Why are salaries in JHB higher than anywhere else?

My consultant Simon Carter was recently interviewed on YFM and the discussion focused on the perceived perception of salaries being higher in Johannesburg than in the coastal cities, namely Cape Town and Durban. This is what he has to say.

Why are salaries higher in Johannesburg than in the coastal cities?

This is often spoken about in the recruitment industry and it is often deemed common knowledge, but what really is the reason for this?

I did a little research before my interview on YFM’s breakfast show to do a little fact-find rather than wax lyrical and perhaps make a fool of myself on a national platform.

During my research a few key points stood out about the differences between Johannesburg and Cape Town and Durban and to a certain extent, Port Elizabeth.salaries

Johannesburg accounts for a large portion of South Africa’s Gross Domestic Product. If broken down in2004 Johannesburg’s GVA (Gross Value Add = Produce minus intermediate consumption) was sitting at a little over R200 billion whereas Cape Town and Durban were a shade under R150 billion. That is R50 billion difference, again 50 billion rand difference. According to a survey conducted by Mastercard, Johannesburg ranked 47 out of the top 50 economies in the world, and is ranked number 1 in Africa –Thanks Wikipedia.

Johannesburg has a larger concentration of Big Businesses which creates a hunter mentality for more money. As there are more companies there is more opportunity. Skilled workers are in greater demand in Johannesburg, typically for any one job title in Durban or Cape Town there are up to 10 or so vacancies, whereas in Johannesburg there is in excess of 20 – 30. Therefore there is a lot more competition between companies to attract the best staff to their organisation and the best way to do that other than offering a great place to work is offering money. Money will always talk when you are looking at Johannesburg. It is often perceived that Johannesburg is the centre of the African economy. Although it is not all doom and gloom for the coastal cities as there are a lot of great opportunities out there. It is no secret that Durban has the second biggest manufacturing sector in South Africa, as well as Durban boasts the largest Port Terminal in Africa which generates a thriving Transport and Logistics industry. Cape Town is a hugely popular destination with international tourists, with its immaculately run city centre, to the wine farms and the property along the west coast. A few reasons why there are a large amount of people moving to and seeking jobs in Cape Town.

I guess when you are considering a place to live in you need to decide on your overall well-being. Climate, social environment, schools, cost of living etc all come into play. But if you’re after the big salary and the big job then Johannesburg might be the best place to go.

If that’s your cup of tea?

Simon Carter – Recruitment Consultant Pro Appointments