Like their global counterparts, South African companies and workers are grappling with a worsening economic outlook as we move into the second half of 2022. And as the season for salary and incentive negotiations near, both parties have to grapple with the question of what constitutes fair compensation in light of the prevailing climate.
As much as employers will want to keep pace with inflation, the pressures are many and varied, and margins remain compressed. Companies will likely want to play it safe and hold back on substantial increases and bonuses to keep the balance sheet stable during these uncertain times.
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But that does not mean employees have no negotiating power, and that companies can’t introduce alternative ways of investing in their people to ensure continued attraction and retention of talent, a leadership expert says.
“There is no doubt that there isn’t much extra cash on the table right now, and that companies will need to consider creative ways in which to reward employees, and adjust their compensation policies to ensure they keep their teams in healthy shape while also keeping the bottom line resilient,” says Advaita Naidoo, Africa managing director at Jack Hammer Global, Africa’s largest executive search firm.
The key to making this seemingly impossible equation work, is to introduce (on the part of the employer) or request (on the part of the employee) investment into career development and day-to-day working conditions that will have the dual effect of: easing financial pressures for both parties as well as ensuring improved future career prospects for employees and a stronger talent pipeline for companies.
“The two biggest bargaining chips right now are flexibility and career development. We would all like to earn more money, and most good companies would like to offer their loyal employees increased financial incentives.
“But if money is tight and the outlook less than ideal, companies have to consider how they can attract and retain talent, and employees should know that they have options available to them during negotiations that will benefit them financially and professionally,” says Naidoo.
“Knowing what to ask and what to offer can be a win-win solution in these difficult times, positioning employees for a better professional future as well as an enhanced work-life experience that will be beneficial to everyone.”
Naidoo says some of the alternative solutions on the table for both companies and employees, are as follows:
Flexible work arrangements
Many employers earlier in the year called for an all-hands on deck return to work of most employees. However given that the environment remains dynamic and volatile, and the fact that most infrastructure to allow for successful work-from-home arrangements remains in place, providing greater flexibility can be a powerful incentive.
On the one hand it will reduce costs for both the company and employees, which will lighten the financial burden on both. It will also reduce employee stress and contribute to employee loyalty.
Mapped out career progression
Companies can actively facilitate the career progression of employees, with relatively low-cost investment in the moment, but with the promise of dividends for both company and employee down the line.
One key factor for career growth is exposure to and participation in areas that fall outside of one’s current area of expertise or course of duties. So employees can, for instance, ask to attend industry conferences and events in the coming year, as well as be assigned to different projects or teams, which will allow them to gain experience in different parts of the business.
Another mutually beneficial carrot, is the plethora of incredible online programmes that were developed over the past two years which are accessible globally and will support career growth. Yale and Harvard, for instance, offer exceptional online leadership programmes at a fraction of the cost of traditional MBAs.
Mentorship and coaching
Companies can provide dedicated mentorship to employees; having access to senior executives within an organisation can help emerging leaders navigate disparate issues like corporate politics, career progression, conflict and workplace culture, while also allowing for informal knowledge transfer, development of problem-solving skills in the unique corporate environment and exposure to diverse thoughts and ideas.
Coaching is also more affordable and productive than ever before, through organisations such as Virtual Coaching Partners. Not only does a great coach enhance performance by helping experienced and emerging leaders identify weaknesses or blind spots, but they can also show how to get the best out of individuals and teams, boosting confidence in the process.
Additional time off or sabbaticals
It should go without saying that a break from the stress of work would benefit the individual, especially if it is of sufficient duration to allow for personal pursuits that an employee may not otherwise have time for e.g. volunteer work, travel or completing a course. But the unspoken benefit to the company is that teams will return refreshed, possibly brimming with new ideas; the knock-on effect is enhanced productivity and reduced employee attrition.
Mental health support
The offer of sustainable mental health benefits with the focus on easily accessible, anonymous and ongoing support by mental health professionals – rather than merely the occasional ad-hoc wellness intervention – is another win-win for everyone, with very positive impact for modest investment.
“With relatively low-cost career development solutions that will pay off later for both the company and employee, combined with flexible work solutions and mental health support, it is possible to ensure a continued supportive, collaborative and trusting work environment,” says Naidoo.
“The world is gearing for a tumultuous road ahead, at least in the short-to-medium term, but ensuring employees can be confident that they are going somewhere, the focus on building relationships, staying the distance and using the time ahead wisely can ensure that companies and their teams emerge stronger on the other side once more.”