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 this year, according to salary research from global advisory Willis Towers Watson.
The group’s data shows that the proportion of businesses expecting to freeze pay altogether is also set to fall from 12% this year 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 South African 320 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%)
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, said Trollip.
“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.”
