Employment levels fall sharply

Employment levels dropped at an annualised rate of 3.1% in May breaking a four month long pattern of strong employment growth.  This news was announced by Adcorp’s Employment Index, which was released this week. The index showed that all sectors, occupations and employment types saw recorded declines with the sharpest drops experienced in agency work (-9.1%), transport (-12.7%), mining (-12%), domestic workers (-8.4%) and elementary workers (-5%).


Growth was however experienced in professional positions, where employment grew 4.9% and there was a 2.2% increase in the employment of senior managers. The informal sector of employment rose by 1.2%.


Adcorp’s figures show that around 30.2% or 3.93 million workers of the national workforce are temporarily employed. “Ironically current tightening of South African labour laws will have an unintended consequence of expanding rather than reducing the role of temporary agencies in South Africa,” the company added.
Since 2000 permanent positions have fallen from 11.0 million to 9.1 million workers, a decline of 18.7%, while temporary positions have seen an increase in the number of workers since that year by 2.6 million workers or a jump of 187.5%. “For example, since the 2009 recession, permanent employment has increased by just 2%, whereas over the same period total employment – comprising permanent and temporary workers – has increased by 12.2%,” the company pointed out.


Included in the temporary workers category are agency workers, which number one million strong, accounting for 25.5% of all temporary workers and 7.5% of the total national workforce. Since 2000 temporary work has grown at an annual average of 8.5% and agency work at 11.9%, while permanent work has declined 1.3% a year.


Adcorp said there were several reasons for the growth in agency work. It said the increase in temporary work was related to the global trend to outsource non-core activities. Companies were also experiencing variable and unpredictable sales volumes, which means they needed to add flexibility to their labour cost base by continuously re-matching business conditions with labour demand. Hiring temporary workers was also popular as many companies faced recurring cycles and fixed-duration projects, which again means there is no need for permanent workers. “Modern businesses no longer keep office hours, with the result that shift workers have become increasingly common,” added Adcorp.