South Africans can look forward to salary increases in 2024/2025. Picture: iStock
There is hope regarding South Africa’s gross domestic product growth, and if it continues, it could be a brighter future for South Africans and their salaries.
The country’s working class can look forward to an average salary increase of 6% in 2024/2025.
This is the view of Dr Mark Bussin, master reward specialist and executive committee member of the South African Reward Association (Sara).
He says salary increases may not be the only consideration in a robust total rewards programme, but they are a cornerstone. “For organisations, they’re also a key factor in business sustainability.”
Dr Bussin adds that salary increases are essential for employees who have become relatively poor over the course of the year due to inflation.
He is of the view that salary increases will help those employees stay ahead of the cost of living and pursue the lifestyle they want.
ALSO READ: Is it possible to become a millionaire on an average SA salary?
Dr Bussin says there are different influences that come into play when setting salary increases, with the starting point being the consumer price index (CPI).
Other factors that employers consider before setting increases include the projected financial performance of the organisation; affordability of the increases; sustainability of the business; extent of salary increases in the previous year; and performance of individual employees, amongst others.
“Understanding these and other factors unique to their business helps employers take the guesswork out of salary increases.”
Sara’s data indicates that increases for 2024, by staff category, will look as follows:
● Unionised Staff – median of 6.25%
● General Staff – median of 6.01%
● Specialists – median of 6.00%
● Management – median of 5.97%
● Executives – median of 5.79%
● CEO – median of 5.70%
ALSO READ: July also better month for salaries in SA
Dr Bussin says the increase percentage above inflation is the employee’s real salary increase. As inflation currently sits at 4.4%, he estimates an increase of 6% which will result in a real salary increase of 1,6%.
“The South African Reserve Bank’s recent reduction in interest rates from 8.25% to 8% also improves the cost-of-living gap somewhat as workers will pay less to service their debt.”
Dr Bussin says it is a thin silver lining as many employees remain over-indebted while others continue to live in what he calls “in-work poverty.”
“We need to aim for a living wage that allows workers to live with dignity.”
ALSO READ: Salga’s wage deal: To pay municipal workers more or to fix collapsing areas?
Even though salary increases are a hot topic, he warns that remuneration and increases do not exist in isolation.
“The country needs growth, and growth needs skills and talent. We have both, but we must unleash them by creating the correct government policy framework and certainty to support it.”
“Therefore, lawmakers need to urgently implement much-needed policy reforms that will boost organisations’ ability to grow and hire unemployed people.”
NOW READ: How to use your pay cheque to get financial freedom
Download our app and read this and other great stories on the move. Available for Android and iOS.
