Employment view deteriorates with permanent jobs lost

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Wiseman Khuzwayo

The employment landscape remained disheartening, primarily because permanent work continued to decline by 15 184 jobs, Adcorp said yesterday as it released its May employment index.

The leading provider of staffing, human capital and business process outsourcing solutions said employment in non-permanent work, however, was sharply up. Informal employment grew by 8 591, temporary work increased by 27 250 and agency work expanded by 4 555 during the month.

Adcorp said significant job losses were observed in manufacturing (3 000), financial services (5 000), and transport and communications (5 000).

Loane Sharp, a labour economist at Adcorp, said one of the anomalies of the past few years was that temporary employment continued to grow despite legislation intended to reduce the use of temporary workers or raise the employment cost of temps.

He said: “In Adcorp’s databases for the past 17 months since January 2013, the number of blue-collar temporary workers has witnessed an increase from 65 256 to 69 732, an increase of 6.9 percent.

“Between April and May, the number increased by 5 254 workers or 6.3 percent month on month, to say nothing about the annualised increase that this represents (73.6 percent).

“White-collar temps, by contrast, shrank 5.6 percent since January 2013 and white-collar permanent workers shrank by 7.5 percent in month-on-month terms in April and May alone.”

He asked why there appeared to be a structural shift in the labour market whereby mostly blue-collar permanent workers were being outsourced to employment agencies.

“The first part of the answer is that South African firms are utilising temporary blue-collar workers in their expansion strategies in the rest of Africa.

“Work coming in Africa outside South Africa now accounts for 9.5 percent of Adcorp’s headcount and this figure is growing sharply, by 126 percent over the past three years,” Sharp said.

He said the second factor was that South African manufacturing firms were continuing to outsource their entry-level positions, which they were still allowed to do under the new labour laws. Of these, 65 percent employed fewer than 50 people and 45 percent fewer than five people, the latter accounting for just 12 percent, or one in eight workers, of the private sector workforce.

He said the third answer was that the entry-level blue-collar workforces did not consist of a mix of permanent and temporary workers, which allowed companies to defer or ignore the new “equal pay for work of equal value” provision of the new Employment Equity Act, as there were no permanent worker comparisons for equal work purposes.


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