Are salary expectations mismatched with struggling economic performance?

A widening expectation-to-reality gap for employee compensation could prove problematic for South African businesses in 2017.

There is an increasingly significant disconnect between what South African workers expect from their employers and what corporations are reasonably able to provide in a challenging economic environment.

Findings from the company’s latest Global Talent Monitor show that despite stalled growth, South African employee’s expectations around compensation remain high as most (44%) prioritise money above other benefits when looking for a new job. In stark contrast to declining expectations globally, South Africans expect significant increases in base pay and bonuses this year at 7% and 8% respectively.

There is a widening gap between employee expectations and the reality of what organisations can reasonably offer them, which could prove toxic to companies if left unaddressed. South African employers need to make the connection clear between actions, outcomes and rewards in the context of business performance. Organisations must put their communications strategies around pay under the microscope to ensure they are having the desired impact. It is important that employees are rewarded for their hard work and loyalty, if not in compensation then certainly in respect and honesty about pay.

Employees’ outlook on job opportunities in South Africa remains poor amidst the country’s economic woes and high levels of joblessness. Yet, intent to stay with their organisation dropped three index points to 33%, making South Africa the third most active job-seeking nation. With the economy struggling, workers realise that their employers might be in trouble, and are starting to look elsewhere in case their company starts downsizing and jobs are put at risk.

If companies haven’t effectively realigned employee expectations around compensation, workers will harbour bad feelings about how they are recognised and rewarded. They may simply choose to “quit in seat”. They may also be more likely to jump at the first opportunity that comes their way in the New Year – particularly if a higher salary is on offer before speaking to their boss to explore alternative career paths in the business.

Global Talent Monitor data is drawn from CEB’s larger Global Labour Market Survey. The survey is conducted quarterly and is reflective of market conditions during the quarter preceding publication.

Clare Moncrieff is the HR Principal Executive Adviser at CEB (now Gartner).

A widening expectation-to-reality gap for employee compensation could prove problematic for South African businesses in 2017.
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