Companies pay bonuses despite tough markets
End-of-year bonuses are on the cards, for both staff and top executives, at many of SA’s leading companies – despite money not being as plentiful as it has been recent years. Debbie Goodman-Bhyat tells us more.
Throughout the year, many companies have been faced with the prospect of a bleak festive season as news broke of tough trading conditions, the chance that packages would be frozen and bonuses being slashed. In SA, top staff have felt ongoing pressure on their packages as salaries and bonuses have taken a continued battering from the ripples of the 2009 financial crisis.
Although the economic environment remains strained, the latest Jack Hammer Corporate Survey reveals that companies are sticking with their bonus culture – and their obligations – even though company performance may be tepid.
Why is this?
“All respondents indicated that their junior and mid-level staff would be receiving end-of-year bonuses”, says Debbie Goodman-Bhyat, MD of Jack Hammer. “But what needs to be kept in mind is that many companies are contractually obliged to disburse 13th cheques regardless of performance.
“I would not say that the response indicates an easing of the extreme belt-tightening experienced over the past few years. Rather, companies have recognised that to withhold the expected 13th cheque because markets are tough becomes a big issue with staff morale and ultimately productivity and staff retention.”
Results of the survey indicated that in all sectors, performance or profit-share bonuses would be paid out to senior staff where individual and company performance targets were met. However, the expected sums are set to be smaller than before the global financial crisis.
“Since then, bonus sums have consistently remained weak. The bonus structures, formulae and ‘potential’ have not changed, but the amounts disbursed have, in almost no instances, gone back to pre-2008 highs,” says Goodman-Bhyat.
“Nevertheless, we are still hopeful because we still have executive candidates discussing their bonus ‘potential’ and the sums they used to receive three or four years ago when negotiating offers with a new employer. However, the new reality has set in and a ‘new normal’ in terms of bonus pay-outs is emerging.”
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Author: Debbie Goodman-Bhyat is the founder and managing director of Jack Hammer Executive Headhunters.Debbie has received a BA.LLB from the University of South Africa. Debbie specialises in Executive searching in: financial services, retail, FMCG, engineering, resources, oil & gas, biotech and pharmaceuticals. |
