The Star reports that SA businesses have cut pay rises by 20% and introduced widespread hiring freezes in response to the global Covid-19 pandemic, with the jobs market in near lockdown.
This was revealed by research released last week by advisory group Willis Towers Watson. At the beginning of the year, employers in SA were planning to give their staff an average annual pay rise of 6.8%. But following the start of the pandemic, they cut that figure to a 5.5% average pay increase. With inflation set to be about 4%, the real-term “take home” average pay rise for workers will thus be 1.5%. Willis Towers Watson’s Salary Budget Planning Report, which studies the size of pay budgets at firms, also showed that in 2021 SA companies expect to offer average pay rises of 5.7%. With inflation forecast to be 4.5% next year, that will leave real-term rises of 1.2%. Many of the 211 South African firms that took part in the global study faced tough decisions about pay. Almost one in five firms froze their pay increases for 2020 because of Covid-19. A further 15% decided to postpone their pay rise to later in the year. Nineteen percent cut the size of bonuses, while 22% were delaying bonus pay-outs. Fifteen percent said they had already reduced staff numbers due to the pandemic and 44% were planning, or considering, doing so. Seventy-three percent had frozen or cut recruitment, while 21% were making plans to do so.
- Read the full original of the report in the above regard by Edward West on page 6 of The Star of 26 August 2020
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