This month’s Adcorp Employment Index, released in Johannesburg by South Africa’s leading human capital management group Adcorp Holdings today, shows that employment in South Africa declined in May, while over the past year its labour market competitiveness fell by 8,1%.
Loane Sharp, Adcorp labour market analyst says: “Employment dropped last month at an annual rate of 2,5% and we ascribe this decline – the first in five months – to a significant drop in employment in the construction (-20,1%) and manufacturing (-11,0%) sectors, as well as a small drop in government employment following the local government elections (-2,7%) last month.”
Adcorp highlights that a sharp division occurred between high-skilled employment (which increased by 4,5%) and low-skilled employment (which declined by 3,7%). Employment of machine operators and elementary workers dropped sharply, by 14,9% and 12,9% respectively.
In this month’s Adcorp Employment Index, which reports on employment in South Africa for the month of May, Adcorp draws attention to recent World Economic Forum (WEF) data revealing the reduction of South Africa’s labour market competitiveness.
Says Sharp: “The WEF has revealed that South Africa’s international ranking fell from 123rd (an effective score of 11,5%) in 2008 to 133rd (4,6%) in 2011 in terms of the competitiveness of the country’s employment market.
“South Africa’s labour laws and regulations are now the 7th most restrictive out of 139 countries in the world. According to a survey of the world’s 1 000 largest multinationals, restrictive labour regulations are the 4th most problematic factor for doing business in South Africa.”
Referring to the National Planning Commissions (NPC’s) recent report, Sharp says the NPC maintained that there was widespread agreement – including such authorities as the International Labour Organisation (ILO), the Organisation for Economic Cooperation and Development (OECD), and the International Monetary Fund (IMF) – that South Africa’s labour laws “are not the principal cause of high unemployment. […] These laws are not overly rigid relative to either developed or developing countries.”
They were conclusions that led organisations such as the Congress of South African Trade Unions (COSATU) to argue that “[labour market] deregulation will neither enhance overall flexibility nor lead to a substantial improvement in employment”.
Says Sharp: “We pinpoint the problem with the NPC conclusions as one that flows from research produced or heavily funded by government bodies, including our universities.”
Meanwhile, South Africa performs poorest against firing practices (135th), labour unrest (132nd) and wage inflexibility (131st). As ranked by the WEF, restrictive labour regulations are the 4th most problematic factor for doing business in South Africa.
“South Africa’s apparent high labour market ranking among developing countries may therefore be attributed to a weighting or averaging process, whereby South Africa’s high-ranking private sector labour market and low-ranking regulated labour market cancel each other out, presenting a highly misleading overall picture about South African labour laws and regulations,” adds Sharp.
Contact:
Mandy Jones
Group Marketing Manager
Adcorp