South African businesses plan 5.5% pay rises for 2022 as pay freezes fall
Employers in South Africa plan to give their staff an average annual pay rise of 5.5% in 2022, research by Willis Towers Watson revealed today.
The rise is an improvement on the 4.7% average increase paid this year and, with inflation forecast at 4.2% to 4.5% in 2022, gives a real terms rise of up to 1%. It comes as the proportion of businesses expecting to freeze pay altogether is set to fall from 12% this year to 5% in 2022.
Melanie Trollip, Director of Talent and Reward at Willis Towers Watson South Africa, said: “Businesses are navigating a tentative recovery from the pandemic, and it is encouraging that many are planning to offer more generous pay rises. 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.”
Some industries plan to be more generous than others. Average pay rises in 2022 are set to be higher in the medical technology (7.1% rise), pharmaceutical (6.1%), and consumer product (6%) sectors. Workers in business consulting (3.7%), energy and natural resources (4.1%), and construction (4.2%) are due to fare less well. (*A full list of sectors is available on request.)
The war for talent has continued despite the pandemic. In 2021, South African businesses tried to motivate and retain the top performers by giving them a pay rise that was 2.5 times greater than for staff on average performance ratings.
Melanie Trollip added: “The pandemic’s economic onslaught has hit some business sectors harder than others, so some are better placed to offer more. The pharma sector stands out as one of the most generous, while rises in the energy and construction sectors may not even match inflation.
“Even though Covid wreaked havoc on our economy, firms still had to compete to attract and retain the top performers, and higher pay rises were part of that strategy. Now that we may be entering a recovery phase, these high performers are especially important for driving business growth.”
320 South African firms took part in the authoritative global Salary Budget Planning Report by Willis Towers Watson (NASDAQ:WLTW), a leading global advisory, broking, and solutions company.
