DURBAN – According to the most recent ManpowerGroup Employment Outlook Survey, South African employers report cautious hiring plans for the third quarter of 2019.
With 8 percent of employers anticipating an increase in payrolls, 6 percent forecasting a decrease and 85 percent expecting no change, the resulting Net Employment Outlook is +2 percent. Once the data is adjusted to allow for seasonal variation, the outlook stands at +4 percent.
Hiring prospects remain relatively stable when compared with the previous quarter, but decline by 2 percentage points in comparison with this time one year ago.
Lyndy van den Barselaar, managing director of ManpowerGroup SA, provides insights into why South African employers are reporting cautious hiring intentions for the July to September time frame.
She said: "The trend of businesses remaining cautious around hiring activity continues into the third quarter of the year, with a large majority of respondents planning no changes to their hiring strategies and plans. The recently reported increased unemployment rate and turbulent economic environment further cement this sentiment, and will more than likely mean the trend is set to continue for the medium-term".
Employers in three of the five regions expect to add to payrolls during the next three months. The strongest hiring prospects are reported in Gauteng and Western Cape, with Net Employment Outlooks standing at +7 percent, while
KwaZulu-Natal employers report an Outlook of +5 percent. Meanwhile, Free State employers forecast flat hiring activity, reporting an Outlook of 0 percent, and the Outlook of -1 percent in Eastern Cape reflects uncertain hiring intentions.
"The results of the ManpowerGroup Employment Outlook Survey for the third quarter of the year sees the continuation of the trend seen in the results from the second quarter, with Gauteng and the Western Cape remaining on top in terms of expected job creation provincially. These provinces continue to act as economic hubs for the country, which allows for the creation of employment opportunities across their main contributing sectors," explained van den Barselaar.
When compared with the second quarter of 2019, Free State employers report a moderate decline of 6 percentage points. Elsewhere, the Outlook for Kwazulu Natal remains relatively stable and hiring prospects are unchanged in Eastern Cape, Gauteng and Western Cape.
In a comparison with this time one year ago, hiring plans weaken in three of the five regions. Free State employers report a considerable decrease of 9 percentage points, while Outlooks are 7 and 6 percentage points weaker in Eastern Cape and Kwazulu Natal, respectively. However, Outlooks strengthen by 4 percentage points in both Gauteng and Western Cape for the same period.
Payroll gains are forecast for nine of the 10 industry sectors during the coming quarter. Finance, Insurance, Real Estate & Business Services sector employers report the strongest hiring intentions with a Net Employment Outlook of +11 percent, while Restaurants & Hotels sector employers report a cautiously optimistic Outlook of +10 percent.
Some hiring opportunities are forecast for two sectors with Outlooks of +7 percent in the Agriculture, Hunting, Forestry & Fishing sector and the Public & Social sector, while Outlooks of +4 percent are reported in both the Mining & Quarrying sector and the Transport, Storage & Communications sector.
"Besides the recent increase in employment reported around the local financial sector, other research by PwC recently reported that there has been a more positive response to digital transformation in South Africa’s insurance sector, with more businesses within the sector looking to add new value for their clients through technological innovation. This reflects our insights on the market and could be a contributing factor to creating employment in the sector, as the addition of new products, services and technologies often translates to the acquisition of the necessary skills to ensure these are implemented successfully," explained van den Barselaar.
When compared with the previous quarter, hiring plans weaken in five of the 10 industry sectors. The most notable declines of by 9 percentage points are reported in both the Agriculture, Hunting, Forestry & Fishing sector and the Construction sector.
Hiring intentions also weaken in five of the 10 industry sectors when compared with this time one year ago. A considerable decline of 16 percentage points is reported by Transport, Storage & Communications sector employers, and Outlooks are 9 and 4 percentage points weaker for the Electricity, Gas & Water sector and the Construction sector, respectively.
However, stronger hiring plans are reported in four sectors, including the Restaurants & Hotels sector, with an improvement of 4 percentage points, and two sectors where employers report increases of 3 percentage points in the Finance, Insurance, Real Estate & Business Services sector and the Public & Social sector.
Participating employers are categorised into one of four organisation sizes: Micro businesses have less than 10 employees; Small businesses have 10-49 employees; Medium businesses have 50-249 employees; and Large businesses have 250 or more employees.
Employers expect payroll gains in three of the four organisation size categories during the coming quarter. Large employers report healthy hiring plans with a Net Employment Outlook of +24 percent. Elsewhere, Medium employers forecast a slight increase in staffing levels, reporting an Outlook of +6 percent, while the Outlook for Micro employers is +1 percent. However, Small employers expect to trim payrolls, reporting an Outlook of -4 percent.
Hiring intentions are 9 percentage points weaker for Small firms when compared with the previous quarter, but improve by 4 percentage points in the Medium size category. Meanwhile, Large employers report relatively stable hiring plans and the Outlook for Micro employers is unchanged.
In a year-over-year comparison, large employers report an improvement of 7 percentage points, but the Small employer Outlook declines by 7 percentage points. In both the Micro- and Medium-size categories, hiring prospects remain relatively stable.
Globally, the ManpowerGroup research for the third quarter of 2019 reveals employers expect workforce gains in 43 of 44 countries and territories surveyed in the period up to the end of September.