Salary Trends in 2023
High unemployment rate, inflation and red tape are some of the barriers standing in the way of individuals getting higher salaries in 2023.
It has been three years now since the Covid-19 pandemic arrived and caused havoc in South Africa and the rest of the world. The lockdown that was enforced led to many losing their jobs or having their salaries cut.
Are salary increases likely?
Salary increase decisions may be affected by factors which contribute towards a country’s economic downfall which may impede employers’ ability to make favorable increase decisions such as economic growth.
Despite the dip from last year’s projections, 2023 compensation hikes remain above those from 2022, which averaged 3.4 percent for annual merit increases and 3.8 percent for total increases. Not only is that a bump from 2022, but the 2023 figures represent the largest increases employers have provided since 2008.
Pay increases varied significantly by industry. A number of factors are likely driving more aggressive compensation strategies, from ongoing high inflation to the competitive labor market, which is still strong despite signs of slowdown in some industries.
Several regions are planning for higher salary increase budgets in 2023, based on the latest figures from the second edition of Aon’s 2022 Salary Increase and Turnover StudyOpens.
With pay transparency legislations in place, employees have more data than ever to assess their compensation in the external market. This will continue to put more pressure on employer programs, and, combined with a continued tight labor market, reinforces the need for continued focus on competitive and equitable compensation.
External data is one part of the story for developing a salary increase strategy in a volatile and uncertain environment. The key is to contextualize salary increase planning surveys with historical analysis and the unique circumstances of your own industry and organisation.
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