Fast little loans
The launch this week of research undertaken by the Boston Consulting Group (BCG) on behalf of the International Confederation of Private Employment Agencies (Ciett) could not have been timed better, for those who are speaking out against the proposed amendments to labour legislation.
The minister of labour last week published amendment bills to the Labour Relations Act and the Basic Conditions of Employment Act.
The main thrust of the changes are around regulation of the temporary employment services sector, commonly known as the labour broking industry.
Those crying foul at the proposed amendments are saying, above all else, that the changes to legislation, if implemented, will discourage employers from taking on employees and, in effect, create even greater unemployment in the country.
Labour lawyer Johnathan Goldberg, who has been involved in the National Economic Development and Labour Council negotiations, points out that, under a labour law regime that makes it difficult to dismiss employees and, especially, to retrench them, employers will be reluctant to take on workers in anything but a temporary capacity.
It has also been argued out that a flexible labour market is essential in the current economic climate, with its uncertainty and volatility.
Both these points are borne out by the research contained in Ciett’s report.
Speaking at the Joburg launch of the publication, to members of the Association of Personnel Service Organisations, James Gribben, communications and economic affairs adviser to Ciett, said that the document – “Adapting to Change. How private employment services facilitate adaptation to change, better labour markets and decent work” – was the result of nine months’ work in 40 countries.
Private employment services is the term used in Europe to describe what are known here as temporary employment services (labour brokers).
“Our intention was to get our hands on everything that has been written about the industry and to use it to draw the most accurate picture of the industry, worldwide, that is possible,” he said.
The data was given to BCG, one of the top management consultancies in the world, and it compiled the report.
The outcome is that, in every dimension that the research investigated, the evidence is clear that using temporary employment services to supply staff makes economic sense.
The research makes six claims in support of using temporary employment agencies.
l Private employment services help to adapt to more volatile and complex labour markets – this type of work allows for a quicker response to business demands; allows for flexibility; keeps fixed costs low and allows businesses to come out of the economic downturn more quickly.
l Private employment services reduce structural and frictional unemployment – companies report that they would not take on workers if they had to be permanent.
The majority indicate that if they were forced to make all jobs permanent they would rather look to divide the work among existing staff.
Working in the temporary employment sector is likely to be a stepping stone towards permanent employment, especially for young and first time workers.
l Private employment services reduce segmentation of the labour market – the research shows that the main reason why workers enter the temporary market is because they want to find a job quickly. In SA it takes on average 90 days to find a job in this sector.
The diversity of work available increases labour market participation. Temporary work is available for students, workers re-entering the market, first-time entrants, flexi professionals and senior workers.
l Private employment services contribute to matching and developing skills needed in the labour market – there is a growing global mismatch in skills provision.
New entrants battle to find jobs because they do not have the appropriate skills.
Temporary employment services are a major provider of training to make employees meet the demand.
l Private employment services deliver decent work – throughout the world temporary employment services are committed to social dialogue. They all support the International Labour Organisation’s convention on decent work.
Efficient labour markets need effective regulation of temporary work.
The temporary employment services sector, worldwide, supports and contributes to regulation of the industry. As is the case in SA, it is not in the interests of compliant operators to have a rogue element that gives the industry a bad name.
“We have to realise that the world of work is an uncertain, volatile place,” Gribben says.
“Under those circumstances permanent employment is not the right way to go.
“The Adapting to Change research shows that private employment services can provide the solution.”