Sanchia Temkin
5 November 2009
Johannesburg — A LARGE proportion of companies in SA have frozen salary increases this year, particularly at management level.
Management received a lower percentage increase in pay when compared with other staff categories this year.
These are some of the findings of a recent snap survey carried out by Deloitte on 206 companies.
"In 2008, the average increase across all categories was 9,0%, while in the first eight months of 2009, this figure was reduced to 8,0% and the average predicted increase for the remainder of this year was 7,1%," Kris Crawford, a senior manager at Deloitte's human capital division, said yesterday. "These results suggest to us that companies are becoming more cautious in the current economic environment," she said.
When asked about staff retrenchments, 25% of the sample said they had to retrench employees last year, affecting 4,6% of the workforce.
This number grew to 35% during the course of this year, affecting 8% of the workforce, Crawford said.
Retrenchments before the end of the year were predicted by 11% of the respondents.
"We were also surprised to see that only 7% of the sample had reduced the number of working days per week," Crawford said.
"However, a further 6% of the respondents have had enforced 'shut-downs' recently due to the downturn," she said.
The survey also covered performance bonuses and incentive schemes.
The majority of companies (84%) indicated that they have had some sort of incentive or performance bonus scheme in place. Two-thirds said that the amount paid for these bonuses in the past year equated to the budgeted amount.
"We also asked for feedback on what companies are doing in terms of retaining key staff if they do not plan to pay some form of key bonus," Crawford said.
Measures cited included such things as paying market-related salaries and benefits; developing staff through training programmes; paying a premium for scarce or critical skills and nonmonetary recognition such as paid holidays as an incentive.
"It should also be noted that a number of companies indicated that they do not have measures in place to retain key staff," Crawford said.
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