South African employers are planning to increase their budgets for pay rises of 6.1% in 2023 as they try to attract and retain staff amid high inflation and a challenging labour market, according to research by WTW, a global advisory, broking and solutions company.
WTW’s salary budget planning report, which got 423 responses in South Africa, said the 6.1% increase for 2023 was slightly higher than the 5.9% average given in 2022.
Nearly four in ten (38%) businesses said their pay budget for 2023 was higher than they thought it would be.
Employers are increasing pay budgets for three main reasons: 78% said they were concerned about inflation, 37% said they were responding to a difficult labour market, and 30% wanted to improve the retention of existing staff.
WTW South Africa’s work and rewards director Melanie Trollip said: “The pressure of inflation and a competitive labour market are forcing many to increase their pay budgets so that they can both retain and attract the best staff. The forecast pay increases for this year are, however, slightly below inflation, which is common in more challenging economic times.”
Many South African firms are upbeat about the business outlook and are in hiring mode. Almost a third (31%) said the outlook for their business was better than they had forecast, while 49% said it was in line with their expectations. Half (51%) of employers plan to recruit into engineering roles in the next 12 months, while 44% are hiring in IT roles, while 44% also want more workers in sales.
BUSINESS REPORT