/ 17 June 2009

SA employment environment ‘clearly negative’

South Africa is keeping pace with global markets when it comes to job losses. This is according to a report on the latest quarterly update of the Adcorp Employment Index.

The report found that the employment environment in the country is “clearly negative” and influenced by a drop in macro-economic activity and a lower demand for labour. Adcorp’s analysis indicates that an economic recovery can only be expected in the first half of 2010, with a growth in overall employment later that year.

“The South African economy has stopped growing and it’s at its deepest decline since 1994,” says the report. This in turn is having an effect on employment and remuneration trends.

In addition to a drop in remuneration, which is down by 5,6%, the research uncovered a split in the way workers are being affected by the downturn. One group is experiencing a “salary freeze” with no expected wage increase. The other was to have an 8% or 9% increase, but this is expected to drop to between 6% and 8% by the end of the year.

“We are seeing unions responding to this pressure with ever more aggressive stances and it appears that ‘strike season’ is well under way,” says the report.

Earlier this week, the South African Press Association reported that Labour Minister Membathisi Mdladlana, speaking at the International Labour Organisation Summit in Geneva, Switzerland, said strike action should be avoided to prevent anarchy in the economic sector and labour market.

The index found that there have been serious job losses in mining, manufacturing, trade, finance, real estate and business services. In a press release, Adcorp Holdings chief executive Richard Pike said: “Although the overall supply of skills exceeds demand, shortages still exist in those sectors that are especially linked to our country’s major infrastructure development projects.” The more “robust” sectors, which saw a growth in employment, include construction, logistics and warehousing, communications and IT, government and personal services.

According to the International Labour Organisation, global unemployment could surpass 7% this year and continue to rise until 2011.