Our industry

THE MAKE-UP OF THE SA WORKPLACE

South Africa has close to 48 million citizens with a labour force of approximately to 31 million and an unemployment rate of 23,5%.

Nine and a half million people (30%) are employed in the formal sector. Two million people (7%) are employed in the informal sector. Close to 1,3 million people (4%) are employed in private households and 738 000 people (2%) are employed in the agricultural sector. Just over 4 million people (23,8%) are unemployed; 5,6 million people are in educational institutions; 13,5 million people are on social welfare; and we have 1,8 million people in South Africa that are disabled.

Adcorp and the South African staffing industry is predominantly focused on providing services to those new entrants, re-entrants; job leavers and those who have lost their jobs or 13% of the total workforce. A proportion of those seeking employment find work through our permanent placement, recruitment advertising and response handling agencies. Others, especially those with limited qualifications and experience, find employment opportunities through our temporary and flexible staffing agencies often referred to as Temporary Employment Services (TES). In most of these cases these individuals go through a rigourous process of empowerment through our knowledge and experience transfer interventions. Throughout this process they have gainful employment accompanied by all elements related to decent work including compensation, benefits, personal development and protection of their rights. Around 40% of TES assignees are covered by Bargaining Council wage agreements and the balance fall under Sectoral Determinations or BCEA.

TEMPORARY EMPLOYMENT SERVICES’ (TES) CONTRIBUTION TO EMPLOYMENT CREATION:
THE PATH TO DECENT WORK IN SOUTH AFRICA

Temporary employment services (TES) represent a R26 billion industrial sector

TEMPORARY EMPLOYMENT SERVICES’ (TES) CONTRIBUTION TO EMPLOYMENT CREATION: THE PATH TO DECENT WORK IN SOUTH AFRICA

Temporary employment services represent a R26 billion sector with 5 120 businesses operating nearly 7 000 recruitment centres around South Africa. In 2008, the daily average headcount of contract employees was 902 350 (managed by agencies) or 2 739 315 (managed by agencies and by employers directly). Over the past decade, Services SETA figures indicate that employment agencies contributed R415 million to the National Skills Fund. Since 2000, contract employment agencies introduced around 3,5 million temporary, part-time and contract employees into the South African work-force, approximately 2 million of whom were first-time job-seekers, 92% of whom are African, and 85% of whom are youth aged between 18 and 35. More than 32% of these employees secured traditional, permanent jobs within 12 months of commencing a contract assignment and 47% did so within a period of three years from commencement of a contract assignment. Contract employees represent 23,9% of total employment in South Africa, varying from 13% in the mining sector to 59% in the construction sector. In total, the industry supports 1 million people directly, and 3,6 million indirectly.

CONTRACT LABOUR: A VITAL COMPONENT TO EFFECTIVELY COMPETE IN VOLATILE MARKETS

The presence of vibrant and competitive private sector intermediaries in the job facilitation process is an enormous national asset. The key advantages of this industry are as follows:

• Up-to-date nation-wide databases of job-seekers and available employment opportunities.
• Innovative and scientifically validated assessment tools and processes that assess job-seekers’ “fit” and potential in different roles, companies and industries.
• Workplace readiness programmes that combine traditional classroom-style learning with on-the-job training in a real-world environment.
• Performance enhancement and career progression services that assist with organisations’ performance objectives and employees’ job mobility.
• Scaleable technology and branch office infrastructures that support a large number and wide range of employment services, including payroll services, absenteeism management and accounting services, among others.
• Workforce scheduling services that allow organisations to match hourly, daily, weekly and other cyclical fluctuations in labour demand with skilled and available human resources.
• Workforce optimisation services that allow organisations to optimise their labour productivity and costs to achieve global competitiveness.

CONTRACT LABOUR: A VITAL COMPONENT TO EFFECTIVELY COMPETE IN VOLATILE MARKETS

The above graph shows a strong relationship between economic volatility at the sector level, and the use of the contract employees in that sector.

The underlying basis for this relationship appears to be that the more volatile a particular sector, the more difficult it is to predict future output and demand levels in that sector, the greater the need to alter employment levels in light of changing business circumstances, and the higher the proportion of contract and other non-permanent employees.