Have you ever wondered whether Zimbabwean salaries are reasonable and competitive on a regional level, who regulates salaries in Zimbabwe, why some sectors are more rewarding than others and why some organizations are more attractive than others? The answer is simple, it all comes down to fair and equitable salaries, attractive packages, company culture and how well the industry is performing in terms of productivity and profits.
In accordance with the Labour Act (Chapter 28:01) 1985, the Zimbabwean Ministry has the authority to specify the minimum wage and benefits for any class of employees in any undertaking or industry, for example, according to the NEC for Engineering Industry, the lowest paid employee (i.e. Grade A1) for the period of 1st of March 2023 to 31st of May 2023 is supposed to earn USD240 which can be paid at prevailing interbank rates obtained as at payroll processing dates for respective companies. The Act regulates the conditions of employment and covers the formation, registration, and function of trade unions as well as the enforcement of collective bargaining agreements (CBAs). The Labour Act also ensures that employers cannot force any employee to work under conditions which are below those prescribed by law. Employers who contravene notices by the national employment councils are liable to pay a fine or imprisonment for two years.
Our recent surveys highlight that organisations often review their salaries due to cost of living (72%), retention (72%), market adjustment (68%), organisation performance (65%), internal pay inequalities (25%) and long-tenure (20%). Retention was one main reason that participants highlighted to be the cause of reviewing salaries periodically or on a quarterly basis. Paying fair and equitable salaries is one of the biggest ways to outsmart your competitors as well as run a successful business. Employees are willing to stay when they are adequately compensated, just as they are willing to apply elsewhere where appealing compensation packages are being offered.
Our assessment of the market shows that 62 percent (62%) of the organisations that participated in our national salary and benefits surveys for the first quarter are paying in Zimbabwean Dollars exclusively. 17 percent (17%) of the participants are paying in USD$ currency exclusively and 21 percent (21%) are paying salaries as a blend of ZWL$ and USD$ currency. For those that are paying blended (ZWL$ and USD) salaries, the majority indicated that they have indexed their staff salaries in USD currency and pay 40%-45% of the portion in USD Nostro accounts and the balance is paid at the official prevailing RBZ auction rate at the time of processing the payroll.
According to the United States Agency International Development (USAID), for the period of 2009-2015, the analysis on unit labour costs has shown that labour costs are generally high in Zimbabwe relative to the rest of Africa and Asia. There are huge income disparities between top 8 management and middle management, top management and ordinary workers, and between middle management and ordinary workers within enterprises. An analysis of the wage differentials between the public and private sectors shows a high public wage premium. Compared to Sub-Saharan African countries. Excessive labour costs arise when total compensation for workers is out of line with productivity.
The top 5 biggest companies in Zimbabwe as of August 2022, listed on the Zimbabwe Stock Exchange (ZSE) and Victoria Falls Securities Exchange (VFEX) are Delta with a market cap of USD441 million, Econet with a market cap of USD413 million, INNSCOR with a market cap of USD200 million, Padenga with a market cap of USD173 million and National Foods with a market cap of USD136 million. The biggest prospective sector in Zimbabwe is mining, contributing 12% of the gross domestic product (GDP). The top minerals that are mined are gold, platinum, chrome, coal, diamonds and lithium. Zimbabwe boasts of the second-largest platinum deposit and high-grade chromium ores in the world. State-owned gold buyer, Fidelity Gold Refinery (FGR), a subsidiary of the Reserve Bank of Zimbabwe, has projected gold deliveries to reach 40 tonnes in 2023 mainly due to new gold mining projects coming into production. According to goldpricedata, as at 23 March 2023, the gold ounce price is USD 1,976.28 at international rates. 40 tonnes is approximately equal to 1,410,958.4 ounces, meaning that gold is projected to bring in about USD 2,8 billion.
For all latest salary and benefits survey reports for your sector, as well as directors fees survey reports get in touch with us at info@precisemrc.co.zw for a quote.