In October, 2017, the United States lifted a twenty-year trade embargo with Sudan. Since then, the country has been experiencing economic volatility culminating with a major devaluation of the Sudanese pound (SDG) at the end of January, 2018. On January 31, the exchange rate depreciated from 6.7 SDG to 18.72 SDG per US dollar (a devaluation of about 180%) and has held steady around 18 since then. On the parallel market, the exchange rate was 38 SDG per US dollar as of February 25 (a difference of 75% over the official exchange rate).
Sudan has been struggling economically since the secession of South Sudan in 2011, which took 75% of the country’s oil output, as well as erratic anti-government protests following a sudden surge of food prices and a hard currency shortage affecting the country’s imports. During this same period, inflation has also increased, with official government estimates around 25%; “real” inflation is estimated at 50% or higher by non-government sources.
Given the volatility employees are facing, how should employers react with respect to compensation?
With the rapid turn of events, a few employers have already reached out to us to find out how to best respond. Birches Group recommends that every employer in Sudan should have a Special Measures Policy in place that outlines the proactive steps they will take when unforeseen and uncontrollable events occur. A Special Measures Policy allows employers to act quickly and make informed decisions based on specific triggers and processes, while still adhering to a market-based approach to compensation. Most importantly, a policy provides clarity to both employees and managers.
A key part of managing special measures is to keep apprised of market changes. Birches Group is conducting a Special Measures Survey for employers in Sudan, the results of which will provide employers with insights which can be used to inform decisions about salary adjustments for the next several months. To join the survey, just follow this link. There is no cost for participation, and detailed results will be shared with all participating employers.
Together with the results of the Special Measures Survey, employers also need a reliable source of market data. Birches Group publishes updated compensation and benefits survey data in Sudan three times a year, in April, July and October. Subscribers get access to all updates released during their subscription period, providing clients with current information on market movement when you need it.
Birches Group can also assist employers in developing their own Special Measures Policy, to help address not only high devaluation, but also inflation and other non-economic events such as natural disasters.
For more information, please contact us.