Survey paints grim picture for future of workers

Three-quarters of businesses in SA are considering cost-saving initiatives such as redundancies and pay freezes as they navigate the economic crisis brought about by the Covid-19 outbreak, according to a survey by one of the world’s biggest insurance brokerage and advisory firms.

Willis Towers Watson (WTW) said 72% out of 412 SA businesses that were quizzed said they were already looking at cost-saving measures, with almost half saying they would completely halt hiring new staff.

Almost a quarter said they considered making selective redundancies, while 41% said they would stop the payment of bonuses. Only four out of 10 business are pressing ahead with pay rises.

The survey, in which respon

BUSINESSES ARE UNDER INTENSE PRESSURE AND ARE LOOKING FOR WAYS TO SURVIVE THE PANDEMIC AND TO PROTECT THEIR STAFF

dents were chosen to roughly reflect their importance to the SA economy, is the latest evidence of the extreme pain that is to beset an economy that was already in recession before the coronavirus outbreak. Job and wage cuts will weigh on consumer demand and the Reserve Bank has said it expects SA’s GDP to shrink 6.1% in 2020.

President Cyril Ramaphosa called a lockdown almost a month ago in a bid to slow the spread of the virus, which has infected more than 2.6million people across the globe and killed more than 180,000.

In SA it has infected 3,953 and killed 75.

Economic activity has stopped, threatening the demise of businesses across SA and job losses that some economists said could exceed 1-million.

“Businesses are under intense pressure and are looking for ways to survive the pandemic and to protect their staff,” Melanie Trollip, director of talent and reward at WTW SA, said.

“Pay freezes are never popular but it could mean the difference between someone keeping their job or losing it.”

The surge in joblessness

across the economy will “darken the outlook of a jobs market that was struggling even before Covid-19”, Trollip said.

She said businesses would be met with a very weak global and domestic economy once SA emerged from the lockdown and that could see a stronger focus on pay inequality.

On top of having one of the highest joblessness rates in the world, SA also consistently scores among the most unequal societies, raising concerns about its sustainability.

PAY GAP

“The gap between what executives and average workers get paid is likely to narrow as pay and bonuses come under pressure and scrutiny,” she said.

In the longer term, SA would see a significant growth in working from home, a trend that had already started to surface even before the coronavirus outbreak, WTW SA said.

Flexible working was already a feature before the lockdown for 52% of SA firms surveyed.

“Working from home was already growing in popularity, but Covid-19 has forced it to become the new norm.

“That behaviour will not be unpicked once the lockdown ends, and businesses will expand their options around working from home. There are many benefits around greater employee flexibility, improved efficiency, and lower real estate costs,” said Trollip.

WTW, which dates back to 1828, has about 45,000 employees in more than 140 countries and has been active in Africa for 50 years, according to its website.

THE SURGE IN JOBLESSNESS ACROSS THE ECONOMY WILL DARKEN THE OUTLOOK OF THE JOBS MARKET