| What are you doing to prepare your business and
employees for the downturn in the economy? Impact on Wage
Increases
By now, the majority of Sectoral Determinations as well as
Bargaining Council Collective Agreements have linked annual
increases to CPIX, with variations of CPIX plus X% increases being
implemented.
This all seemed acceptable when inflation was 6% or 7%. With
projected inflation being 12% in the near future, wage increases are
now reaching levels last seen in the 1980's. It is not inconceivable
that wage increases will soon be in the region of 15% - 17%.
Talent Retention
Employees who occupy senior or skilled positions, or who possess
so-called scarce skills (CA's, Engineers, Economists, Artisans etc)
will see the balance of power shift in their favour in "demands" for
annual increases in remuneration packages. Companies may find that
they will need to accede to these requests simply to retain critical
skills within their organisations.
Technology
The increasing cost of labour (along with associated costs of
benefits) will see the opportunity cost of implementing costly
technological solutions increasingly reduced. Will HR become the
first victim of this process?
Mergers and Acquisition / Joint Ventures
Organisations will increasingly see the cost benefits of either
merging with competitors or acquiring them. The opportunity to
reduce costs, utilise scare skills and talent and share
technological resources should be sufficient reason to increasingly
explore these avenues.
- Retrenchments
- Reduced Consumer Demand
- Life Skills for Employees
- Recommendation
(this is a work in progress. Please return for more discussion
around this topic, or send us your views) |
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