Glenda Daniels
Pale males are still the storehouse of skills in South Africa. And the impact of equity legislation will drive up salaries of white males significantly, says Andrew Levy, head of P.e.o.p.l.e, the biggest labour consultancy in the country. At an annual launch of his labour relations report this week, Levy said because there is a dire shortage of skills, and because equity legislation will shrink promotion prospects for white men, they will be more amenable to being “poached” by other companies, thus increasing their salaries. Employees get the largest increases in their salaries when they move from one company to another. The new growth sectors, information technology and finance, will continue to drive the engine of South Africa’s economy, Levy said.
At the bottom end of the skills market the growth of the informal sector is encouraging, and “has performed splendidly with an extra 1,9-million people engaged in economic activity”, Levy said.
He said the decline in trade union membership will continue as companies carry on outsourcing work. “Worldwide, trade unions are reassessing their role, including in South Africa,” Levy said. However, South Africa still has a high trade union membership compared to most other countries. He said unions will decline in power at the level of economic influence, but not at the level of political and legislative influence. Another trend noted in the report is that 75% of strikes last year were triggered by grievances over wage increases. This year annual wage settlements will average between 6% and 7,7%. Executive- and performance-related salary settlements will come to between 9% and 10%, a reflection of the skills shortage in the country, Levy said. The average minimum wage in the formal sector is still a paltry sum R2 064.
The job-loss situation in South Africa continues to look gloomy. Levy’s report shows there was a 15% job loss in the formal sector over the past 10 years, and predicts a further 3% decline in jobs this year. Other trends affecting the labour market include the two most pressing socio-economic problems: the impact of HIV on the workforce and unemployment among the youth. The cost of life cover will double and the cost of training workers will increase tenfold because of HIV. “If companies do nothing about Aids, it will cost; if they do something, it will cost. Companies are realising that the cost is less if they engage in education programmes, and if they teach and monitor they will extend the life expectancy of an employee,” Levy says. One of the most pessimistic and disturbing aspects of the report is that school leavers will find it increasingly difficult to find jobs. “Unemployment has hit the youth the hardest. In the past year 50% of school leavers did not find jobs. This will increase to 60%,” Levy warned.