P E Corporate Services’ Executive Chairman Martin Westcott was recently interviewed on Cape Talk’s Breakfast with Refilwe Moloto, discussing our latest Salary Survey Trends Report.

[Listen to the full interview here]

Traditionally over many years we have seen a gap between salary increases and inflation. Increase shave tended to lead inflation by a couple of percentage points. That position has reversed itself over the last 5 to 10 years, and we find the increases at the bottom end of the organisation – particularly with unionised staff – people will receive increases much closer to 7% than the average 6 we are reporting.

How have we been able to see increases this high?

The real reason is the storage of skills in our economy (notwithstanding the fact that we had extremely low growth) we still have a shortage of certain key skills, especially experienced people and people in professions such a IT, qualified engineers, artisans, certain financial skills and so on. And that’s what drives up your pay rates from year to year.

What about unionised employees?

Unions have been very successful in negotiating relatively high rates of increase for their members. We’ve seen this with mining, parastatals and state-owned enterprises – we’ve seen some substantial increases (up to 7%) and this has been a function of strong union activity. Case in point: the recent SAA strike which resulted in an 8% increase. There’s been a strong push from unions, and state-owned entities experience difficulties in trying to contain that type of cost.

Have we done enough to stave off a drop in ratings?

When you have strikes – regardless of whether they are legal or illegal ones – at key industries such as power generation and air transport, eventually you have to settle. If one looks at the rate of wage settlements over the years, it’s typically around 8%. This is inevitably going to drive up VAT increases. It’s not the entire organisation in each case, but it’s a significant component of it.

What should organisations be paying?

Our latest Salary Surveys provide your company with Salary Trends for 2020 and other valuable Cash and Non-Cash benefits detailing best practise. Our technology provides automated projections for salaries by position and salary by grade for all locations and various industries. If you’re looking to learn more about the latest Salary Trends, get your complimentary trends report by clicking here.

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