Jobs on the line

Finweek English Edition - - Companies & Markets -

JOB LOSSES AND un­em­ploy­ment are the sad­dest con­se­quence of the global eco­nomic down­turn. Though more se­vere over­seas, South Africa is also see­ing its share of re­trench­ments. That should be bad news for the com­pa­nies listed in the busi­ness train­ing and em­ploy­ment agen­cies sec­tor of the JSE. It is – but not on the scale seen in ma­jor de­vel­oped coun­tries.

Two main rea­sons are that, while job losses and re­cruit­ment freezes are a re­al­ity at many com­pa­nies, there’s strong de­mand in SA for a num­ber of spe­cialised skills, such as en­gi­neer­ing. And there’s an on­go­ing need for a skilled work­force that can’t eas­ily be met. Even, sur­pris­ingly, for con­tract work­ers, usu­ally first in line for re­trench­ment.

“I do be­lieve we’re quite mis­un­der­stood. Peo­ple think em­ploy­ment agen­cies are tied to eco­nomic growth and con­trac­tions – but there are mit­i­gat­ing fac­tors in SA,” says Ad­corp CEO Richard Pike.

He notes while con­tract work­ers of­ten are the first re­trenched and that it may sound con­tra­dic­tory, there’s strong de­mand for such work­ers in the cur­rent mar­ket. “Many clients are looking for con­tract work­ers be­cause it gives them flex­i­bil­ity at times such as th­ese.”

Grenville Wil­son, CEO of Kelly Group, noted in a re­cent up­date to stake­hold­ers that SA busi­ness units in the first quar­ter did well and came in slightly ahead of bud­get, while the group’s op­er­a­tions in the US were a lit­tle be­hind ex­pec­ta­tions. He puts that down to a much greater im­pact from the neg­a­tive sen­ti­ment and re­ces­sion­ary cli­mate in the US.

Pike says other is­sues of­fer em­ploy­ment agen­cies some pro­tec­tion from the gen­eral eco­nomic down­turn. “We have se­lec­tive in­dus­try ex­po­sure. For ex­am­ple, all of us have very lit­tle ex­po­sure to min­ing.” He adds em­ploy­ment agen­cies have ben­e­fited from Gov­ern­ment’s push to up­grade skills de­vel­op­ment and train­ing.

But Gov­ern­ment could also be wav­ing a red flag. Wil­son says the pro­vi­sion for “de­cent work” in the ANC’s elec­tion man­i­festo will prob­a­bly lead to reg­u­la­tion of the

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