Despite challenging markets and the tough economic environment, more than 50% of employees at mid- and senior management levels in South Africa’s top companies expect to receive above-inflation increases this year, a survey has revealed.
Results from the annual Jack Hammer Bonus & Salary Survey further shows that 62% of respondents expected bonuses that were at least in line with bonuses received last year, while 88% expected increases that were at least inflation-linked.
Each year, the survey polls senior executives and managers in various sectors – including retail, financial services and manufacturing – about their expectations of bonuses and salary increases.
Last year, only 38% of respondents were positive about the prospects of receiving bonuses in line with the previous year – but optimism increased substantially this year.
“These findings are important, particularly for those companies already feeling the pressure, and that may have been considering holding out on substantial bonuses or increases for their senior leaders,” says Advaita Naidoo, COO at Jack Hammer, Africa’s largest independent executive search firm.
She says companies unable to meet the expectations of their senior employees must start managing the situation sooner rather than later.
“Difficult times, in particular, require solid leadership. And given that 46% of respondents indicated that not receiving a bonus would influence a decision to consider a career move, companies need to start doing the math. Although bonuses and increases might not seem like the best way to direct scarce funds right now, it has to be balanced against the possibility that you may lose strong leaders, and that this can result in the additional cost of recruiting and training,” she says.
A further cause for concern, is the growing demand for qualified and experienced leaders while the supply pool continues to dwindle as a result of emigration, notes Naidoo.
“There are numerous studies and surveys showing that qualified South African professionals, across all demographics, are either leaving or considering their options abroad, which presents a challenge to local business serious about building top teams. And unfortunately, this will also further impact on transformation.”
It is clear then that companies must approach the coming bonus and salary negotations with caution, and taking into account all the factors that could arise as a result of a decision to continue toeing the austerity line where bonuses and salaries are concerned, Naidoo says.
“Losing leaders who are already making a positive impact is expensive. If you weigh up the direct and indirect costs of a new hire, you might want to reconsider your reward strategy for your top people,” she says.
