Grant Thornton’s International Business Report, suggest that South Africans will receive higher wage increases than workers in most other countries in 2013.

The report which is based on interviews with 3450 chief executive officers in November and December 2012, appears to indicate that 68 per cent of South African businesses will increase salaries in line with inflation this year.

More than 26 per cent of South African business will increase wages by more than inflation, and only 5 per cent will not increase wages at all. In the remaining BRIC countries (Brazil, Russia, India and China), only 15 per cent of businesses are likely to offer above inflation wage rises.

“South Africa’s labour unions and collective bargaining councils ensure that employees get salary increases every year, which sets the tone for the private sector,” managing partner of Grant Thornton Cape, Ian Scott, said in a statement.

“However, while pay rises are certainly a necessity to help eradicate poverty concerns, unrealistic wage hikes will only bring added pressure to an ailing economy,” Scott added.

Scott voiced concern about the skills shortage epidemic, which is exacerbated by lack of qualifications and experience. “South Africa urgently needs to address the enormous dichotomy between the skills shortage and unemployment,” he said.

“We need to find innovative solutions, for example, initiatives that allow a percentage of the total workforce to be treated more flexibly.”

The report also showed that 43 per cent of the country’s businesses took on more staff and in Gauteng this figure was 48 per cent. That level is similar to increases for other BRICS countries, which averaged a 45 per cent increase.

Another area where South Africa performed well, was in relation to staff retention. “When questioned about staff retention, more than a third of SA businesses (37 per cent) experienced no staff retention problems, while only 7 per cent of BRIC businesses claimed the same,” said the report.

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