Anecdotal evidence suggests that some financial services companies in Johannesburg are offering stronger salaries, and throwing in sweeteners to entice skilled workers back to the city, and offset the semigration trend in South Africa in recent years.
The onset of the Covid pandemic in March 2020 led to an increase in semigration to South Africa’s coastal areas, particularly Cape Town, and smaller coastal towns in the Western Cape – with many homebuyers seeking a better work-from-home lifestyle.
According to the Seeff Property Group, Mossel Bay, along with other coastal towns along the Garden Route such as Plettenberg Bay, George and Knysna, emerged as some of the semigration hotspots.
In the face of the pandemic, it became necessary – and viable – for many industries to enable their staff to work remotely from home. Professionals began to re-assess their lives, no longer bound to their city of work-spending less time travelling to work while dedicating more time to their families and having a balanced lifestyle.
Flexible work was far from the norm, and remote work was the exception for most financial institutions before Covid-19. And while many companies in the financial services sector, in particular, have said they plan to make remote work permanent for roles that allow it, some want their employees back in the office.
And with many skilled workers moving to the Western Cape, some employers in the financial services industry in Joburg, are willing to pay well over the norm to get some of the people back.
Data from CareerJunction shows that executive management/director positions already pay more in Gauteng, compared with the Western Cape.
Average salary offerings for an executive-level position:
- GP: R87,457 – R117,422
- WC: R79,703 – R109,395
And the average salary offerings for a skilled level senior manager per month is:
- GP – R59,454 – R78,732
- WC – R46,439 – R55,394
Prior to the pandemic, salary offerings were extremely competitive for financial professionals in Gauteng, compared to the Western Cape. Professionals working in Gauteng were offered up to 23% more money than their Western Cape counterparts, data from CareerJunction showed.
A Microsoft survey of 31,102 workers globally, between January and February, found that approximately half of leaders said their company already requires or is planning to require employees to return to in-person work full-time in the next year.
However, flexibility has become non-negiotiable for many skilled employees, making negotiations tricky.
Advaita Naidoo, MD, Africa at Jack Hammer Global, an executive search firm, said that in the normal course of work at Jack Hammer, the company would expect between 10 and 15% of potential candidates to decline an opportunity based on location.
“However, with remote working having become so entrenched, that proportion has increased, in line with strong preferences to remain remote and not work permanently in an office at all – regardless of where it may be located.”
“As a result, we’re seeing some companies attempt to be creative with their compensation policies; in some cases, Johannesburg-based companies may offer larger salaries and additional incentives to attract Cape Town-based professionals.”
According to Naidoo, some of the deal-sweeteners include:
- Paying the difference in market value and the ultimate sale price of Cape Town property to incentivise a quick move.
- Paying either the bond instalments of Cape Town property until the new hire is able to sell or Joburg rental until a permanent home is found.
- Building the cost of a weekly commute into the package, so that new recruits can have the best of both worlds.
An MD at another executive search agency Johannesburg said that many firms offer sweeteners for strong talent. He said that Joburg based firms are employing Cape-based candidates and then allowing them to commute between the two cities and pay for the commute as well as stay in the city.
However, he stressed that the trend is certainly still semigration, with candidates only returning to Joburg if they fail to secure a suitable role.
“They semigrate for a reason but that is not always sustainable when wanting to move to another firm in the city they now call home.”