Keeping with global standards, South African employers are reassessing how pay and benefits decisions are made as cost pressure, governance scrutiny, and transparency developments reshape reward strategies.

Data from the biennial 2025/2026 Remchannel Employee Benefits Guide shows that this reassessment is translating into concrete trade-offs, with employers pulling back from broad, non-statutory extras and favouring total remuneration that can be measured, defended and linked to sustainable performance.

“Employers aren’t walking away from ensuring competitive employee value propositions,” said Lindiwe Sebesho, Managing Director of Remchannel. “They’re being challenged to prove it, not just for attracting and retaining talent by meeting their diverse needs, but to multiple stakeholders. Every element of remuneration, from guaranteed pay competitiveness and performance-based incentives to flexibility, wellness and parental support, now has to justify its cost, its sustainable impact, and its risk.”

What the data reflects, she says, is not a retreat from total reward investment, but a repricing after several years of disruption, as employers test which elements of the employee value proposition genuinely support productivity, engagement and delivery.

“The shift does not reflect a single policy decision or a board-led reform agenda,” said Sebesho. “Rather, it points to a system-wide response to tighter budgets and evolving regulation, including pending remuneration amendments in the Companies Act, which will sharpen remuneration committee accountability for pay and benefit decisions, especially in public and state-owned companies.”

“Management teams are revisiting reward structures under strategic and operational pressures that require skilled talent, while boards and remuneration committees act as the approving and accountable layer, asking harder questions about cost, value creation impact and reputational consequences.”

Discipline rather than deprivation

The 2025 survey captures this recalibration across several dimensions of the employee value proposition. Underpinning it is a growing recognition that reward decisions now sit firmly within the governance framework of organisations, with consequences that extend beyond HR’s traditional mandate of attraction, motivation, and retention of talent.

One of the clearest trends in the 2025 data is the decline of additional guaranteed, cash-like benefits that expanded rapidly during and immediately after the pandemic. According to the guide, formal sign-on bonus policies fell from 52.1% of participating employers in 2023 to 28.3% in 2025.

In practice, this has driven a shift away from paying for promise based on past experience towards paying for actual delivery. “Up-front rewards are increasingly being replaced with incentives that vest only once performance against set targets has been demonstrated. Employers would rather reward after delivery of clearly defined performance outcomes,” explained Sebesho. “Shareholders, in particular, do not support payments for value that has not been created.”

She cautioned against interpreting these changes as cost-cutting for their own sake. “What we’re seeing is a shift towards disciplined execution,” she said. “In some cases, sign-on bonuses were added very quickly for talent attraction purposes without clear measures of impact or fairness, and employers are now correcting that.”

That discipline, she argued, is evident in what employers choose to remove and what they actively protect. “Benefits that underpin employee wellbeing, such as access to healthcare or meaningful retirement provision, continue to be prioritised to mitigate longer-term risk. By contrast, there is a clear reduction in broad, untargeted perks and a reinvestment in benefits that support productivity, culture and retention. This reflects a different set of priorities,” she explained.

Reward decisions under scrutiny

Cost pressure alone does not account for the changes reflected in the survey. Governance and transparency are playing a growing role, with tighter accountability under the Companies Act sharpening scrutiny of how pay and benefits decisions are made and defended.

Sebesho noted that these decisions are now more visible, more contested and more likely to attract public and shareholder attention. “There’s a lot that can go wrong and end up damaging trust, and no one wants to be associated with decisions that carry reputational risk,” she said.

As a result, boards and remuneration committees are placing greater emphasis on measurable outcomes and clearer differentiation, asking tougher questions about why rewards are structured differently across roles and whether those distinctions can be credibly explained.

Reworking flexibility

Hybrid work arrangements provide another example of how post-pandemic experimentation is being reassessed. According to the 2025 survey, 40.7% of hybrid organisations prescribed specific in-office days in 2023. By 2025, 67.4% required at least three days in the office, and 41.3% had increased minimum office day requirements.

“The early assumption that flexibility automatically equals productivity has weakened in some instances,” said Sebesho. Employers have become less confident that work-from-home arrangements consistently deliver the desired outcomes, particularly where accountability and performance measurement are unclear. This has prompted a shift towards clearer rules and stronger links between autonomy and output.

Wellness, with sharper focus

Despite constrained budgets, wellness has not been deprioritised. Employee wellness is ranked as the most important benefit category by perceived importance, according to the latest survey.

What has changed is delivery. Health-related benefits are becoming more targeted, with increased focus on interventions such as cancer screening, fertility programmes and peri- and menopause support, often delivered through medical aid structures or internal programmes. Inclusivity is being addressed more explicitly through policy, with growth in benefits such as same-sex medical aid cover and sick leave linked to gender transition procedures.

By contrast, traditional financial supports such as soft loans and cash advances declined from 40.4% of employers in 2023 to 31.7% in 2025, while 20% of participating organisations have implemented earned wage access, allowing employees to access a portion of wages already earned before payday as an alternative way of addressing financial stress or reducing reliance on expensive debt.

“Wellness is still seen as critical,” said Sebesho. “But employers are being more deliberate about the solutions that have the greatest impact.”

Other key findings from the report

• Maternity benefits: Fully paid four-month maternity leave declined from 58.5% to 41.7%.
• 13th cheques: Prevalence declined from 62.8% of employers in 2023 to 53.3% in 2025.
• Notice periods: 66.7% of employers now differentiate notice periods by seniority, often extending beyond the statutory four weeks for senior management.
• Overtime management: The 2025 survey introduced an overtime ratio to track overtime relative to regular hours, but only 11.7% of organisations currently set formal targets.

Taken together, the findings point to a shift in the fundamental question employers are asking about pay and benefits. “The better question for 2026 is not ‘what more can we offer?’” said Sebesho. “It is ‘what value can we derive, protect and defend for each rand we spend?’”

Employers are shifting attention from intent to outcomes, with benefits increasingly evaluated based on measurable impacts such as productivity, retention, health, and performance, as well as their ability to mitigate risks like burnout or turnover and to be transparently and credibly explained to employees, shareholders, and the public.

“The same discipline is increasingly evident in incentive design, where performance must clearly justify reward,” concluded Sebesho. “What ultimately matters is whether reward decisions deliver outcomes. If they don’t improve productivity or sustainable performance, or if they can’t be explained and defended, they don’t belong in the EVP.”