As costs increase, a growing number of higher earners are finding themselves one emergency away from financial distress.
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NO ONE shows up to work for free, but in South Africa, nearly half of working professionals feel grossly underpaid, and 48% believe their salaries are not a true reflection of the work they do.
Even though Stats SA’s latest Quarterly Employment Survey (QES) for Q3 2025 shows average salaries reaching record highs, many South Africans are still living pay cheque to pay cheque.
Data from Standard Bank, based on more than 400 000 clients, reveals that 21% of clients have R1 000 or less by payday, while 28% are in overdraft when the month ends. As costs increase, a growing number of higher earners are finding themselves one emergency away from financial distress.
While inflation is out of employers’ control, salaries are not. Small and medium-sized entities (SMEs) face an uphill battle when it comes to competing with larger corporations on pay, but getting salaries right has never been more crucial.
“From our experience working with SMEs, around 80% set salaries primarily based on their budget rather than what the market pays,” according to Sasha Knott, the chief executive of AI recruitment platform Job Crystal. “The result is a mismatch between employer expectations and candidate expectations, costing time, money, and talent that these small businesses cannot afford.”
Common mistakes SMEs make when it comes to salaries include relying on generic online salary searches, often from the US, without taking industry or role specifics into account. Some pay below-market salaries, expecting employees to grow into higher roles, only to risk losing them to competitors. Others fail to document or update salary ranges regularly, which can create confusion and inequity over time.
According to Knott, when salaries are below market, hiring timelines lengthen, and top candidates slip away. “Offer the right salary, and you attract the right talent quickly. It’s the classic pot and lid match. The right salary gets the right candidate in the right role.”
Salary benchmarking compares compensation against industry standards and should be an SME’s best friend. Job Crystal’s data shows Johannesburg salaries are typically over 10% higher than Cape Town’s, largely due to legacy corporate structures and the concentration of head offices in the city. While the hybrid remote work model is slowly softening these geographic differences, benchmarking ensures fair pay regardless of location.
As well as helping with hiring, benchmarking also assists with retention. Research shows employees who feel underpaid are more likely to leave, creating costly turnover cycles, but those SMEs that align salaries with market data save both recruitment time and money.
Another significant pay difference is between sectors, with those that require scarce skills in science, technology, engineering, and mathematics (STEM) or higher qualifications commanding higher salaries due to talent competition, in comparison to call centres and commission-based sales roles that rely heavily on incentives.
“Salary benchmarking is an HR exercise for sure, but it is also a valuable business growth strategy. Don’t get the salary offer right from the start, and you could save over 30 hours of recruiting and six months of training, only to lose the employee and start over,” Knott said.
One of the biggest benefits of salary benchmarking is in helping to close South Africa’s gender pay gap. While some progress has been made on this front, South African women still earn roughly 24% less than men on average, according to a 2025 Discovery Corporate report.
The gap widens in mid- to senior-level roles, although junior-level salaries appear more equitable.
“Like in most places in the world, South Africa’s gender pay divide often reflects structural issues rather than direct discrimination. Senior leadership, founder roles, and high-risk entrepreneurial opportunities remain overwhelmingly male, and promotion pipelines and pay structures often reflect old boys’ networks rather than true equity,” Knott said.
Flexibility also plays a role. Women frequently take remote or hybrid roles to balance work and family, sometimes accepting slightly lower pay in exchange for flexibility.
Knott suggests that companies can start closing the gap by conducting regular gender pay audits, publishing results internally, and linking leadership bonuses to measurable progress in representation and pay equity.
She also recommends the following practical steps that SMEs can take to ensure fair and competitive salaries across the board: