Payroll

AXIOMATIC POWER BI JOURNEY: TURNING DATA INTO DECISIONS

Payroll

Unlocking Insights: How Power BI Revolutionized Our Payroll Reporting

WHAT IS POWER BI?

Power BI, a business analytics service by Microsoft, is a powerful tool that transforms complex data into easy-to-understand reports. It is a user-friendly interface and drag-and-drop functionality makes it accessible for users at any skill level, enabling the creation of stunning visualizations without extensive training.

From the Visualizations pane, you can choose how your report will be displayed—whether as a table, matrix, or pie chart. Power BI seamlessly integrates the selected data into your chosen visual format.

The Payroll Connector is a game-changer for integrating payroll systems (like PaySpace) with Power BI. This pre-built tool pulls payroll data directly from PaySpace into Power BI without any messy manual exports or complex data transformations. It covers all the key metrics: gross pay, deductions, taxes, benefits, and net pay—everything you need for reporting and analysis at your fingertips.

GETTING STARTED: FROM SIMPLE TO COMPLEX REPORTS

Figure 1: Your first look when opening Power BI.

Next, select how you want to display your data. Let’s say you start with a simple table that shows some biographical data.

Figure 2: Building a flat table report.

Feel like switching it up? With just a click, you can transform your table into a pie chart, a stack chart, or whatever fits your style!

MAKE IT PRETTY: UNLEASHING CREATIVITY

Power BI is more than just data. It’s your canvas! You can go wild with aesthetics, design awesome dashboards, and create professional-looking reports that dazzle.

If you’re feeling fancy, dive into DAX coding and craft dynamic measures to automate all those manual calculations you used to wrestle with. And Power BI supports almost any file format—Excel, CSV, PDF, JSON—you name it!

OUR POWER BI JOURNEY SO FAR

Since starting this journey in November 2023, Axiomatic has built some seriously cool reports for both our internal and external clients. One standout? A costing report that used to take hours of manual labour—administrators had to extract data from 4 separate reports just to meet the client’s needs! Now, with Power BI, we’ve cut it down to a single report that takes only about 15 minutes to generate. This represents a saving of over 40 hours per month, every month for our payroll team—and we’re just getting started!

One of our proudest accomplishments has been creating consolidated reports for multiple companies. Where payroll systems could only generate one report per company before, Power BI now lets us pull data for over 42 companies with the push of a button!

We’re also diving deep into the fun side of Power BI—exploring its visual tools, cool shortcuts, and everything in between. Our team is on a mission to find smarter, faster ways to eliminate the tedious work of generating monthly payroll reports.

Discover how our team can help you streamline your payroll reporting and unlock valuable insights. Get in touch with us today to learn more about our Power BI services.

Contact Us

Stay tuned for more exciting updates in our next issue. Until then, happy reporting!

The Axiomatic Team

If you found this article insightful, you won’t want to miss our previous piece on Automation in Payroll. It delves into practical examples of how automation can streamline payroll processes, reduce errors, and boost efficiency.

Check it out here: Automation in Payroll: A Practical Case Study Example.

AXIOMATIC POWER BI JOURNEY: TURNING DATA INTO DECISIONS Read More »

KENYAN SALARY INCREASE FORECAST FOR 2025

Payroll

Kenya's 2025 Salary Outlook: Navigating Inflation, Economic Growth, and Employee Retention

“Sharon, please could you give Finance the forecast salary increase percentage for 2025 and the projected increase in our salary cost.”

As we stated in our article dealing with the South African salary forecast for 2025 (Click here to view this article) this request normally sparks a sense of foreboding as it is a clear indication that the annual salary increase process is imminent- with all the associated angst, issues, problems, heated negotiations and hard work that is required.

Formulating salary increases in Africa can be a difficult undertaking for organisations. A salient reason is that most international surveys do not cover many countries in Africa. Moreover, the surveys that do include African countries, often provide information of limited utility which is often out of date by the time it is published.
However, the forecast is not difficult, and we have long advocated that clients adopt a scientific approach to the preliminary salary increase forecast and then use the unfolding economic data over the next few months to update the original forecast. Finally, to incorporate other factors into the decision and then formulate an equitable final salary increase for 2025.

INFLATION

Our departure point in the forecast process is to determine the expected inflation rate for 2025. Salary increases are implicitly linked to inflation; where inflation is one of the most important determinants when deciding on the quantum of the salary increase. Employees want to retain the same purchasing power with their remuneration from one year to the next.
Consistent with the Axiomatic methodology, a “forward-looking” approach must be adopted where inflation is forecasted for 2025, and the proposed salary increase is based on this result. We remain firm advocates of this methodology as it calculates the amount of the salary increase which will be “forfeited” to inflation. The alternative approach, namely the “backwards looking” methodology, uses the previous year’s inflation rate which is “sunk” and thus does not exert an influence on the additional purchasing power given to the employee by granting him or her an increase.
Kenya’s historic inflation rates and the Axiomatic forecast for the remainder of 2024 and 2025 are detailed in the table below:
Normally we state that the risks to the forecast are to the upside- where the risk is greater that inflation could be higher than our forecast. This year, barring any exogenous shocks, we think the risk is possible to the downside because of the strengthening of the shilling (17% appreciation YTD) and lower fuel and food prices.
The Kenyan MPC Committee agrees with our inflation forecast and at the 6 August 2024 meeting stated that “Overall inflation is expected to remain below the midpoint of the target range in the near term, supported by a stable exchange rate, lower food prices with expected harvests, and stable fuel prices”. The mid-point of the range referred to is 5.0% (range of 2.5% to 7.5%).

REAL SALARY INCREASE

The next step in the scientific process is to establish the possible quantum of the “real increase”. A real increase is defined as the increase after inflation has been considered. As an example, if the salary increase is 6.0% and inflation is 4.0%, then a 2.0% real increase has been granted. The quantum of real salary increases in African countries is difficult to quantify and unlike developed markets, there is no “normal” real increase which is targeted. Our approach is that an equitable real increase for employers to target is 1.0%.
The graph below indicates the real salary increase granted to employees in Kenya over the last few years. Cognisance must be taken of the fact that 2022 and 2023 were outliers resulting from the COVID-19 pandemic and the implications of the supply chain shocks experienced in those years.

FORECAST OF 2025 SALARY INCREASE

The scientific and qualitative approach would conclude that an equitable salary increase would therefore be:

However, before we flippantly forward this salary increase to Finance, we must take cognisance of the fact that certain new social security deductions in Kenya this year have significant reduced employees net take home pay.

 1.   In February 2024, the National Social Security Fund (NSSF) employee contribution increased considerably: 

 2.   The Affordable Housing Act established a framework for the collection of a housing levy and the implementation of the affordable housing program for low-income citizens. Each employee is now required to contribute 1.5% of their gross monthly salary.

3.   The new Social Health Insurance Regulations (SHIFU) have been published and will probably be effective in October 2024. These regulations stipulate that a household will pay a monthly statutory deduction contribution to the SHIF at a rate of 2.75% of the gross salary or wage of the households

The current recommended forecast salary increase for Kenya in 2025 is 5.75%.

While this salary increase will provide employees with a real salary increase of 1.39%, it will take account of the increased social security deductions and ensure employees maintain their purchasing power.

The above forecast obviously ignores quantitative factors such as economic growth, union demands, trends in compensation and benefits and of course, the unique financial position of the company. These however should be considered closer to salary increase time.

These however should be considered closer to salary increase time. Over the coming months Axiomatic will continue to update our 2025 recommended salary increase in response to new data, include some quantitative considerations, the possible VAT reduction and discuss some emerging trends we are observing in the market.

Need help navigating the complexities of salary increases in Kenya? Our team of experts at Axiomatic can provide you with personalised guidance and support to ensure you make informed decisions about your 2025 salary increases.

Contact Us

KENYAN SALARY INCREASE FORECAST FOR 2025 Read More »

AUTOMATING THE ANNUAL SALARY INCREASE PROCESS, A PRACTICAL CASE STUDY EXAMPLE

Payroll

Streamlining Payroll with Automation: A Real-Life Case Study.

Recently there have been hundreds of articles published that state that AI, APIs, integrations and automation are the way of the future and will radically transform payroll. While we agree wholeheartedly, the articles fail to furnish practical advice, tangible examples and/or a case study. One is often left wondering how one can take advantage of this technology. Given this, we will publish a series of articles which provide practical examples of how we, and our clients, have harnessed the power of new technology to streamline processes and save money.
A large client wanted to streamline the salary increase process to provide payroll with a mass update and an automated process to deliver salary increase letters to the employees.
The entire process was divided into 3 phases:
  1. Mail merge: The creation of a personalized, signed, PDF increase letter, based on various predetermined formats including separate templates for the subsidiary companies.
  2. Distribution: The upload of the increase letter, onto the ESS (Employee Self Service) Portal, using API. The employee can then view and download the letter in a secure environment.
  3. Payroll update: A mass update to advise payroll of the new salaries.
Given the relatively large number of employees, it was a prerequisite that the process had to be automated and given the fact the data was salaries, the outcome had to be zero errors.

A helicopter summary of the process flow which Axiomatic adopted was the following:

  1. Build the templates: The fields on the Excel sheet were mapped to the Word salary increase document. The templates were split per manager with a pre-populated manager’s signature. Each division and/or subsidiary had a unique salary increase letter.
  2. Run the mail merger macros: The macro was run for each manager’s separate folder.
  3. Quality control:Quality control was essential and spot checks were done to ensure accuracy. Further, comprehensive testing was done to ensure that the documentation was in the correct format for the API transfer.
  4. API: 
  • Ensure that the relevant platforms are ready for the data transfer.
  • Test runs were processed, and verification testing was done.
  • Live runs were then processed, uploaded and checked in both the transfer applications and the payroll platform.
  • Final spot checks were conducted to verify that the correct documentation was uploaded on the correct employee profiles.
The process concluded with a log file report which facilitated an audit of the headcount and the letter generation.
There is little doubt that the salary increase process is often a manual, laborious, time-consuming, and taxing project for HR and payroll personnel, which is prone to errors. The automation of the process not only saves time but increases efficiency by reducing the possibility of errors in the process.
The use of automation and APIs is often considered to be restricted to the integration of real-time data exchanges between payroll and the HRIS, T&A or Finance systems. This is a tangible example of how APIs can streamline other processes such as the annual salary increase process.
The client is a company that has a culture of exploring and embracing tech automation, and we were fortunate to partner with such a forward-thinking company on an exciting project of this nature.

To learn more about how automation can streamline your payroll processes, contact us today to schedule a consultation with one of our payroll experts.

Contact Us

AUTOMATING THE ANNUAL SALARY INCREASE PROCESS, A PRACTICAL CASE STUDY EXAMPLE Read More »

SOUTH AFRICAN SALARY INCREASE FORECAST FOR 2025

Payroll

Understanding the "Real Increase": Forecasting Salary Hikes Beyond Inflation.

“Sharon, please could you give Finance the forecast salary increase percentage for 2025 and the projected increase in our salary cost.”

This request normally sparks a sense of foreboding as it is a clear indication that the annual salary increase process is imminent- with all the associated angst, issues, problems, heated negotiations and hard work that is required.
The forecast is not difficult, and we have long advocated that clients adopt a scientific approach to the preliminary salary increase forecast and then use the unfolding economic data over the next few months to update the original forecast. Finally, to incorporate other factors into the decision and to then formulate an equitable final salary increase for 2025.

INFLATION

Our departure point in the forecast process is to determine the expected inflation rate for 2025. Salary increases are implicitly linked to inflation; where inflation is one of the most important determinants when deciding on the quantum of the salary increase. Employees want to retain the same purchasing power with their remuneration from one year to the next.
Consistent with the Axiomatic methodology, a “forward looking” approach must be adopted where inflation is forecasted for 2025, and the proposed salary increase is based on this result. We remain firm advocates of this methodology as it calculates the amount of the salary increase which will be “forfeited” to inflation. The alternative approach, namely the “backward looking” methodology, uses the previous year’s inflation rate which is “sunk” and thus does not exert an influence on the additional purchasing power given to the employee by granting him or her an increase.

Axiomatic’s inflation forecast for the remainder of 2024 and 2025 is detailed in the table below:

Our forecast for 2025 is closely aligned with the MPC Committee’s forecast of 4.4% which they predicted at the 18 July 2024 meeting. Importantly, 4.5% represents the mid-point of the MPC’s 3.0% to 6.0% target range and the target percentage they want to anchor in terms of market expectations.

SA Reserve Bank Governor Lesetja Kganyago recently said, “What matters for the future is what the outlook for inflation is. Our forecast is that we will be 4.5% in this coming quarter. Some of the months we might even be below 4.5%. But what matters is the next three quarters in the New Year. And at the moment it looks like we will be 2025 averaging the 4.5% that we are targeting.”

Normally we state that the risks to the forecast are to the upside- where the risk is greater that inflation could be higher than our forecast. This year, barring any exogenous shocks, we think the risk is to the downside because of the strengthening of the rand and lower fuel and food prices.

REAL SALARY INCREASE

The next step in the scientific process is to establish the possible quantum of the “real increase”. A real increase is defined as the increase after inflation has been considered. As an example, if the salary increase is 6.0% and inflation is 4.0%, then a 2.0% real increase has been granted.

The historic methodology adopted in South Africa, when determining an equitable salary increase in the past, was to add a 2.0% real increase to the forecasted inflation figure. However, there has been a discernible trend over the last few years of lower real salary increases being granted. This assertion is corroborated by the 5-year moving average in the graph above, which has been steadily declining in recent years. One must recognise that 2022 and 2023 were an anomaly, as inflation increased to higher levels than those envisioned when increases were determined at the beginning of the year, reducing the 5-year average.

The conclusion of the analysis is that a 1.0% real salary increase is the “new normal”.

FORECAST OF 2025 SALARY INCREASE

The scientific and qualitative approach would conclude that an equitable salary increase would therefore be:

The current forecast salary increase for 2025 is thus 5.50%.

The above forecast obviously ignores quantitative factors such as economic growth, union demands, trends in compensation and benefits and of course, the unique financial position of the company. These however should be considered closer to salary increase time.
Over the coming months Axiomatic will continue to update our 2025 recommended salary increase in response to new data, include some quantitative considerations and discuss some emerging trends we are observing in the market.

Stay ahead of the salary increase curve with our strategic guide, contact us to access our latest insights and ensure your business stays on top!

Contact Us

SOUTH AFRICAN SALARY INCREASE FORECAST FOR 2025 Read More »

BIRR DEVALUATION AND THE IMPLICATIONS FOR 2025 ANNUAL SALARY INCREASES

Payroll

Ethiopia's Birr Float Fails to Buoy Currency: IMF and World Bank Funding Secured, but at What Cost?

In mid-July we posted an article “If Ethiopia devalues the Birr, what is the impact on employees”. In that article we stated that we were of the opinion that a devaluation of the birr was imminent, a currency adjustment of 40% was expected and that this would have inflationary consequences. Importantly, this would further erode the purchasing power of employees given that a negative salary increase was granted for 2024.

On 29 July 2024, Ethiopia floated its currency to ease foreign currency shortages, attract foreign investment and most importantly, to secure over $10 billion in IMF and World Bank funding.
On its website, the National Bank of Ethiopia announced that banks can now buy and sell foreign currency at freely negotiated rates and that, “The central bank will make “only limited interventions to support the market in its early days and if justified by disorderly market conditions.”
The birr immediately depreciated from 58 to the US dollar to 80- the 40% depreciation we forecast in the July article. However, since then, the birr has depreciated further to 108; a whopping 86% depreciation. Interestingly, 110 was the black market rate prior to the devaluation- the market always knows best!!!
There is little doubt that because of Ethiopia’s heavy reliance on imports, this will push inflation higher in the next few months. The inflation rate of 18.6% recorded in July 2024 was the lowest level since December 2020 but we can assume that future increases must be expected.
The government appears to recognise this danger, and the central bank governor Mamo Mihretu emphasized that Ethiopia’s restrictive monetary policies differentiate it from other African nations that have faced challenges following similar reforms and that as an immediate measure, they will temporarily subsidise essential imports like fuel and medicine.
The danger of inflation increasing over the next 6 months obviously makes formulating an equitable 2025 annual salary increase difficult to forecast at this stage. At this juncture, it is impossible to forecast the inflationary impact of the devaluation. The initial departure point is that inflation will not continue to recede below 19.0% and this should be factored into the increase decision.
We will continue to monitor inflation in Ethiopia over the coming months and when we are confident that we can model the future trajectory of inflation, we will communicate our recommended 2025 annual salary increase.

Concerned about the impact of inflation on your business or employees? Axiomatic can help. Contact us to discuss tailored solutions for your organization.

Contact Us

BIRR DEVALUATION AND THE IMPLICATIONS FOR 2025 ANNUAL SALARY INCREASES Read More »

If Ethiopia Devalues The Birr What Is The Impact On Employees

Payroll

If Ethiopia Devalues The Birr What Is The Impact On Employees

Ethiopia on the Brink: The Looming Threat of Currency Devaluation

Ethiopia has faced significant economic challenges in recent years, including foreign exchange shortages, a high debt burden, and inflationary pressures. One policy measure under consideration to address these issues is the devaluation of the Ethiopian birr.

The Ethiopian economy has been grappling with a balance of payments crisis for several months, leading to a series of setbacks. The lack of flexibility in the Ethiopian Birr’s exchange rate and the concomitant currency shortage has resulted in the currency experiencing an annual depreciation of more than 20% since mid-2018. The currency shortage has resulted in a black market (parallel market) developing, where the exchange rate is approximately 110- 120 to the US dollar compared to the official rate of 57.

Ethiopia has not received any IMF funds since 2020 and its last lending arrangement with the fund went off track in 2021. The IMF has not said that currency reform is a prerequisite to continued funding, but it is widely expected that the government will devalue the birr in the immediate future to appease the IMF and gain access to much-needed funds. 

If one considers that Egypt devalued the pound by 38% in March to secure a large IMF loan and Nigeria devalued the naira by 37% in January, one could safely assume that a 40% devaluation of the birr is a rational forecast. 

While devaluation can offer some economic benefits, it also poses significant risks, particularly with regard to employers, employees and inflation: 

  • Imported Inflation: Ethiopia is heavily reliant on imports for various goods, including fuel, machinery, and food. Devaluation would make these imports more expensive, directly increasing the cost of goods and services in the domestic market. This imported inflation can lead to a general rise in prices.
  • Cost-Push Inflation: As the costs of imported raw materials and intermediate goods rise, domestic producers may increase their prices to maintain profit margins, contributing to cost-push inflation.
  • Wage-Price Spiral: Higher inflation can lead to demands for higher wages as workers seek to maintain their purchasing power.

Inflation in Ethiopia is already high and the impact of negative salary increases on employees in the country was dealt with in our article, “Are your employees in some African countries moaning about salaries”

Ethiopian inflation has come down over the last few months thus providing employees with some relief. However, the danger exists that if the currency is devalued, that inflation increases significantly in the ensuing months. This will further erode the purchasing power of employees.

The possible devaluation of the Ethiopian birr presents a complex policy decision with potential benefits and significant risks. While it could help address foreign exchange shortages and improve export competitiveness, the risk of exacerbating inflation and the purchasing power of employees is substantial. Employers must be aware of this development and formulate an action plan if inflation increases significantly. 

Concerned about the impact of inflation on your business or employees? Axiomatic can help. Contact us to discuss tailored solutions for your organization.

Contact Us

If Ethiopia Devalues The Birr What Is The Impact On Employees Read More »

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