South Africans can expect an average salary increase of 6% in 2024\/25, which will ensure that earnings beat inflation. <\/p>\n\n\n\n
This is according to Dr Mark Bussin, Master Reward Specialist and Executive Committee Member of the\u00a0South\u00a0African\u00a0Reward Association (SARA).<\/p>\n\n\n\n
\u201cThere is a glimmer of hope regarding GDP growth, and if we continue on this trajectory, it could mean the brighter future we\u2019ve all been praying for,\u201d said Bussin. <\/p>\n\n\n\n
Although salary increases are not the only consideration in a robust total rewards programme, they are a cornerstone. <\/p>\n\n\n\n
Salary increases are a vital factor in business sustainability.<\/p>\n\n\n\n
They are also essential to employees who, due to inflation, become relatively poorer yearly if their salary stays the same. <\/p>\n\n\n\n
A timely salary increase helps them stay ahead of the cost of living and pursue a content lifestyle.<\/p>\n\n\n\n
The latest figures from Stats SA showed that inflation stood at 4.4% in August.<\/p>\n\n\n\n
The Bureau for Economic Research\u2019s (BER\u2019s) latest inflation expectation survey showed that analysts, business people, and trade unions expect average inflation to be 5.1% in 2024 before subsidising to 4.8% in 2025 and 2026.<\/p>\n\n\n\n
At the current rate of 4.4%, South Africans will receive a 1.6% real salary increase. <\/p>\n\n\n\n
This means that real salary increases should be made over the coming year. <\/p>\n\n\n\n
Bussin said that the start point for setting salary increases is typically the consumer price index (CPI), but there are other factors that employers need to consider. This includes: <\/p>\n\n\n\n
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Comprehending these and other factors unique to a business helps employers to take the guesswork out of salary increases. <\/p>\n\n\n\n
SARA’s data shows that increases for 2024 by staff category will look like the following:
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Other aspects to keep in mind <\/strong><\/p>\n\n\n\n The Reserve Bank’s recent reduction in the repo rate from 8.25% to 8% also improves the cost-of-living gap somewhat as workers will pay less to service their debt.<\/p>\n\n\n\n Nevertheless, Bussin said that the drop in interest rates is a silver lining as many employees are over-indebted while others continue to live in what SARA calls “in-work poverty.” <\/p>\n\n\n\n \u201cWe need to aim for a living wage that allows workers to live with dignity,\u201d said Bussin.<\/p>\n\n\n\n Although salary increases are important, Bussin said that remuneration and increases do not live in a silo. <\/p>\n\n\n\n \u201cThe country needs growth, and growth needs skills and talent.”<\/p>\n\n\n\n \u201cWe have both, but we must unleash them by creating the correct government policy framework and certainty to support it.\u201d<\/p>\n\n\n\n SARA said that lawmakers need to push much-needed policy reforms to boost organisations\u2019 ability to grow and hire unemployed people.<\/p>\n\n\n\n Research from the BER showed that if reforms are implemented quickly, South Africa could achieve GDP growth of 3% by next year – a significant improvement from the 0.7% in 2023 and the expected 1.0% for 2024. <\/p>\n\n\n\n