South African employers are, on average, giving employees above-inflation salary increases but are reducing the cost of non-statutory benefits, including guaranteed year-end bonuses, fully paid parental leave, and work-from-home concessions, despite some of these benefits being highly valued by employees.
This is according to the April 2026 Remchannel Bi-Annual Salary and Wage Movements Survey when read alongside the latest Remchannel Employee Benefits Guide, published in December 2025. Remchannel is a remuneration research platform and reward management consultancy owned by Old Mutual Corporate whose 2025 and 2026 surveys garnered insights from 60 and 42 organisations, respectively, and each representing more than 400 000 employees.
In a presentation last week covering the two surveys, Remchannel managing director Lindiwe Sebesho said Remchannel’s latest Salary and Wage Movements Survey showed average annual increases granted of 5.43%, which is substantially higher than year-to-date Consumer Price Index inflation of 3.2%. However, in trying to contain overall staffing costs, employers appeared to be offsetting above-inflation salary hikes by reducing or restructuring non-statutory or discretionary employee benefits.
“Our research points to a trade-off in how employers are rewarding and supporting their people,” Sebesho said. “Companies are still funding increases, but the real question is whether employers are cost-effectively structuring remuneration, benefits, and other forms of support in a way that is aligned to what employees value most.”
The 2025 Employee Benefits Guide gives a clear picture of where employers are cutting back, as well as the types of benefits that employees rate highly. Since the 2023 survey, which was conducted in the aftermath of the Covid-19 pandemic, fewer companies are offering:
- Hybrid working models allowing employees to partially work from home – from 86.2% to 78.3%. Of those still offering hybrid models, more are mandating at least three days in the office.
- Fully paid four-month maternity leave – from 58.5% to 41.7%.
- Sign-on bonuses – from 52.1% to 28.3%.
- Guaranteed 13th cheques – from 62.8% to 53.3%.
When surveyed on the types of benefits they value most, employees rated health and related benefits highest, at 90%, followed by leave benefits (88%), group risk cover (87%), retirement benefits (87%), education (85%), maternity/paternity leave (85%), employee wellness programmes (72%), and flexible/hybrid working arrangements (68%).
“Salary increases remain important, but if support is being reduced in areas where employees are under pressure, employers may need to rethink how different elements of reward work together to deliver real value to the people they aim to attract, motivate and retain,” Sebesho said.
“Flexible working arrangements, such as remote work or staggered hours, help employees save on commuting costs while improving work-life balance. Giving people more control over their schedules is often as valued as a pay rise for employees who have to consider the cost of travel and the time it takes,” she said.
Moves towards fairer pay structures
Another trend highlighted by the Remchannel surveys was a shift by employers towards more equitable and transparent salary structures. Sebesho said this may be in anticipation of the introduction of the Fair Pay Bill, a proposed amendment to the Employment Equity Act tabled in Parliament last year, which is currently open for public input.
Among other things, the amendment proposes prohibiting employers from asking candidate employees about their current or past salaries, including a clear salary range in all job advertisements, and giving employees the right to discuss and compare their own salaries.
When broken down into worker groups, the Salary and Wage Movements Survey showed that wage and salary increases are favouring lower-paid workers and that executive pay is moderating. Annual increases for executives averaged 4.93%, down from 5.33% in April 2025, while unionised staff received 5.87%, on average, on basic salary.
“This is a meaningful signal that organisations are showing greater sensitivity to the reputational risks of executive pay outpacing the increases of the broader workforce,” Sebesho said.
Fairer pay practices showed up in other findings:
- 7% of companies conduct an annual fair pay analysis (up from 80% in 2024);
- 2% have a formal written pay transparency policy ((up from about 20%);
- 5% communicate increases via written individual letters (up from 67.5%); and
- 7% manage pay disparities at annual reviews and promotions/transfers.
Sebesho said there were several actions employers could take to boost staff retention and productivity. They included communicating real wage growth to staff, linking bonuses and increases to performance in a clear differentiation framework, understanding the true costs of staff turnover, complying with parental leave minimums, investing in financial education, and instituting a formal fair pay policy.
