South African professionals are uncertain about whether they will receive salary increases in 2022, despite companies being bullish on remuneration.
This is according to data published by specialist professional recruitment firm Robert Walters which surveyed professionals in the legal, banking, finance and accounting sectors as part of its annual 2022 wage survey.
Nearly three-quarters (65%) of the legal firms surveyed said that they are confident about being able to offer wage hikes in 2022, though this is not reflected in staff responses with just 25 % of legal workers expecting a pay rise in 2022.
A similar trend is seen in other sectors as 27% of accounting professionals are expecting a pay rise this year, while 25% of banking and finance professionals said they expect to see an increase in the coming months.
Robert Walters said that salaries are expected to broadly increase in 2022 – especially at the top-end of the spectrum – as firms and businesses try to retain valuable skills and personnel with lucrative packages.
Despite South Africa’s record-high unemployment rate, companies have flagged concerns about a ‘great resignation’ among skilled workers, with businesses expected to offer more rewards and incentives in the coming year to avoid a possible brain drain.
Experts have pointed to an impending shortage of newly qualified chartered accountants in 2022 as many take advantage of international opportunities, while similarly, legal associates on a continent are also looking abroad.
Going into 2022, labour markets are still tight, with many open positions going unfilled, said Kapil Joshi, head of collective investments, at Momentum Investments in a research note.
“The phenomenon known as the “great resignation” of workers from the workforce has left many businesses with major skills gaps. In addition to this, strike and protest action has been on the rise, and may well continue to grow in the coming year.
The costs of high employee turnover to a business can be significant,” said Gerhard Hartman, VP: Medium Business for Sage Africa & Middle East.
“Gallup indicates that the cost of replacing an employee can range from half to twice their annual salary. In addition to the costs of recruiting and training new employees, high turnover can harm workforce morale and the customer experience.”
How much are wages expected to increase?
Separate data published by global advisory firm Willis Towers Watson at the end of 2021 shows that South African private-sector workers are set to receive an average pay rise of 5.5% in 2022, which is a cautious improvement over the 4.7% average increase paid in 2021.
Similarly, the proportion of businesses expecting to freeze pay altogether is also set to fall from 12% in 2021, to 5% in 2022.
“Businesses are navigating a tentative recovery from the pandemic, and it is encouraging that many are planning to offer more generous pay rises,” said Melanie Trollip, director of talent and reward at Willis Towers Watson South Africa.
“The thaw in pay freezes will be welcome, and many people can expect next year’s pay rise to be an improvement on this year.”
The research, which includes responses from over 320 local firms, also shows that some industries plan to be more generous than others when it comes to increases.
Average pay rises in 2022 are set to be higher in:
- Medical technology (+7.1%);
- Pharmaceutical (+6.1%);
- Consumer product (+6%).
By comparison, workers in the following sectors can expect a below-average increase:
- Business consulting (+3.7%),
- Energy and natural resources (+4.1%),
- Construction (+4.2%)