updated 8:56 PM, Aug 2, 2020 Africa/Johannesburg
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What are you doing to prepare your business and employees for the downturn in the economy?

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.


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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Gary Watkins

Gary Watkins

Managing Director


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T: +27 (0)10 035 4185 (Office)

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