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South Africa – Permanent job losses outnumber temporary job losses

10 September 2013

South Africa’s largest staffing firm, Adcorp’s (ADR: JNB) latest Employment Index shows that the economy shed 34,654 jobs during August. The biggest job losses occurred in permanent jobs, which fell by 26,820 during the month, followed by temporary jobs, which declined by 12,845 in August. Significant job losses were observed in mining, construction, transport and financial services, resulting in 26,000 fewer jobs between them.

The Index also shows that in 2013, 3.96 million workers were absent due to sickness during the year, up from 0.7 million in 2000. This represents an increase of +466% - despite the fact that the number of people employed was essentially flat over the decade.

Loane Sharp, Labour Economist at Adcorp Holdings, commented: “Due to the unplanned and unpredictable nature of sick leave, the knock-on disruptive effect on supply chains has probably been greater than these figures suggest. It may have led, in part, to the growing phenomenon of temporary or “contingency” workers, many of whom fill in for other employees who are absent from work.”

Between 2009 and 2011, one-quarter of all workers claimed the maximum statutory allowance for sick leave, which is 36 days in a three-year cycle. The index also shows that sickness-related absenteeism has increased four-fold since 2007. The resulting cost to the economy has been enormous.

The average output per worker in 2012 was ZAR 145,233 (USD 14,483) per year – or ZAR 586.19 (USD 58.46) per working day – in 2011, this loss of output due to sickness totalled ZAR 4.29 billion (USD 427.8 million). Cumulatively, since 2000, the economy has lost ZAR 55.2 billion (USD 5.5 billion) in real terms due to sickness.

Absenteeism arises for many reasons. In genuine cases of illness, the workplace and the nature of the work itself may be implicated in absenteeism. In false cases, the take-up of statutory maximum sick leave allowances is a function of how generous those allowances are, and the degree to which absenteeism is monitored and controlled.

“It is alarming that sick leave in South Africa has been rising continuously over the past decade, and at present shows no signs of reversing,” Sharp added. 

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