Pay rise unlikely in 2017 – Survey

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Prosper Ndlovu, Business Editor
THREATS of retrenchment and delays in payment of salaries continue to haunt the economy as more companies opt for restructuring and downsizing operations in order to remain viable, a survey has shown.

In its national salary survey for 2016, Stratways Management Consulting, a Bulawayo-based labour consultancy firm, indicates that salary increases are unlikely in 2017 as companies are generally struggling to pay their workers on time with many battling salary arrears of up to five years.

Workers continue to be on the receiving end as some businesses are folding and owe large sums of money in unpaid wages and salaries.

The survey findings, which were released during a labour update seminar in Bulawayo on Friday, also show that some workers are being cornered to accept pay cuts in order to save their jobs.

“About 60 percent of companies surveyed have engaged in restructuring and retrenchment and most retrenchments have been guided by the minimum retrenchment package of one month salary for every two years worked.

“There are delayed wages in some cases going back five years. Some businesses have lost the capacity to pay wages completely,” reads part of the survey.

“Most employers and employees associations are unlikely to offer any salary increase in 2017 although unions and labour will continue to press for an increase.

“A number of managerial employees have taken benefits and salary cuts to save jobs. On average managerial salary cuts range from 10-15 percent. A majority of organisations surveyed have wages and salary arrears ranging from a few days to more than a year.”

As at October 2016, neither Government, local government, parastatals, manufacturing nor commerce or mining sectors, had increased salaries.

Recent reports indicate parastatals such as the National Railways of Zimbabwe and Hwange Colliery Company Limited actually have salary backlogs of more than a year.

The survey, however, shows that most companies were not being taken to court over delayed pay due to effective communication mechanisms with their workers over the state of their operations.

Industry capacity utilisation also remains subdued due to a myriad of challenges facing the economy although a positive 13 percent increase from 34 percent to 47 percent was recorded in 2016, according to the Confederation of Zimbabwe Industries (CZI).

The survey also warns of negative growth due to the persistent foreign exchange shortages which affect input supplies resulting in erratic production with workers, in some instances, being sent on unpaid leave.

The survey further indicates the labour environment in the country is generally hostile to the worker as many employees are earning below the Poverty Datum Line (PDL) estimated at $500 per month.

A poverty datum line (PDL) represents the cost of a given standard of living that must be attained if a person is deemed not to be poor. Basically, a household’s income should be able to buy the quantities of food, shelter, and clothing, deemed necessary for their basic upkeep.

However, a huge margin exists between the lowest paid and executives. Based on the Peterson method of job evaluation, top executives on the E2 grade earn between $10 000 and $20 000 per month with the lowest paid pocketing between $245 and $360 per month.

The situation is not entirely gloomy with the survey showing that benefits and allowances such as housing and transport remain available for many workers, in particular transport allowance, which is available across industries.

As for managerial employees, most benefits have been adjusted downwards to trim costs although some such as children’s school fees, medical aid and housing, have been hardly tampered with. On the bonus question, the survey indicates that where bonuses are not contractual, most organisations have scrapped them or reduced them or put in place an alternative payment plan.

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