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EXPLORE THE UPDATED COST OF LIVING REPORT AVAILABLE HERE AT https://www.thehumancapitalhub.com/cost-of-living-in-zimbabwe
It is a fact that in most sectors salaries and wages have not been adjusted to reflect the upward trend in inflation. The challenge for many organisation right now is on what basis should salaries be adjusted? When adjusted how do we make them affordable and sustainable? It is noble to hear people talk about salary adjustment and how people should be cushioned against the rising cost of living. However, organisations need to exercise extreme caution as there is need to balance salary adjustments with business viability.
The best way to sustain higher wages is to pay people based on productivity gains or improvements. In the current circumstances, likely, most of the reported growth in revenue and profit by companies could largely be a result of price movement and not volumes. The danger of making permanent salary adjustments based on a price-driven growth is that it could turn out to be unsustainable in the long term. It is not possible to keep adjusting your prices upwards for your clients to cover wages which in the case of Zimbabwe are largely fixed and guaranteed whether the company performs or not.
This article was written by one of the consultants at IPC
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