Employers in South Africa have lost the upper hand as workers move to hybrid and work

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Professional services firm PwC notes that the world of work in South Africa has changed dramatically some two and a few years after the Covid-19 pandemic.

A majority of workers who have been working remotely as a result of the pandemic say they are more productive and have become accustomed to better quality and integration of work and life. Where this balance is threatened and there is no room for negotiation with the employer, they will drop out, according to PwC.

Recent research from PwC shows that in the wake of the pandemic, employees feel strongly about their circumstances and are ready to ‘test’ the market where their current employers are no longer meeting their salary expectations and work agreements.

The truth is, workers with specialized skills and training are in high demand — and they know it, according to the consultancy.

“For the most part, it seems that executives have a good understanding of why their employees are looking for jobs elsewhere; in 2021, 34% of executives said employees left because of a lack of flexibility offered by their current employer.

“In reality, the flexibility that today’s employees need relates not only to how, when and where they work, but also to how they are rewarded. the reasons most highly ranked by employees for wanting to change employers.”

The Great Resignation poses a major human capital risk for lagging companies; a trend that shows no signs of slowing down yet, according to PwC. The largest increase in the number of redundancy applications is in the 30-45 age group, with an average increase of more than 20% between 2020 and 2021.

“This is cause for concern as this is an age group where many employees are senior managers and are expected to hold leadership positions. Their dismissal not only poses an immediate problem (because senior management is the most expensive to replace20), but also affects succession planning. Of course, the importance of retaining talent at this level cannot be overemphasized.”

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A 2020 analysis by McKinsey and Co shows that the potential for remote work is highly concentrated among highly skilled, highly skilled workers in a handful of industries, occupations and geographies – when considered in the context of layoff rates in the senior ranks as remote work is what these employees want to get the best out of themselves, it makes sense to think about it.

What these statistics fail to take into account, however, is how a lack of flexibility in work and/or compensation arrangements affects employees who stay rather than leave, according to PwC.

Employees who feel that their job or how they are rewarded are not “worth it” naturally have lower morale; this can have a variety of effects, such as reduced engagement, poor communication, and decreased productivity.

With inflation rising and a system of inflation-linked pay increases, a monetary value can be attached to an employer’s inflexibility, helping to quantify why old plans just don’t work for some workers, the consultancy said.

“Of course, this cost concept is compounded by the time employees feel like they’re wasting traveling to and from the office when they could use these extra hours — and money — in other more satisfying and meaningful ways.”

Employee retention

PwC noted that when it comes to retaining employees, money remains the most important factor (71% of employees cite it as their number one reason for changing jobs), but money alone is not enough to retain employees, which almost as likely to cite non-monetary factors – such as getting a job, being able to be yourself at work, well-being, choosing when and where to work – as their reason(s) for starting a business. want to leave.

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Managing human capital in the 21st century requires innovative motivation and reward methods, it said.

“We believe that the traditional goal of total compensation – to attract, retain and motivate employees – still holds true, but employees have come to value (and demand) more than just money,” said PwC.

Understanding the power of the workplace—particularly the recent shift in favor of workers—can help employers re-energize their workforce, unlock the power of their people, and achieve bolder goals. Companies seeking to retain talent must balance their strategic and operational goals with changing employee expectations.

“This is because there is currently a unique opportunity to transform work and deviate from the status quo. Only by redesigning work and addressing pay issues can organizations continue to drive growth, better anticipate uncertainty and create a workplace that top talent wants to participate in.”

Hybrid working is here to stay, says PwC. Companies need to act quickly to define their hybrid work model, make changes to processes and operational models, review strategic planning and, most importantly, rethink the compensation plans that all work together to attract and retain talent.

Companies seeking employees are refining employee value propositions, focusing primarily on business goals and leadership, the consulting specialist said. “While those are important, they can expect candidates to negotiate hard for what they now see as table interests: competitive packages and perks coupled with flexibility and comprehensive benefits such as career growth and upskilling opportunities.”

It said that while traditional models of total compensation primarily took into account market benchmarks, cost analysis and efficiency in administration, newer models focus on employee-centricity, seeking synergies of career development, performance, alignment of organizational value, purpose and allowing a certain level of value-based personalization of rewards and benefits.

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“Effective total compensation in the future means fully understanding your workforce, defining what is important to the company and them, and adapting the approach to compensation. Modern solutions are built on digital platforms that provide intelligent analysis of employees
preferences in a data-driven way.

“Not only do these enable hybrid work, but they can also ensure there are sufficient governance processes in place to manage and track progress over time and to avoid close bias when it comes to promotions25 – some of such systems provide useful reporting and analytics dashboards to gain insights and help rapid responses to evolving cases,” said PwC.

Continued investment in technology will go hand in hand with evolving human resources policies, as has been the case for some time.

No matter how sophisticated a total compensation model is, employees can only appreciate the value of the total compensation package if its benefits – and how competitive the unique offering is compared to the market – is clearly communicated to them. Work appointment and total pay strategies going forward will require a higher level of employee engagement than ever before, it said.

“Employers no longer have the upper hand and simply rely on guaranteed wage increases as their retention strategy – today’s employees seek a higher degree of work-life integration, and this is a negotiation process,” PwC said.


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