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South Africa – Temporary workers boost employment

11 July 2013

Labour brokers, the government sector, and highly skilled professionals and management are the main drivers of employment growth, according to the Adcorp Employment Index for June 2013. Employment increased marginally in June, the first increase in six months after the formal sector created 2,587 jobs during the month and the informal sector created 9,890 jobs.

Agency workers, also known as labour broker workers represent 7.8% of total employment in South Africa. Temporary work has remained stable during the recent economic difficulties, unlike permanent work which has declined by -1.8%, equating to 168,000 jobs over the past year. Agency work is the fastest-growing segment of the South African labour market.

Temporary workers also appear to be more secure in their jobs than permanent workers. Since 2000, the number of temporary workers increased by 2.6 million to 4.0 million, whereas the number of permanent workers fell by 2.0 million to 8.9 million.

“In South Africa, the temporary work market is proportionally larger than in other countries [equating to 30.7%] because labour laws and regulations make managing an employee’s on-the-job performance exceedingly difficult. Labour brokers, who possess specialised competencies in performance management and dismissal, are often in a better position than their clients to attain higher levels of labour productivity,” says Loane Sharp, Adcorp’s labour market analyst.

Many labour brokers employ specialised professionals who can deal effectively with bargaining councils, trade unions, the Commission for Conciliation, Mediation, and Arbritration (CCMA) and the Labour Court. This makes the use of labour brokers especially attractive to mid-size employers with between 50 and 500 employees. These companies do not possess specialised human resource functions, which is why so many labour brokers are small, supplying fewer than 200 temporary employees .

Mr Sharp added that collective bargaining arrangements do not always apply to temporary workers. As a result, temporary employees are not generally offered regular pay increases in the same way as permanent workers.

“For a permanent worker, the only time that his or her remuneration is checked against the market-related remuneration for the same role, is at the point when they are recruited, where-after their remuneration is generally linked to the cost of living and/or increments achieved by negotiation with trade unions and/or bargaining councils,” said Mr Sharp.

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