the CEO’s salary to workers would make absolutely no impact,” says Dr Bussin. “For that reason, companies are moving towards paying a living wage (rather a minimum wage) to all employees as a way to make a real impact on people’s lives.”

The horizontal pay gap—also known as the gender pay gap—remains a highly controversial issue. The global average is in the region of 25% whereas in South Africa it falls into the 10%-20% range. While the issue is not as clear cut as it might seem—other factors such as genuine parity of the work done and differing work/life priorities play a role—this is something that is receiving more focus.

Work-from-anywhere trend raises significant issues
Remote working has been growing in popularity over the past decade or so, strengthened by the recent lockdowns. On the governance side, this work style will demand a move from input-based to outcome-based performance management. Getting this right will surely only be a matter of time, but the tax question is more vexing: to whom would a consultant living in country A and working for multiple clients in various other jurisdictions pay tax? No firm answer to this question exists as yet.

A related issue is the growing number of contractors, freelancers, part-timers and consultants: what kind and level of benefits are they entitled to receive? If the answer is none, then should they not be paid a premium?

ENDS
 
MEDIA CONTACT: Rosa-Mari Le Roux, rosa-mari@atthatpoint.co.za, 060 995 6277, 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

Apart from the where, when and how of employee performance management, not much has changed since the emergence of COVID-19. This is according to Lindiwe Sebesho, Master Reward Specialist and Executive Committee Member at the South African Reward Association (SARA).

"This is because the key principles in performance management remain relevant in measuring and improving employee contribution to business performance or growth," she says.

Performance philosophy
Many organisations have become a mix of full time on-premises, fixed-hour staff and work-from-home (WFH) employees with flexible hours. So whilst how their performance is set, monitored and evaluated may be more complex, the need to manage performance remains key for business success. Leveraging technology, most employers are optimising various digital platforms that enable real-time, simple-to-use processes to ease the management of performance across the expanded enterprise.

However, performance management principles remain focused on the need to set clear performance objectives and on holding ongoing feedback and feed-forward conversations between employers, workers and teams to optimise their contribution to delivering on corporate strategy.

Therefore this process still aims to foster a continuous improvement ethic that focused individuals and teams on activities that drive business growth. Its outcomes are largely still ratings based and are used to inform fair, business-aligned skills development, reward and talent decisions such as succession planning.

Key principles
Organisations still need to clearly communicate their purpose, growth goals, ambition and strategy within a well-defined business context.

Next, they must align employee efforts through personal, team, financial and non-financial objectives and key results (OKRs) that capture essential outcomes.

As staff execute their duties, regular check-in conversations and real-time feedback enable development and continuous improvement of performance.

Further, regular feedback and ratings should be administered, leading to formal annual evaluations that use an established rating scale linked to desired standards of contribution.

These rating outcomes are then used as input for making reward and other talent-related decisions.

"Whatever the circumstances, business must not become distracted from this proven approach to performance management even where different working arrangements have been adopted," says Sebesho.

Underperformance
With the country's economic downturn, organisations are eager to maximise resource output wherever possible. Accordingly there is a more concerted effort towards the proactive management of underperformance among staff.

"While managers may have let underperformance slide in the past, they are now more focused On ensuring that every worker contributes to growth consistently," says Sebesho.

As part of managing under-performance, it is key to understand the factors that negatively impact employee performance.

The first is a lack of skills that could result from an ineffective education system and/or limited investment by employers in training and development. Assigning employees to roles that do not fit their competencies can also hamper optimal performance. Organisations that invest in skilling up workers and ensure employees are equal to their responsibilities can overcome this hurdle.

The second is low employee morale and engagement, which can be caused by anything from the threat of retrenchments to rewards that do not align with worker values. The best solution is for management to establish a culture of open communication and engage with staff to determine the causes of poor morale. A show of concern alone can help reignite employee interest, although employers must follow through with solutions to maintain trust.

Even workers with good morale may suffer from the third factor, a lack of motivation. This can be caused by societal conditions, such as social unrest or political instability, leading to personal problems, like poor mental or physical health. Employers can offset these obstacles with a comprehensive employee value proposition, additional mental and physical wellness support, and positive reinforcement through recognition of desired behaviours.

Finally, a lack of resources may prevent employees from producing their best work. Low national economic growth, employer budget cuts or inadequate infrastructure, like transport and telecoms, can rob them of opportunities to work effectively. Employers should consider budgeting for critical resources that enable better productivity, and provide alternative working arrangements, like flexible hours or work-from-home solutions where the nature of jobs allow for such.  They also need to provide technical and digital skills support where required.

Enhanced performance
In summary, WFH and hybrid models necessitated by the pandemic have created greater flexibility in the where, how and when of employee performance but have not necessarily changed the core principles of performance management which remain largely the same and employers must apply them consistently for the best results.

Employers should therefore leverage technology to develop simple, real-time processes that enable performance management across expanded enterprise boundaries and maximise their people resources by minimising underperformance.

"By acknowledging these trends, employers can maximise their workforce's performance and pursue their full growth potential despite the various operational challenges they face" says Sebesho.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, rosa-mari@atthatpoint.co.za, 060 995 6277, 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 litany of serious governance failures laid bare in the published elements of the Zondo Report is a wake-up for South Africa, and remuneration issues are at the heart of the problem—and it’s solution, argues Dr Mark Bussin, Executive Committee Member of the South African Reward Association (SARA).

“In many instances, inappropriate remuneration is the coalface of corruption and incompetence in our state-owned enterprises (SOEs) because, after all, it boils down to money,” he says.

“If we sort out remuneration, we are half way to putting our SOEs back on the path for growth, with tremendous knock-on benefits for the economy as a whole.”

A major contributor to the problem comes from the way in which Ministers often appoint CEOs directly. Best practice as recommended in King IV’s Supplement on SOEs advises that Ministers only appoint CEOs from a shortlist compiled by the board.

Bypassing the board reduces it—and its committees, including the remuneration committee—to a mere rubber stamp. A CEO that is appointed directly by the Minister is in a position to instruct the remuneration committee to approve unjustified and excessive pay hikes and bonuses as has been done in numerous SOEs.

Another key issue that emerges from the Zondo Reports is the negative impact of cadre deployment. With political connections counting more than competence or ethics in many of these deployments, many remuneration-committee members are incompetent even if they are not actively corrupt.

This means they cannot properly interrogate remuneration benchmark studies and ask the right kind of searching questions.

“In fact, these incompetent but politically connected individuals can easily be led to a foregone conclusion,” he says.
Dr Bussin believes that too many board members rely on their emoluments from a single board, inclining them to adopting a passive role when it comes to controversial issues, such as the perennially vexed question of executive pay.
To preserve their independence, non-executive directors should not be allowed to earn more than 20% of their income from one company, he says.

“The real culprit here is cadre deployment which simply loads overheads onto companies for scant benefit. One way to attack this problem would be simply to do away with individual SOE remuneration committees, and institute a central one under the auspices of National Treasury,” he says.

A similar approach was evident in President Ramaphosa’s 2022 State of the Nation, which indicated that moves were afoot to implement a centralised shareholder model for SOEs to improve governance. Many commentators pointed out that in essence the plan suggests that the only way to bring the sector under control is to impose governance from above.

A centralised remuneration committee would immediately eliminate the need for hundreds of expensive board posts—a quick win for cash-strapped SOEs.

“More important still, this approach would re-establish the link between remuneration and executive performance and value delivered to the company. It would also make being a deployed cadre much less attractive to incompetent and corrupt individuals,” Dr Bussin concludes.

“Centralising remuneration could be accomplished easily and the payoffs would be large and immediate.”

ENDS
 
MEDIA CONTACT: Rosa-Mari Le Roux, rosa-mari@atthatpoint.co.za, 060 995 6277, 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

Moving from remuneration to employee experience
"In today's competitive job market, organisations that wish to attract, retain and motivate the best employees, need to incorporate employee experience management into traditional remuneration," says Muhammed Goolab, Senior Reward Specialist and exco member at the South African Reward Association (SARA).

A new perspective
While traditional remuneration packages will continue to be the foundation for attracting critical talent, modern job seekers are looking for more than money and standard benefits. In addition, they want purpose, support and fulfilment in their work.

This has been particularly important for millennials who value flexibility, life experiences and freedom to act. They are also a generation with strong social awareness and the image that organisations project both internally and externally is especially important to them.

This trend requires that employers change the way they think about rewards. Instead of hiring against what talent their business operations need to keep running, they should start focusing on the people who drive those processes forward.

"If you take care of your people, they will take care of your company," says Goolab.

What is employee experience management?
Employee experience management (EXM) is about creating a good first and lasting impression from the time a prospective hire reads your job ad, during the recruitment process, throughout their onboarding and journey with your company, and right up to the day they leave.

That's because, these days, even your farewell process is open to scrutiny on social media, where word of poor employment practises gets around quickly.

EXM is not only concerned with employee wellbeing and workplace comforts but embraces a holistic, multifaceted approach to overall employee satisfaction, forming a more complete total reward offering.

This can include employees identifying positively with your brand, recognition of their achievements, whether or not you use the latest technologies and your level of innovation, your societal values, the company's leadership, work-life balance and flexible working arrangements, skills development and career progression, and more.

"In a post pandemic world, it will be important for employee experiences to translate well and cohesively outside of the physical office and into work-from-home and other flexible arrangements," says Goolab.

Why EXM?
EXM is part of the larger experience management (XM) function within modern companies, which includes employee experience, customer experience, product experience and brand experience. In bigger organisations, XM is led by the Chief Experience Officer (CXO).

Research shows that employees who enjoy good experiences at work contribute positively to a better customer experience, resulting in increased revenues and an improved financial position for their employers.

So while EXM is a concerted effort to better attract, retain and motivate skilled employees, it holds proven strategic benefits for companies that implement it.

Rather than a rigid checklist of to-dos, EXM is a dynamic management function akin to internal marketing or PR, aimed at convincing staff they chose the right employer. At the same time, it must develop real experiences that workers truly value, so frequent employee engagement is a must.

"Employers can no longer simply outbid each other because the currency of a new generation of employees is values they can relate to and respect for their needs as human beings," says Goolab.

EXM and reward professionals
Whether an organisation has an EXM function or not, its reward professionals will inevitably be involved in or responsible for employee experience development.

"Reward practitioners are ideally positioned to help employers craft a strong employee value proposition that expresses worker expectations as well-defined and meaningful experiences," says Goolab.

Enterprises that adopt this new approach to reward will have a competitive advantage over employers who continue to focus on redundant ideas about what employees really want from their jobs.

ENDS

 
MEDIA CONTACT: Rosa-Mari, 060 995 6277, rosa-mari@thatpoint.co.za, 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

At the recently held 2021 Reward Awards ceremony hosted by the South African Reward Association (SARA), Openserve won the Reward Project of the Year award while ABSA won the Remuneration Report award for the second consecutive year. 

Morag Phillips won the prestigious President’s Award. 

The annual rewards celebrate the companies and professionals who design total reward solutions that attract, retain, motivate, and engage employees in a way that makes a difference to their organisations.

Reward Project Award
The 2021 SARA Reward Project award recognised the team from Openserve for their Heroes Employee Recognition Project. The project recognises employees that go beyond the call of duty in providing excellent service to Openserve customers.

The process is employee-driven and administered via the Openserve Heroes portal, where individual employees are nominated weekly. Due to the basic setup of the portal, no management intervention is required, and there is little to no overhead in administering the system. Weekly and monthly winners receive a personal call from an Openserve Exco member congratulating them on their Hero status.

The annual process culminates in a virtual breakfast with the Exco and the monthly Hero winners. In the first cycle, the CEO announced a surprise gift of a weekend away with partners for all the monthly winners. There has been a healthy adoption rate among employees and key indirect business performance metrics all show pleasing improvements.

The other placed nominees of the 2021 SARA Reward Project of the Year award were Mr Price Group in second place for their Flexible Retirement Benefits implementation project, and Bridgestone South Africa for their Total Cost to Company migration project.

Remuneration Report Award
The winner of the 2021 SARA Remuneration Report of the Year award is ABSA. Goldfields received 2nd Place and Anglo American Platinum Limited received 3rd place for their submissions. 

This award recognises organisations for the alignment of their remuneration reporting and disclosure, against the key principles of the King IVTM governance guidelines which exemplify fair, responsible and transparent policy and practice.  Submissions were evaluated by a panel of independent and expert judges across all spheres of stakeholders. 

President’s Award
A special President's Award that honours outstanding achievement in the field of total reward was awarded to Morag Phillips from 21st Century.

Morag has served the South Africa Reward Association over an extended period. She continues to contribute to the value that the association creates for its members by chairing the Thought Leadership Committee, and previously the Conference committee and also makes herself available as a Mentor on the Mentorship programme.

She has written many articles and spoken at numerous conferences on HR and Reward matters and is viewed as an industry specialist and leader in her field.

Morag is an integral part of the leadership team that ensures SARA continuously innovates value adding services to members. Morag’s inner strength, inputs, and research have enabled the SARA Exco to optimise the diversity of its members.

The association is honoured to acknowledge Morag’s invaluable contribution to the profession, our community, country, and continent at large.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, 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

Since the pandemic began, Work-From-Home (WFH) has been lauded as the new working model for many occupations.
​
Now, with vaccination efforts ramping up, some employers are eager to get their staff back to the office.

“Organisations need to plan and execute that migration sensibly and with sensitivity to keep productivity high,” says Muhammed Goolab, Exco member at the South African Reward Association (SARA).

He offers the following advice on key considerations they should be aware of.

Unique business needs
Unique driving forces may require employees to resume their duties on premises. Certain types of teams are simply more productive working together than remotely. Some management structures and styles are not easily adapted for digital collaboration, or managers perceive a loss of control under a WFH model.

It can also be more difficult to onboard new employees or impart essential skills to junior staff at a distance.

Remote employees themselves could feel disconnected from the organisation and isolated from their peers. A lack of personal connection can weigh heavily on their mental health, well-being and productivity. “This is especially concerning when the customer experience is impacted by demotivated frontline staff,” says Goolab.

Hybrid working models
Although circumstances may require a return to work, employers will likely favour a hybrid model. A mix of on-site and WFH employees can increase productivity and offer flexibility that promotes employees’ overall well-being. While remote workers enjoy lower work-related expenses, like travel, employers can also scale back on office space, equipment, canteen and other costs.

“Conversely, tensions need to be managed as on-premises workers may perceive their remote counterparts as less productive but receiving better benefits, and therefore unfairly remunerated,” warns Goolab.

Culture shock
For some employees, long-term WFH has become an entrenched work culture in their daily lives and a sudden return to the workplace could prove disruptive. Others are only too happy to get back to a professional environment free from distractions.

“Employers can leverage these contrasting attitudes to map out a planned and gradual return that welcomes affected workers back a few days more each week or month to ease their transition to full-time attendance,” says Goolab.

WFH as a reward
Before getting all hands back on deck, organisations should review WFH as a benefit that can attract and retain in-demand talent. Employees with sought-after qualifications and skills, and who value greater flexibility, will be drawn to employers that afford them more freedom, trusting them to manage their workload responsibly.

“Employers can also attract talent from a much wider and more diverse talent pool than they could if requiring staff to be at the workplace,” says Goolab.

ENDS


MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, 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 Draft Companies Amendment Bill (the Bill), 2021, has been published by the Minister of Trade, Industry and Competition for public comment.

“One objective of the Bill is to make it easier to do business in South Africa, but its onerous remuneration disclosure requirements could turn foreign companies away,” says Laurence Grubb, Master Reward Specialist and executive committee member at the South African Reward Association (SARA).

While the Association endorses fair remuneration practices, especially at the executive level, Grubb questions the timing and rationale of the proposed amendments.

What is fair?
The reasoning behind the proposed changes to the Bill is that they will help tackle the perceived injustice of excessive pay that has contributed to the country’s inequality.

Yet, the Bill offers no indication of what is meant by “excessive”, and the use of the word in the introduction is emotive and creates the impression that this is a widespread common problem.  Excessive is not defined, is a subjective term and therefore it is difficult to know what excessive pay is and who is paid excessively.

Shareholder empowerment
The one positive aspect of the Bill is that rather than using laws to cap executive pay, it advocates increased disclosure and the response of shareholders.

Public companies and SOEs will be compelled to publish details of the gap between the top 5 percent highest-paid and bottom 5 percent lowest-paid employees. This is contrary to previous proposals to use the Palma ratio, i.e. the top 10 percent versus the bottom 40 percent, which is statistically considered to be a more reliable measure.

These figures will be exposed to shareholders when they vote for or against the executive remuneration policy and implementation report at the organisation’s AGM. Without a 50 percent approval on these votes, proposed to be ordinary and binding resolutions, neither can be implemented.

Moreover, if the policy is not approved and cannot be implemented, this means a delay until approval is obtained from the shareholders. Who is to be held to account if an excellent CEO leaves because the share scheme was not approved and hence no shares can be awarded?

The implications for a ‘no’ vote on the implementation report are even more onerous. The entire remuneration committee (Remco) must step down. Does this mean from the Remco or the Board? The shareholders do not vote on the Remco appointments. Rather, the Board appoints the Remco members.

Nothing is said about what must happen next. Does the company continue until the next AGM without a Remco? Can the removed members be re-elected? Must the Board appoint a new Remco from its remaining members? What happens if the Chair of the Board is a member of the Remco – when the Remo steps down it not only leaves the Board without a Chairman but also leaves other Committees without members which may cause problems in terms of being quorate.

The implications for shareholders may scare them from voting against either resolution because of the consequences. Either way, it makes for uncertain, dangerous, high risk resolutions which may make companies wary of proposing changes and certainly cannot be seen as investor friendly.

Consequences
The effect of these and other disclosure requirements set forth in the Bill may dissuade foreign companies from investing or remaining on our shores and cause local businesses to seek alternative measures.

“The government needs to realise that companies are not compelled to do business in South Africa,” warns Grubb.

Rather, they may choose to relocate their head offices abroad where their executives are not affected by the new legislation. They may also reduce or outsource their lowest-earning staff to shrink the pay gap. Worse, they could simply seek out more favourable regions where it really is easier to do business and bypass South Africa altogether.

“The real tragedy is that the greatest inequality is the gap between the country’s employed and unemployed, so we need to focus on improved education and job creation instead of witch-hunting that will ultimately harm the economy,” concludes Grubb.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, 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 underlying causes and current barriers of the gender pay gap are often misunderstood, says Dr Mark Bussin, Master Reward Specialist and Executive Committee Member of the South African Reward Association (SARA). With Women’s Day coming up, it is appropriate to point out that the gender pay gap in South Africa has been between 15 – 18% for many years and while South African legislation and company policies have been put in place to address the issue, the statistics aren’t changing speedily enough.

“Section 6 of South Africa’s Employment Equity Act was implemented several years ago and it stipulates that companies may not discriminate in terms of remuneration; they are legally obliged to offer equal pay for work of equal value. In America and Canada, similar legislation has been around since the 1960s, but the gender pay gap in these countries still exists. Legislation isn’t solving the problem and this isn’t a uniquely South African problem,” says Bussin.

Many companies have openly stated their commitment to gender pay equality and regularly review whether they are paying equally for equal work, but this isn’t having an effect on the gender pay gap either.

Legislation isn’t Bridging the Gender Pay Pap
“The only thing that has changed is a heightened awareness of gender pay discrimination. Company remuneration policies and legislation has been around for years, and it isn’t bridging the gender pay gap. A major underlying cause is the power of prejudice,” says Bussin.

Bussin says that many prejudices exist about women in the workplace. Companies have down-sized, right-sized and are leaner than ever before, but leading recruiters and HR professionals tend to be even more wary about hiring or promoting a female candidate. Maternity leave, time spent away from work to care for children, or the possibility of a new mom deciding to not return to the workforce after childbirth, are still scenarios that are ingrained in the minds of people in power positions. This has given rise to a new term I call the “mommy gap”. Women may never catch up to men once they have had a child – the gap stays with them in perpetuity.

“Unfair assumptions and scenarios such as these still count against women. Whether recruiters, HR managers and directors are open about their prejudices or not, these prejudices still exist in the back of their minds,” says Bussin.

Questioning and Negotiation
Adding to the challenge is that women are less likely to question the salaries that they are offered and less likely to negotiate better pay.

“Recruiters and HR managers may subconsciously assume that they can pay a woman less because she might have a partner that helps support her and her household. Women, in turn, are part of the problem because they trust that the remuneration that they are being offered is fair, when they should actually be researching market related salaries as well as the company’s pay scale, and be advocating for fairer pay,” says Bussin.

Bussin says that company directors should be concerned about the gender pay gap for a number of reasons. Not only can discriminatory pay be damaging to their brand, but it can negatively impact their businesses in a number of ways.

“If a case about gender pay discrimination makes its way to court, the CCMA or the media, it could be very damaging to your brand. Not only do employees want to work for a company that remunerates fairly and sustainably, but it’s also good governance. It’s simply the right thing to do,” concludes Bussin.

ENDS

 
MEDIA CONTACT: Idele Prinsloo, 082 573 9219, idele@thatpoint.co.za, 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 Fourth Industrial Revolution is about the acceleration of innovation and the velocity of disruption, and these two factors are creating disruption and along with this, new opportunities for business,” says Nicol Mullins, Chartered Reward Specialist and Executive Committee Member at the South African Reward Association (SARA).
 
He observes that Covid-19 has served as a catalyst for the adoption of Fourth Industrial Revolution (4IR) technologies, along with forcing the development of new business models or the adaptation of existing ones.  This trend is also redefining the approach employers take to remuneration and reward.
 
A New Perspective on Reward
“4IR certainly presents risks, but risks are also opportunities for workers to upskill and position themselves to gain the most from this new era,” says Mullins.
 
This is especially true of the massive global move towards the virtual workplace, with many employees now working exclusively from home and connecting with their organisations, teams and managers digitally.
 
Most organisations have pivoted rapidly to this new normal while others have not been as quick to transition.
 
Either way, businesses are reviewing their strategic outlook based on a new set of challenges they face and resources now available to them due to the automation of repetitive, routine processes.
 
“Reward strategies must likewise be adapted to complement this new paradigm and align with reimagined business strategies to contribute the highest value to their achievement,” says Mullins.
 
Expanded Talent Possibilities
An important effect of digitalisation is that talent sourcing and recruitment in a virtual world is not restricted by national borders. Or to humans.
 
Instead, 4IR is blurring the boundaries between the physical, digital and biological, allowing organisations to draw from a worldwide pool of talent and specialisation. Resources no longer need to be situated locally but can contribute to corporate outcomes from anywhere on the planet.
 
Because of this, reward strategies are shifting from an internal-only focus to include external parties as well. While companies have long followed a build, borrow or buy approach to talent planning and acquisition, borrowing is coming to the fore.
 
“Organisations can more readily direct work to underutilised personnel without being constrained by departmental or divisional boundaries, resulting in greater efficiency and productivity,” says Mullins.
 
Similarly, freelancers can be more seamlessly integrated into business processes to tackle activities that require professional attention, but not so frequently as to justify permanent staff.
 
Better Reward Strategies
As they embrace virtual workspaces, a more fluid talent mix and flexible work assignments, organisations must also determine how rewards should be structured for both internal and external staff requirements.
 
For short term assignments, freelancers may be considered vendors who bill clients for their work and manage their own benefits and work-life balance. For long term contractors, especially those offering scarce or critical skills, a viable reward policy should be investigated.
 
Employers may also consider hiring out specialist staff to other organisations, earning extra income when their workload is low. Embracing a sharing economy.
 
How to design and implement remuneration and reward programmes appropriate to these dynamics falls squarely within the purview of the reward specialist.
 
“Now is the ideal time for organisations to engage closely with their reward practitioners, whether inhouse or outsourced, and involve them more deeply in workforce planning and strategy,” says Mullins.
 
ENDS
 
MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za 
 
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