Can South African workers look forward to increases in line with the cost of living this year?
According to Dr Mark Bussin, Master Reward Specialist and EXCO member at the South African Reward Association (SARA), economic instability in the country makes this unlikely – unless the government takes drastic action soon.
"Unfortunately, the current state of South Africa means the financial outlook for companies is generally bleak and this will have a direct impact on their ability to offer any kind of meaningful increases to employees," he says.
Dr Bussin provides an overview of the causes of the situation, their impact on employee rewards, and solutions that should be implemented promptly to improve conditions.
How will increase decisions be impacted by the current economic climate?
"First, we need to ascertain what is meant by 'current economic climate'," says Dr Bussin. He highlights the following key factors that define the country's economic situation and impede employers' ability to make favourable increase decisions:
These economic failings will inevitably cause employers to:
"You can ask a thousand economists this question and you will get a thousand different answers," says Dr Bussin. However, from a company perspective, relative to the decisions around making salary increases possible, he believes the following must happen at all levels of government:
What does this mean for employees?
"Until the government takes decisive and proactive steps to remove these economic barriers, organisations will be unable to respond positively to their employees' cost-of-living requirements," says Dr Bussin.
He encourages companies and concern groups to continue to put pressure on the nation's leaders to make tangible reforms that will help South Africa recover from crippling economic deficiencies.
"We can talk about working together towards a solution all we want. But, if the proper political, legal and socio-economic foundations are not in place, there is no footing to climb out of the hole in which we collectively find ourselves," he says.
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