The Domino effect of Covid-19 on South Africa’s struggling economy has caused unemployment to rise to historical highs. Statistics SA reported that 32.5 percent of the workforce was unemployed in December. Photo: Siphiwe Sibeko, Reuters.
The Domino effect of Covid-19 on South Africa’s struggling economy has caused unemployment to rise to historical highs. Statistics SA reported that 32.5 percent of the workforce was unemployed in December. Photo: Siphiwe Sibeko, Reuters.

How small businesses can tackle unemployment

By Opinion Time of article published Mar 28, 2021

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By: Ben Bierman

THE DOMINO effect of Covid-19 on South Africa’s struggling economy has caused unemployment to rise to historical highs. Statistics SA reported that 32.5 percent of the workforce was unemployed in December.

That equates to about 7.2 million South Africans, with the youth (ages 25 to 34) being the most effected.

Small-and-medium enterprises (SMES) have been great drivers of employment. But Covid-19 and the lockdown have hit the sector hard, with many not surviving and forced to let staff go. However, this sector still holds great potential for job creation and continues to play a significant role in the economy’s recovery and growth.

Tips on how the sector can still offer employment opportunities: Networking

Network with other SMES to share resources. Staff who have been downsized from one business can be ideal candidates for other, connected companies. Keep lines of communication open with customers, suppliers and industry peers to identify such opportunities. Be sure to share job vacancies when they arise.

Formalities

Formalise all levels of employment in your business and register employees with the Unemployment Insurance Fund. This will help protect staff if the need arises. As retrenchments are still a reality, all businesses have an obligation to ensure that their employee admin house is in order. Rotation

Consider rotating staff by offering employees reduced workloads at a reduced salary, instead of letting them go. A four-day work week was used successfully as a mechanism to preserve jobs during the Great Depression. Development

Upskill where you can. For instance, internship programmes that help candidates learn new skills and gain experience can be a mutually beneficial solution to unemployed youth. The best innovators lie within SMES.

The sector therefore has the power to transform the South African skills pool. The added benefit for participating businesses is improved productivity and better options for talent selection.

Even as SMES continue to take strain and feel powerless against the challenges facing our country, the examples illustrate that there is always something that they can do, no matter how small. They highlight the important role SMES can play to help tackle South Africa’s unemployment issue.

Ben Bierman is a managing director at Business Partners Limited

*The views expressed here are not necessarily those of IOL or of title sites.

BUSINESS REPORT ONLINE

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