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Psychology Consultants (IPC) carried out a survey on payment of salaries in
forex. The aim of the survey was to determine the prevalence of payment of
salaries in hard currency and how companies are financing these practices.
A total of 83 HR practitioners from
different organisations and economic sectors participated in this survey.Most participants were from the financial sector (19%) followed by
mining sector (10%) and Non-Governmental Organisations (10%).
are making adjustments to salaries to cushion their employees against the loss
Our findings suggest that 37% of participating organisations are paying their employees in forex. When we analysed which sectors are predominantly paying salaries in USD we noted the following:
You can request for the detailed report to see the other sectors covered by the report.
organisations that are paying in USD are paying relatively the same percentage
of basic salary to all levels of staff (junior staff to Executive staff). Our
findings suggest that companies are paying between 5% – 100% of basic salaries
in USD. Most companies are paying between 20% – 50%. Participants said they
will generally be reviewing their salaries more frequently (quarterly).
organisations that reviewed their salaries this year said the major
consideration is inflation (74%) followed by those that said company performance
(39%) with exchange rate (19%) being the least. Very few companies have pegged
their salaries to the exchange rate. Companies seem to be opting to pay in USD
general trend emerging is that organisation that export their products or
receive international donor funds/ grants are paying their employees either
partly or fully in forex.
are only beginning to build meaningful cashflow in USD. Most organisations
(46%) said they earn less than 25% of their total revenue in USD from local
trading. 57% of the participants in this survey said they earn less than 25% of
their total revenue in USD from exports and only 21% said they earn 100%
revenue from exports.
need to earn foreign currency for them to be able to pay salaries in forex. The
call by some trade unions and employee representatives for employers to pay in
forex will simply be impossible to meet if the employers do not earn foreign
Employees need must be weary of their ability to pay, as well the sustainability of paying salaries in forex. We advise that if an employer wishes to pay salaries in forex but however realise that they cannot commit to regular monthly payment; paying discretionary once-off forex payments would be more feasible. However, before making any such payment, the employer must clearly communicate to employees that is a discretionary once-only payment – so as to manage expectations.
of the calls by Government for business to desist from the basing their prices
against the United States Dollar, businesses seem to be increasing denominating
or linking their budgets and prices to the USD. The implication is that the
economy is increasingly re-dollarising. We are anticipating that this trend
will increase as businesses seek to safeguard themselves against erosion of
value through inflation. If this trends continues as we are anticipating, we
are also likely to see more employers starting to pay either in hard currency
or the RTGS equivalent. What is not yet clear is if employers will maintain the
face value of previously denominated USD salaries of if they will make changes
to these salaries.
Memory Nguwi is the Managing Consultant of Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting firm. Phone 481946-48/481950/2900276/2900966 or email: email@example.com or visit our website at www.ipcconsultants.com
This article was written by one of the consultants at IPC
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