Almost one in three working people in South Africa earns less than the national minimum wage. Is this a good salary ?
This is according to a south africa salary benchmarking survey by Giraffe, an automated recruitment platform.
“Reducing poverty and inequality – and boosting employment – have long been on the agenda of South Africa’s development policies and programmes. However, South Africa has the highest level of inequality in the world – and significant effort will be needed to address this,” said the company at the launch of the report on Tuesday.
According to the report, the average salary for working South Africans is R6,400 a month.
Retail is the biggest industry, employing 18% of the workforce – but is also one of the worst-paying, with 40% of workers earning below minimum wage.
The next biggest employer is the call-centre industry, which employs 11% of the workforce.
Banking and IT pay some of the highest salaries, but employ only 8% of the working population.
Not all of the industries require high-level qualifications. The construction industry for instance pays welders and boilermakers an average salary of R11,500 a month.
Giraffe said the living wage – income required for a dignified quality of life – is R6,570 and 70% of the working population earns below this amount.
According to the law, the minimum wage is R20 an hour or R3,500 a month, depending on the number of hours worked. Despite this, the report finds that 29% of working people earn less than the national minimum wage.
According to the survey, the retail sector pays an average salary of “just R4,540”.
Supermarkets pay the lowest salaries, followed by restaurants and hotels. A large proportion of employees in supermarkets (67%) and restaurants (50%) earn below minimum wage.
Employers who fail to pay employees in line with the national minimum wage may be subject to a fine. According to the report’s authors, “The fine is calculated per employee as the greater amount of double the value of the underpayment or double the employee’s monthly wage.
“Employers should further bear in mind that paying at least a living wage will result in increased employee satisfaction and lower staff attrition, which combined will provide a better return on investment than short-term attempts to increasing margins by reducing staff costs.”
There is hope for those aiming to earn higher salaries: education.
“Tertiary education is a major driver of salary, with workers with a tertiary qualification earning on average 72% more than people without a tertiary qualification,” said Giraffe.
In its sample, 7% of the applicants had a degree and 62% had a matric qualification or less.
Senior employees (aged 36 and older) with degrees or diplomas are paid best in IT and technology, construction, legal and HR, according to the report.
Senior employees without degrees or diplomas are paid best in IT and tech, banking, accounting and finance. These are therefore the best industries for jobseekers to get into if they lack a tertiary qualification.
There is only an 18% difference in salary between call-centre agents with degrees or diplomas and those without tertiary qualifications.
“This shows that these roles are highly accessible to employees without tertiary qualifications, and still pay above living wage,” states the report.
Industries with the highest differences in salary between degreed vs non-degreed employees are:
manufacturing and supply chain (95%);
HR and legal (94%);
government or non-profit (90%); and
Comparing junior salaries (aged between 18 and 24) and senior salaries (aged 36 and older) shows a wide range in earning potential between industries.
IT workers, accounting professionals and artisans have the highest earning trajectory as they gain experience.
“Welders and boilermakers have the highest starting salaries and are in some of the top-earning positions, highlighting the need for skilled artisans and negating the perception that manual work is not a viable career option,” states the report.
In contrast, cleaners, warehouse staff, restaurant staff and retail staff have the lowest earnings growth potential.
Security guards have the lowest growth trajectory (25%) but have a relatively high starting salary (R3,900) compared with cleaners and cashiers, who start around R2,600 a month.
For people working in sales, the report shows where opportunities can be found.
“The education sector pays its salespeople best – perhaps reflecting the lucrative nature of private sector tertiary education. Healthcare and IT also pay salespeople well. Construction and transport pay junior salespeople best.
“Retail and marketing pay salespeople the worst – the latter reflecting the large number of field sales agents and promoters in South Africa, who typically sell low-end insurance and telecoms products. While call-centre sales might be a good entry-level sales job, career progression appears limited.”
When promotions come, managers’ salaries vary significantly by industry. Managers in IT, HR/legal, banking and construction are compensated best, while managers who earn the least work in retail, supermarkets and restaurants.
Giraffe analysed its database of close to 1-million medium-skilled candidates to generate the salary survey. It settled on a sample size of 131,699 workers – 87% of whom were aged between 18 and 35. Salaries ranged from R1,000 to R90,000 a month.
The online recruitment platform said its report is relevant for HR departments and small businesses who hire junior- to medium-skilled staff and would like to understand market salaries by industry and function.
Siobhan Zurnamer, who led the research, explained: “Employers – especially small businesses – often don’t know how much to pay their staff and jobseekers frequently don’t know what their skillset is worth.
“We find that the large discrepancies in salaries for equal work to be attributed to the inaccessibility of credible and fair salary reports, so we felt compelled to create one.”