 The proliferation of freelancing and gig work has seen employers witness a massive shift from traditional nine-to-five jobs to part-time work and independent contracting, known as the gig economy.
Muhammed Goolab, Executive Committee Member of the South African Reward Association (SARA), says employers will need to rethink their reward programmes to align with the digital economy and the disruption it has brought to the employment landscape. “92% of millennials want to work remotely, and millennials make up 40% of the workforce. Many companies now employ gig workers, but few of them have thought of what it means to include giggers in their overall People Strategies. If companies want to appeal to millennial and Gen-Z talent, they will need to evolve how they include giggers in their company’s People offering,” says Goolab. Why include giggers in your company’s Reward Strategy? Very often, giggers provide experienced and qualified skills on-demand and, according to Forbes, 42% of both large and mid-size companies use contingent workers to meet seasonal demands or project-specific goals. Not only will a reward strategy geared towards giggers make an employer more appealing, but it will boost the employer’s bottom line. “A Reward Strategy that includes tailored benefits for gig workers can form an important part of an employer’s value proposition for the talent they’re looking to recruit. In turn, gig workers at their organisations will feel an increased sense of belonging and mutual achievement, which in turn boosts productivity,” says Goolab. How to create a Reward Strategy for giggers Before benefits can be defined, a performance management system needs to be put in place. “Performance management is just as important for giggers as it is for permanent employees. An example of a performance management system that a major gig economy employer uses is Uber’s rating system for their drivers. To establish a performance management system for giggers at your company, companies would need to establish performance metrics based on the usual criteria of productivity, quality, customer satisfaction or financial metrics,” says Goolab. The Reward team would then need to review the non-perm benefits offerings in line with the flexible nature of the gig economy, as the usual benefits of medical aid, life cover and pension contributions would be inappropriate. Benefits to giggers would need to be well defined and clearly articulated as a value proposition that is different to that of a permanent employee and attractive to a gigger. “An example of a financial reward geared towards giggers is a project completion bonus that could be offered if a gigger completes a project on time, within budget, and per a defined quality standard. One of the gig worker’s most valuable commodities is the skills they bring to the table, making learning opportunities another great incentive. An even more innovative approach would be to develop technology that connects gig workers with available work within the business or even the wider industry. The companies who connect with giggers and reward them in smart ways will be the ones benefiting the most from the gig economy in 2020 and beyond,” 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
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 At the recently held 2019 Reward Awards ceremony hosted by the South African Reward Association (SARA), Clicks Group won the Reward Project of the Year award for the second consecutive year while Nedbank won the Remuneration Report award. Sue Tosh won the prestigious President’s Award.
Attracting, retaining, motivating and engaging employees relies on the innovation and technical expertise of rewards professionals. The annual awards celebrate the professionals who design reward structures that make a difference in their companies. Reward Project Award The 2019 SARA Reward Project award recognised the team from Clicks Group that enabled the company’s aspiration of providing medical aid benefits to all staff, especially their most vulnerable employees not covered by a medical aid scheme. Clicks Group was congratulated for enrolling over 9000 semi-skilled employees onto a comprehensive medical aid plan, with their membership paid in full by the company. Since implementation, labour turnover has reduced by 29% and there has a been a significant improvement in overall staff morale. In this project, Clicks demonstrated how they addressed a core staff need and used their bargaining power to provide a key benefit for their employees and their families. The other placed nominees of the 2019 SARA Reward Project of the Year award were MultiChoice in second place, and Investec in third place. Remuneration Report Award The winner of the 2019 SARA Remuneration Report of the Year award, amongst an excellent number of nominees, is Nedbank. Tiger Brands received 2nd Place and Sasol received 3rd place for their submissions. This award recognises organisations for how well they have demonstrated compliance with the King IVTM principles through clear and concise disclosure of the company’s remuneration philosophy and its application. Submissions were evaluated by a panel of judges and specific focus was given to how organisations report on the remuneration detail such as fixed and variable pay. President’s Award A special President's Award that honours outstanding achievement in the field of reward was awarded to Sue Tosh. Throughout her career, she has been a highly respected remuneration practitioner at large listed companies and has contributed personal leadership as well as building effective and valuable reward teams within her organisations. Sue has built and led a team of highly engaged and dedicated professionals that are part of the Group’s Centre of Excellence in Human Capital, providing advisory services on all aspects of remuneration, benefits, recognition and cross-border mobility enabling the Group’s talent plans. During her seven-year tenure at Standard Bank Group, Sue has been instrumental in improving remuneration governance and has made significant improvements to the Group’s remuneration report. In this regard, Standard Bank has become the benchmark in the financial sector and was recognised by SARA, winning the award for the Best Remuneration Report in both 2014 and 2018. Through the Reward Awards, SARA aims to recognize and celebrate companies who create reward structures that are transparent, fair and responsibly reward employees and executives for their effort. The association hopes to inspire industry best practice and rewards that help companies and their employees achieve success. 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  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, 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 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, 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 right balanced total reward programme can assist in reducing absenteeism,” says Nicol Mullins, Executive Committee Member at the South African Reward Association (SARA).
The number of employees taking days off work has risen so much over the last decade that Absence Management is now a standard HR function. Companies can even buy purpose built software to help them track and contain rampant absenteeism.However, according to Mullins, it is a problem that needs to be solved, not controlled. “When absenteeism is rife across an enterprise, it may be the tip of the iceberg, indicating a more general dissatisfaction among employees, which might be intrinsic or extrinsic in nature” he says. Regardless of the cause of absenteeism, researchers of the topic across various industries agree on its detrimental effects to an organisation’s morale, productivity and profitability. To name a few consequences, not only do employers not benefit from labour they’re paying for, but costs rise as present employees work overtime to catch up, quality is sacrificed, consultants are engaged for specialised tasks, or strategic opportunities are missed because key personnel are not at work or working. A stressful environment A 2009 study by researchers Halkos and Bousinakis concluded that absenteeism is related to workplace stress which results in low levels of job satisfaction. In 2002, researchers de Boer, Bakker, Syroit and Schaufeli offered two theories for absenteeism. Withdrawal theory suggests that absentees are withdrawing from adverse working conditions while stress theory says employees develop stress symptoms because they are unable to cope with these conditions. How rewards can help The importance of a meaningful total reward programme in curbing absenteeism cannot be overstated. “‘Meaningful’ means it must create value for the employees it targets,” say Mullins. That value can be financial, but where workplace stress is the culprit, rewards should be aimed at removing negative catalysts and promoting job satisfaction. Two approaches suggested by Mullins are to develop clear opportunities for career progression and to foster a sense of ownership in the business. “Employee-owned and family businesses experience much lower absenteeism simply because there’s a strong sense of belonging and growth potential amongst workers - a sense of ownership.” he says. “A company that can create this reality will experience a reduction in worker absence and improved productivity.” Companies should also reward the behaviours they want to see. Recognising workers who have been present for a high number of consecutive days sends a clear message to their colleagues that this behaviour is desirable. However, Mullins warns that any such initiatives can only be effective if they are part of a larger, carefully developed total reward programme, which is both monetary and non-monetary in nature. Getting rewards right Engineering the optimal total reward programme for a given corporate environment or culture is a complex task, and today there is a specialised profession that has evolved around the process. “Companies who throw a few benefits together and expect employees to automatically respond are wasting their time,” warns Mullins. Reward practitioners are trained in multiple disciplines, enabling them to develop sophisticated total reward packages that promote desirable employee behaviours while supporting corporate strategy. Organisations wishing to minimize absenteeism can contact SARA for more information on how to engage a certified practitioner. 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  By: Rosanna Stofberg, member of the Professionalisation Committee at the South African Reward Association (SARA).
South African companies are starting to see the benefits of adopting more flexible work arrangements, especially to attract and retain individuals with skills that are in high demand. This is due in part to the fact that technology is maturing at such a rate that many tasks and activities that would have been impossible to complete remotely before, or too expensive, are now quite feasible. Although there is no specific data on the current uptake of flexible work arrangements in South Africa, many SARA members already have a variety of these practices in place, or are consideringor piloting, some flexible work options. People associate flexible work arrangements with “non-traditional ways” of allowing people to do their work. The following practices have already taken hold:
In every business there are roles that are well suited for flexible work, and others that are not. The benefits Companies are finding that flexibility is becoming a necessity, particularly for employees that have scarce skills and are in high demand. Many are expecting some degree of flexibility from their employer. Employees who are looking for new opportunities will certainly consider the level of flexibility on offer, and this may be a way for employers to differentiate themselves. Many South Africans have to deal with the practical reality of severe traffic congestion when commuting to and back from work, and the high cost of fuel or transportation. Many spend in excess of three or four hours commuting to their workplaces every day. Eliminating or reducing the time, cost and stress of that commute from their lives - even it is just one or two days a week - can dramatically change their work life balance, their wellness and their engagement with the company. Flexible work arrangements can also lead to financial savings for companies. If the entire workforce does not have to come into the office every day, less floor space, parking, desks and IT infrastructure is required to get the work done. That can translate into large cost savings for the organisation. Technological advances Many companies will need to invest in technology to enable their employees to work more flexibly. This could mean data allowances or having to invest in the necessary software that will allow greater access to business systems remotely. Virtual meetings - such as Skype or Google Hangouts - have gained significant traction in the last few years, enabling companies to have conference, team or meeting calls with many remote participants, often with video feeds. The widespread penetration of home internet connectivity via ADSL and fibre solutions have allowed more people to have access to data in many more places. That has changed the landscape quite dramatically. Managing a remote workforce Many companies are starting to grapple with issues such as the remuneration and performance management of a remote workforce. At the core of these issues is trust between employer and employee, open communication and clear expectations. Some managers may struggle with the idea of how to manage employees who they don’t see all or every day. Practices to address these fears include setting clear expectations and giving regular feedback to employees who work remotely. These practices can generate the same or superior, performance outputs . The potential dark side Despite all the benefits of a more flexible workforce, there is also a potential dark side to it. People who are mainly working away from the office may tend to overcompensate for the perception that they may be slacking off a bit, and actually work longer hours.There has to be a deliberate focus to create boundaries and balance between work and rest. There are also concerns about the potential impact of flexible work practices on social connections in the workplace. Relationships and networks are critical to empowering people to collaborate and perform well, and many top companies are ensuring their flexible solutions enable this social connectivity for remote workers, and deliberately create opportunities for people to connect. Trust and communication between managers and employees is absolutely critical for flexible work practices to be effective. Although it seems like a big shift for many people, if good management practices such as regular check-ins, feedback sessions, and clear expectations are in place, then a lot of these transitions will feel more natural and less jarring to the new workplace relationship. 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  As the professional body aimed at promoting the reward profession and practices, the South African Reward Association (SARA) often receives questions related to salaries, benchmarking and benefits.
In this article, Muhammed Goolab, Executive Committee Member of SARA, answers the top five most frequently asked questions. 1. What does a market related salary mean? A market related salary refers to the going rate that the job market is prepared to pay for a specific role. This is done through salary benchmarking which is an important tool that is used to understand pay levels across all the roles within an organization. Benchmarking involves a process where a company’s jobs are matched to roles with similar responsibilities and at similar levels outside of the business. Companies do this to identify the salary levels of various roles within the market. 2. How does my pay compare to other employees who work at my company and people in similar positions at other companies? Many times, companies participate in salary surveys that are run by independent service providers. This information provides an accurate view of salary ranges across various industries. Your Human Resources team may be able to share this information with you, which is typically presented in the form of a spread of salaries that indicate the lower and upper ends of the salary range for job roles. Companies typically also have internal pay scales with lower and upper limits for each pay grade. Where you sit on the scale will depend on differentiating factors such as skill level, experience, performance, education and so forth. If your company doesn’t share pay-related information with staff, online resources such as job adverts can be researched. These sources, however, tend to be unreliable because the data has not been validated. 3. How are salary increases determined? Some of the factors that employers use to determine salary increases include affordability, business performance, union agreements, industry trends, as well as salary market movements. It is for these reasons that salary increases aren’t always aligned to inflation and macro-economic trends, although both these factors are considered when determining increases. 4. How much could I earn when I reach my potential? The rates of pay for various roles are determined by market demand. Organisations pay employees for the job they perform at the level they are in within the business. As an employee masters a role or discipline, they are often promoted to higher levels with increased responsibilities. This is usually reflected in an increase in pay. As you master a role or discipline, you should find yourself in the upper end of the salary range for that job. 5. My friends and I do the same work, but they get paid much more than I do. Why is this the case? While job roles may seem similar, several factors determine an individual’s pay level. Different industries, for example, pay at different levels for the same skill, while some companies pay premiums for skills that they place more value on. This, combined with factors such as affordability and the differences in an individual’s performance, can all contribute to varying pay levels for similar roles. 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 South African Reward Association (SARA) welcomes the court action set in motion by Steinhoff in a bid to claw back more than R1bn from its former CEO Markus Jooste and CFO Ben la Grange.
The association strongly supports transparent, fair, responsible and sustainable remuneration. It appears that what has happened at Steinhoff has not been in line with the King IVTM principles of good corporate and remuneration governance, says Laurence Grubb, SARA Exco member, Master Reward Specialist and expert on executive remuneration. This clawback action is certainly something new to South Africa. He referred to the directors of Dawn, a building supply business, who in 2015 agreed to pay back R7 million in bonuses following engagement with shareholders. However, because of the settlement in the Dawn matter, there is still no legal clawback precedent in South Africa. King IV Principle 14, dealing with remuneration, defines clawback as the forfeiture or recovery of post-vesting remuneration – typically the recovery of viable remuneration such as incentives that have already been paid. The Steinhoff case is even more compelling because the company is attempting to claw back not only the bonus amounts and the share incentive settlement amounts, but also the guaranteed salaries from the former CEO and CFO. They are doing this on the basis that if the remuneration committee was aware of the transgressions, they would not have allowed the guaranteed salaries to be paid. Grubb says that following corporate scandals such as those alleged at Steinhoff and Tongaat, companies are tightening their remuneration policies. Malus and clawback clauses are increasingly being introduced – to protect the company and shareholders against unscrupulous executive conduct. Malus is relatively easy to implement since cash or share awards that are still unvested and have not yet been paid or settled can be forfeited without explicit recovery required. However, in the case of Steinhoff, the payments relate to variable and fixed remuneration that had already been paid, and the company now has to approach the courts through an undue enrichment claim to recover the monies. [MH1] “There is no doubt that if you have malus and clawback clauses in your policies it is far more likely that the company will succeed with any bona fide recovery of funds, whether by court action or not” says Grubb. Apart from the financial services sector, the inclusion of these clauses in a company’s Remuneration Policy is still an emerging practice. “It is something that all companies should be drafting and implementing urgently. Shareholders and investment advisors are starting to demand that these clauses form part of remuneration policies.” Without these clauses companies will most probably have to approach the courts – a still untested route in terms of legal precedent. “For the first time in South Africa we can expect a few court cases arising from the conduct of executives where these issues will be tested.” Grubb expressed the hope that it will pave the way for guidelines and pay-precedents in terms of how companies, boards and shareholders can protect themselves against the malicious conduct of unscrupulous executives. 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  Now more than ever, women are redefining pathways to power, rearchitecting industries, sparking movements, and solving the most pressing problems of our time.
Despite this, much more effort is required to address the issues that result in gender based pay inequity in corporate South Africa, says Lindiwe Sebesho, Executive Committee Member of the South African Reward Association. “In light of women’s month, we find ourselves having to once again put a spotlight on where we are going wrong when it comes to this topic. We hope this will encourage reflection so that corporates who want to be a foundation for the innovation that those with a truly diverse and inclusive workplace achieve, can take due action” says Sebesho. Equal pay for equal work is still a fairy tale According to the ILO Global Wage report’s 2018/19 statistics, women continue to be paid 28% less than men. The report covered 70 countries and 80% of wage employees worldwide. An even more alarming statistic is that South Africa has the world’s highest wage inequality overall. “South Africa’s history and legacy resulted in exclusionary policies, which is why the Employment Equity Act 55 of 1998 was introduced. The responsibility of reducing inequality in wage distribution as well as protecting and advancing persons who were disadvantaged by unfair discrimination lies with employers. Providing equal pay for men and women doing equal value work is an important step on the path towards a fairer South Africa,” says Sebesho. The motherhood penalty The ‘motherhood penalty’ refers to research that shows that women see a significant reduction in earnings after having children, something that men are not subjected to. The magnitude of the drop in women’s earnings vary from country to country, but research has found that there is a high correlation between the intensity of cultural expectations of women to stay at home with children and the degree to which they experience the motherhood penalty. “There is still a lot of unconscious bias in how we treat mothers, with men enjoying an income boost when they have children and women earning an average of 10% less for each child they conceive,” says Sebesho. Research has indicated that working moms are actually more productive workers. Despite this, there are many managers who avoid hiring younger women to get around maternity leave and the belief that women ‘aren’t as good at their jobs’ when they return “It is advisable for women, particularly skilled women, to seek out employers who are committed to the advancement of women and illustrate this through favorable policies for working moms, value family and offer flexible work arrangements without a pay penalty. It’s also important to make sure that women have the support they need at home, as child-rearing isn’t a women-only job,” says Sebesho. The report further highlights the fact that women tend to not always ask to be paid what they are worth, even though they are more educated and more capable than at any other point in history. “Those in leadership positions need to use their authority to promote and advocate for women. It is imperative that we lead deliberate and structured approaches towards combating gender inequality in corporate South Africa. The current and future talent that must create sustainable solutions for the world’s problems, depends on it,” concludes Sebesho. 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  Many people are opting for freelance, flexible, on-demand work instead of steady, full-time employment.
The impact of the gig economy is still poorly understood, even though the labour market continues to adapt to the new global, digital marketplace. Muhammed Goolab, Executive Committee Member of the South African Rewards Association, says that there are both advantages and disadvantages to participating in the gig economy. “The gig economy is a system that rewards people per task or gig in smaller increments than salaried employees. ‘Giggers’ would need to understand the demand for their particular job in the market and what that job would typically be priced at. Negotiation is a two-way discussion, framed by affordability and economic conditions,” says Goolab. Some online platforms such as Uber allow participants to choose the jobs they want and at the rates they are prepared to work for. Problems, however, may arise when many people start offering your skill at a lower price. “The challenge with pricing jobs in the gig economy is that technology allows for thousands of entrants to compete for jobs. In cases where there is a dramatic increase in the supply of people willing to do a job, there will be a massive decrease in rates of pay. This can have detrimental effects on pay and it opens the possibility of exploitation,” says Goolab. The ‘real money’ in the gig economy, says Goolab, lies in the ability to provide specialist skills that support industry disruption, innovation or growth in a digital economy. Foregoing rewards and stability for flexibility and freedom Despite the risk of being outpriced in certain industries, the gig economy provides an earning outlet for anyone who requires greater flexibility in their lives. A retiree who wants to increase the longevity of her work life with the benefit of being able to work beyond her retirement age, or a graduate who wants to do freelance work while travelling instead of pursuing a 9 – 5 job are all prime examples of those who may opt to achieve their lifestyle goals through gigging. To achieve this lifestyle, they would typically sacrifice on the benefits that permanent employers offer, such as a pension, medical aid contributions and job security. “It is just as important for ‘giggers’ to keep an eye on their savings and retirement, despite the perceived ability to work beyond retirement constraints. ‘Giggers’ should also consult a financial advisor and keep track of their financial security,” says Goolab. A satisfying but sometimes stressful life Although participants in the gig economy sacrifice many benefits that a salaried employee would normally receive along with a certain amount of financial security and income predictability, surveys show that gig economy participants have higher levels of job satisfaction, which is generally linked to the flexibility that the gig economy provides. “The key to success in the gig economy is building good networks and demonstrating a good and reliable service. This will help you build credibility for repeat work opportunities,” concludes 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 |
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