Where the jobs are -- and aren't

For many companies in the tourism market retrenchments aren’t an option. A certain number of people are needed to keep the doors of a hotel, B&B or tour operator open, like it or not.

With the big, high-margin prize of 2010 soccer tourists so near there is an incentive to stay as large—and as ready—as possible.
Yet the strain is starting to show.

“A few clients have informed us that they are not going to be making use of our services for some junior positions,” says Kyle Ovens, a partner at specialist recruiter Hospitalio.

“If they need a receptionist then they have to hire a receptionist, but they are trying to do so more cheaply and they are willing to take a risk to do it.”

Although data is not yet available to establish a solid trend, hotels are starting to complain of lower occupancy rates and are expecting worse to come as northern hemisphere customers fail to get on airplanes and companies everywhere cut back on lavish incentive trips for sales staff and off-site conferences for bigwigs.

There are still jobs going, though. Anyone who speaks fluent French, German, Spanish, Italian or Portuguese as well as English can find employment, especially with a public transport permit in hand and youth (and willingness to accept an entry-level salary) on their side. Formal training will also open doors.

“We have rumours of redundancy in the industry but what we are seeing is companies grabbing skills when they can get them,” says Shirley Fawke, co-owner of recruiters Hotelstaff.

“The new hotels are still being built and even without them there is a candidate shortage.”

During 2008 a total of 1 331 British retailers closed their doors. This year another 1 600 are expected to go out of business.

The South African retail sector is not doing too badly, even though it has officially been in recession since November with six months of consecutive decreases in sales.

There were widespread expectations of a poor season continuing that trend, yet there have been only isolated reports of shops selling less during the 2008 Christmas period than they did in the previous year.

Woolworths was the hardest hit and the Foschini group did less business in late 2008 than in late 2007. So did Truworths. But sales at the Massmart group beat inflation. Pick n Pay did okay, Mr Price did well and so did Shoprite.

That means fewer retrenchments than previously expected, but major retailers won’t be hiring this year either. New outlets due to be built in 2009, and in some cases entire shopping centres, have been put on hold.

Among suppliers, however, things don’t look quite as grim. Fast-moving consumer goods (FMCG) companies are hiring only slightly fewer than in early 2008, indicating that they foresee a retail turnaround perhaps even before 2010 rolls in.

“It’s been close to business as usual,” says expert FMCG recruiter Julian Schlemmer. “We have companies looking for sales and marketing staff, accountants, supply chain logistics people and production guys. There are always jobs in engineering and the production engineers will always have 10 companies interested in them.”

Schlemmer notes that, although larger FMCG companies are hiring, the smaller players in the market are reducing their workforces slightly. 

In 2008 there were 140 000 fewer cars sold in South Africa than in 2007. That is 140 000 fewer cars to be serviced, panel beaten and insured this year.

In February sales were down another 29 471; at the same time secondhand car prices failed to keep up with inflation as repossessions soared.

Elsewhere in the world the situation was considerably worse, as has been the impact.

Though General Motors, Ford and Chrysler asked for massive government bail-outs, South Korea’s Ssangyong Motors applied for court receivership to avoid being declared bankrupt and Honda and Mitsubishi each cut thousands of temporary jobs at Japanese plants.

General Motors SA retrenched 1 000 workers, about one-third of its workforce, at the end of 2008. Volkswagen shed 400 and component-makers are expected to fire several thousand more between them. During the year a number of brands closed down dealerships and several independent dealerships went out of business. Several analysts have predicted that the true impact has not yet been felt in the South African market.

But the motor trade is used to cycles, says a specialist recruiter in the sector, Richard Strauss, and the return of better sales is inevitable in South Africa. “The lack of other transport infrastructure means that South Africans have to buy new cars eventually. Sometimes they delay for longer than other times, but they always buy again.”

Strauss expects an upturn within 18 months, with the caveat that local interest rates would have to drop by 200 basis points before then. But even now he is seeing an apparently insatiable demand for qualified mechanics and used-car sales managers with at least five years experience and a proven ability to value secondhand vehicles.

Information Technology
The information technology sector saw all-time record unemployment at the end of the dot-com crash, when many specialists took up other careers for lack of choice. Global employment levels have not reached the same heights again, but the sector also shows signs of bearing up better than many others.

“We know that some projects have been put on hold but there is still recruitment going on,” says Ernie Hipner, general manager of specialist IT recruitment website Careerweb.

“Since October there has been some caution in the market but everybody is still optimistic and in January our numbers were up from last year.”

Hipner reports strong and ongoing demand for project managers and business analysts.

Similarly, specialist recruiter Lindy Sollinger has lots of ­companies looking for .NET, C++ and Java developers, as well as sales people with experience in the IT field.

“Some of the large companies have frozen positions for in-house developers but qualified people are being hired by small and medium development houses instead,” she says. “What we typically find is that three months or so after the corporates institute hiring freezes they start turning to those ­development houses with outsourced jobs.”

Sollinger has, however, seen a change in the balance of power. Previously highly skilled developers would sometimes submit lists of questions to potential employers before even deigning to attend an interview.

“People are less cocky and arrogant now and they are not expecting such huge salaries,” she says.

If the lessons of previous cycles hold true, companies involved in hardware and software sales will be harder hit than their development and services peers, though evidence of such a slowdown is lacking as local companies have not yet reported results for the relevant period.

The boom in the construction industry, at home and abroad, reached what was, with hindsight, ridiculous levels in late 2007 and early 2008.

Concrete and cranes could not be had for love or money and everyone from architects to bricklayers were turning away more work than they accepted.

With credit suddenly scarce, both globally and at home, building projects that didn’t already have capital in the ground were hastily postponed—often indefinitely.

Commercial and industrial occupancy figures are likely to show a drop in demand, though data is not yet available and the depth of the decline remains a matter of speculation.

But although there are certainly fewer holiday and residential developments on the books, and office buildings and factory spaces are being delayed, government infrastructure spending remains huge.

The Gautrain, highway expansion projects in Cape Town and the Johannesburg-Pretoria corridor, new power stations and telecommunications infrastructure all have large amounts of committed funding and tight deadlines.

“Civil engineering is still going strong and there is an acute need for construction-related personnel,” says Ken Bidgood, a specialist recruiter for the construction sector. “Consultants and contractors are both buoyant.”

If stand and land prices become more reasonable and interest rates drop, an eventual bounce in the residential construction market is expected, but first the excesses of the good times need to be worked out of the system, Bidgood says.

“In the past three or four years the residential builders had it better than ever before.

“We had guys in the defence force or correctional services hired by building contractors even though they had no background or training.

“Logistics managers for retailers were suddenly project managers for residential construction. Those jobs are anything but safe.”

Mining companies and their associate enterprises have it hard. Thanks to a high ratio of labour costs to total expenses, the inability to forecast when the cycle will turn and the complete externality of commodity pricing, waiting out the downturn is not an option.

Only retrenchments can keep them in business.

During the latter part of 2008 about 14 000 South African miners were retrenched, with platinum miners Lonmin and Aquarius among those cutting the deepest at more than 5 000 and 2 000 jobs respectively.

De Beers is looking at laying off 1 000 workers—nearly a third of its local workforce—and DRDGold is retrenching 1 300.

Anglo Platinum will cut 13% of its workers this year. Barring a real surprise the losses will continue and the National Union of Mineworkers believes the final tally could be as high as 32 000, which excludes some collateral damage.

“We’ve also seen the negative trend in supplier industries and everyone who contracts to the mining industry,” says Bryan Kaschula, a mining, oil and gas specialist head-hunter.

“The equipment supply and servicing guys and the process plant suppliers are seeing contracts put on hold too.”

If you look hard you can find just the thinnest sliver of a silver lining, albeit ever so tarnished. Consultancy Frost & Sullivan has predicted that the coal sector may be spared thanks to Eskom’s voracious demand and its priority to increase output even as electricity demand slackens.

There is still great demand for highly skilled individuals, Kaschula says.

“People who are competent in terms of running an operation in difficult times as opposed to boom times are still needed,” Kaschula says.

Phillip de Wet

Phillip de Wet

Phillip de Wet writes about politics, society, economics, and the areas where these collide. He has never been anything other than a journalist, though he has been involved in starting new newspapers, magazines and websites, a suspiciously large percentage of which are no longer in business. PGP fingerprint: CF74 7B0F F037 ACB9 779C 902B 793C 8781 4548 D165 Read more from Phillip de Wet

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