14-05-2025
Same desk, shrinking pay cheque – SA's declining job turnover isn't a sign of stability
When employees stay put, it's often seen as an indication of loyalty or satisfaction. In South Africa's labour market, where the turnover rate has shrunk to 13.5%, the decision-making behind the data may be more desperate than devoted.
According to Remchannel's April 2025 Salary and Wage Movement Survey, the overall turnover rate is at its lowest since 2021. At face value, this might sound like good news for employers struggling to retain scarce skills in a constrained economy.
'We have noted a decline in the overall labour turnover,' Lindiwe Sebesho, MD of Remchannel, said. 'There could be various reasons for that. We are seeing that the market is not producing a lot of new job opportunities.'
Catch up
Old Mutual Corporate Remchannels' salary and wage survey
This survey tracks pay and turnover trends across South Africa's formal job sector. Remchannel, a remuneration research consultancy under Old Mutual Corporate, surveys companies twice a year to help them plan salary increases and retention strategies.
The latest survey, released on 13 May, captured insights from 51 companies representing 322,000 employees.
Resignation leads the exit wave
Despite the fall in overall churn, the survey indicates that resignation remains the biggest cause of termination costs, nudging up from 37% to 39% over the past year.
That 39% refers to the proportion of terminations where the employee voluntarily quit.
Sebesho said that the reason for those resignations was probably due to the high level of financial pressures in the market that employees faced.
Resignation remains the leading cause of staff turnover in 2025, accounting for 39% of exits, according to Remchannel data. (Graph: Remchannel).
A South African Depression and Anxiety Group survey last November showed that 61% of employees wished they could afford to quit their job.
The pool of opportunities has shrunk, particularly for mid-level to entry-level workers. Sebesho said organisations needed to stop assuming salary hikes alone would stem the talent leak.
'Our recommendation for employers is really to move on with the times from a flexibility and choice perspective,' she said. 'We recommend providing a comprehensive, fair, competitive pay package to employees… within that, they [should be] enabled to tailor their [payment structure], especially the benefits aspect, to talk to their needs.'
Pay increases do not beat the cost of living
In theory, salary increases are staying ahead of inflation, averaging 5.8%. The gap between the two is narrowing faster. Last year, the salary increases granted in Remchannel's survey averaged 6.09%.
Now, companies are reining in their payroll spend as they face their own cost crunches.
'There is a narrowing of that gap between inflation and the actual [salary] increases granted. That talks to refinement strategies by a lot of organisations who too are under a bit of cost pressure,' Sebesho said. 'The real cost of living has been much higher than the actual CPI that we see.'
To address the growing financial pressures, it's essential for businesses to adopt innovative and integrated employee benefits that help ease the financial strain, explains Blessing Utete, managing executive of Old Mutual Corporate Consultants.
'Companies that take a holistic approach – addressing not just pay, but the overall financial wellbeing of their employees – will not only help employees feel valued, but also strengthen their ability to retain talent in a competitive job market by enhancing the perceived value of their company's employee proposition.'
'This could mean offering flexible working arrangements, which save employees money on commuting, or implementing solutions such as earned wage access, wellness programmes and other financial counselling to help employees better manage their finances,' he says.
The pay pinch persists. Average salary increases for 2025 continue to lag behind South Africa's consumer price index, leaving employees with less spending power, Remchannel data shows. (Graph: Remchannel)
Sebesho stressed that while salary increases had outpaced inflation, productivity-linked differentiation remained lacking, with only 19.6% of employers conducting regular performance reviews.
Catch up
How does this affect you?
Job security is up, but opportunities are down. The job market is tight, with fewer new roles opening up.
Unemployment remains high. Even if you have a job, moving up or sideways is harder than ever.
The cost of living still bites. Despite inflation easing, essentials are outpacing salary increases, leaving many workers worse off in real terms.
Flexibility is under threat. If your employer is pulling back remote working options, you may have less say than a year ago.
The canary in the workplace coalmine
Perhaps the most telling sign of discontent is a lack of flexibility.
Post-pandemic lessons are fading fast as many organisations roll back remote work privileges. 'It's understandable that a lot of organisations believe that to create collaboration, people need to interact in person,' Sebesho said. 'But the flexibility should ideally not be taken away completely, especially for people who are performing.'
Salary increases are stretched even thinner for employees who need to bear the brunt of increased commuting and other work-related expenses.
Sebesho also urged employers to consider not just financial remuneration, but also how benefits were structured and communicated, especially for younger workers who often neglected long-term planning.
Skills mismatch, stalled mobility
South Africa's job market remains unforgiving. Unemployment is stubbornly hovering above 32% and youth unemployment even higher at 46.1%, according to the Quarterly Labour Force Survey Q1 2025.
'It's very important that there is a way of addressing the [skills mismatch],' Sebesho said. 'It's a very important aspect of making sure that you are training your people, ensuring you address those skills mismatches, also contributing towards the long-term sustainability of our economy.' DM
