Changes in South African labour laws are always met with mixed emotions. Whether it is among the ranks of employees or employers, there is a mixture of relief for prioritising certain aspects and concern for others. But business owners shouldn’t be fearful of legislative changes, or rather updates, because that is what builds fair work environments that protect all parties involved.
According to Nkosinathi Mahlangu, Youth Employment Specialist at the Momentum Group Foundation, changes in the labour law, such as the recent annual minimum wage increase, these changes aim to solve real structural problems. “It’s success, however, depends heavily on how these adjustments are implemented and how employers and employees understand how they are protected through these labour laws.”
He notes that youth workers in particular need greater awareness of their labour rights. “Youth workers need to understand what it means to be an employee to enable them to retain employment past the probation period,” he explains. “This will also help them avoid exploitation and working overtime without proper remuneration, since they are focused on keeping the job.”
Mahlangu highlights that laws and policies that govern the world of work exist for a reason, and both employees and employers need to heed these laws.
Change Brings Expectations
Mahlangu continues to state that the annual minimum wage increase helps SMEs in many ways. “It allows SMEs to hire talent at an entry-level salary aligned with their experience, to avoid the risk of overpaying. This takes off the pressure on SMEs to match higher market salaries for inexperienced talent,” he explains. “Compliance and profitability are very difficult to juggle for many SMEs, and this solves that problem.”
But this is only one facet of a larger salary expectation discussion.
Weighing in on the discussion, Sasha Knott, CEO of Job Crystal, explains the mismatch between employer salaries and employee expectations.
“Many SMEs struggle to set competitive salaries because they simply do not have access to reliable market data. Unlike large corporations with dedicated HR departments, smaller businesses often determine salaries based on what they can afford rather than what the market pays,” she explains. “Cash flow pressures, limited hiring experience, and uncertainty about the actual value of certain roles can all contribute to this challenge. As a result, SMEs sometimes offer salaries that are either too low to attract the right talent or too high for the business to sustain long-term. Having access to accurate salary benchmarks can make a significant difference in helping smaller companies make better hiring decisions.”
Among the many hiring decision that has to be made when hiring employees, is deciding when to invest in a higher-earning, specialised staff member, or a lower-earning one. Knott sheds some light on this by elaborating on how small business owners make this choice.
“For many SMEs, hiring decisions are ultimately about productivity and long-term value rather than just salary cost. In some cases, hiring one highly skilled professional who can manage a function efficiently may deliver far more value than hiring multiple junior employees who require supervision and training.
“A good example is finance. An experienced accountant may be able to implement systems, manage compliance, and provide financial insights that help the business grow, whereas two entry-level assistants may still require oversight. The key is for SMEs to focus on the skills that will have the greatest impact on the business and invest in roles that enable growth and efficiency.”
When hiring new staff, the choice should be about what the business needs and what will improve operations, not hiring someone because there is a belief that someone needs to fill a particular role; don’t hire a social media manager just because you think that your business needs it. Outsource when you need the expertise, but not the in-house skill.
Benefits and Salary are Not the Same
Knott reminds SMEs that a big mistake that entrepreneurs sometimes make is to conflate salary and benefits that employees seek. “While salary remains important, many employees today are also looking for flexibility and a healthy work environment. Hybrid and remote work options have become a major consideration, particularly for professionals balancing family responsibilities,” she explains.
Since monetary value isn’t the only point that employees consider, employers should look at other ‘perks’ they can offer. “Other benefits such as paid leave, career growth opportunities, wellness initiatives and a positive workplace culture are also becoming key factors in attracting and retaining talent, she shares. “For SMEs that may not always be able to match corporate salaries, offering flexibility and benefits can help make roles far more attractive.”
Yet, Knott warns that another mistake is that entrepreneurs become over-reliant on generic salary information available online. “This data is often from international markets, which may not reflect South African industry conditions (for better or worse).” Closely related to this is the common mistake of failing to update salary ranges regularly as the market changes.
Additionally, Knott explains that the salary landscape in South Africa can also be affected by geographic location. “South Africa’s salary landscape still varies quite significantly by province. Johannesburg has traditionally paid higher salaries than cities like Cape Town, mainly because many large corporates and head offices are based there. In some cases, salaries in Johannesburg can be more than 10% higher for similar roles. However, the rise of hybrid and remote work is starting to soften these geographic differences.”
She notes that companies are increasingly hiring talent from different provinces without requiring relocation, which allows businesses to access a wider talent pool while also giving employees more flexibility about where they live and work. “Over time, this trend may help create a more balanced salary landscape across the country,” she concludes.
