Although there are some signs that South African businesses are starting to recover amid the pandemic, additional challenges are being faced.
According to experts, South African workers are unlikely to receive any increases in line with the cost of living this year.
While rising inflation has been a long standing issue, it has lately been exacerbated by South Africa’s electricity crisis.
These factors were further highlighted in the Bankserve take home pay report, which showed a 4.8% decline.
Many businesses are forced to close their doors during power cuts and the excessive downtime has caused a major drop in sales, reduced turnover and other expenses.
Executive member of the SA Reward Association, Dr Mark Bussin says that the current state of South Africa means the financial outlook for companies is generally bleak, and this will have a direct impact on their ability to offer any kind of meaningful increases to employees.
He adds, “For us [employees] to get good salary increases and good bonuses, our companies need to be performing well, for companies to perform well the economy needs to perform well."
Bussin further noted that in order for the economy to perform well, there are certain structural adjustments that need to be made by government as well as additional interventions that offer support to businesses.
These interventions include, government reducing red tape and regulations to make it easier for companies to conduct business.
Additionally, for a company to be in position where they can afford to offer salary increases, the company has to have financial stability and the assurance that it will operate and have its doors open in the long term, he continued.
Bussin adds, “In order to do that, its cost control and making more sales is important, then companies will see a profit.”
Meanwhile, the country’s unemployment rate has recently increased by one percentage point from 32.9% to 33.9%, painting a further bleak picture as it remains below pre-pandemic levels.
Bussin says that companies and civil society groups should put further pressure on government officials to address the economic disaster the country is facing.
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