Staffing firm pins hopes on upswing

Workforce, which provides staffing, outsourcing and training services to companies, expects a better financial performance in the second half of its financial year, pinning its hopes on economic recovery, which may result in the absorption of more workers.

Workforce, which provides staffing, outsourcing and training services to companies, expects a better financial performance in the second half of its financial year, pinning its hopes on economic recovery that will probably result in the absorption of more workers.

SA is in the grip of the third wave of the Covid-19 pandemic, which has cast a shadow on the prospects of a quick recovery from the record economic slump of 2020, with millions of people without jobs.

The start of the second half has been marred by stricter lockdown restrictions, that have dented business confidence, which is essential in the decision-making process for companies to expand capacity, thus creating job opportunities.

CEO Ronny Katz put a positive spin on the outlook, saying while iterations of the lockdown would have weighed on businesses, the third wave of the pandemic was under control.

“We foresee a reinvigoration of the permanent placement industry, coupled with a change in emphasis in the areas in which staffing will be required. This demand should be further supported by the necessary infrastructure rollout and policies which government must follow,” Katz said.

“Typically in the second part of our financial year, our largest investment cluster, staffing and outsourcing, tends to have a much stronger period due to seasonal factors.”

The company returned to profitability in the six months to end-June as the economic recovery took hold, spurring demand for staff.

The training cluster experienced a much-improved performance compared with the same period in 2020, primarily due to the opening up of the economy.

The recruitment cluster was negatively affected by companies reducing staff and not reemploying people when lockdown levels eased. This was the result of companies not implementing policies for future growth and retaining a conservative approach to new recruits.

The financial services cluster adopted a conservative approach by reducing the amount of lending, due to instability in the work environment. This resulted in difficulty in collecting debt.

The labour market has shown signs of recovery in the first half of 2021, after a net 1.4-million jobs were lost in 2020 as the Covid-19 pandemic took a heavy toll on the economy, which shrank 7%, the most on record.

“Volumes of activity have not yet returned to levels experienced pre-Covid-19, but the recovery is significant. Workforce expects that the remaining six months will return a promising result,” Katz said.

Headline earnings per share, the main profit measure that strips out exceptional items, was 11.2c, swinging from a loss of 8.5c a year before. Earnings before interest, taxation, depreciation and amortisation (ebitda)

— the company’s main profitability measure — rose to R58m from a loss of R9.5m.

Workforce shares, which are highly tradable, were flat at R1.17 in late afternoon on the JSE.

THE COMPANY RETURNED TO PROFITABILITY AS THE ECONOMIC RECOVERY TOOK HOLD, SPURRING DEMAND FOR STAFF