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Johannesburg - Despite a myriad of problems - from rising crime to skills' shortages - many South African private companies, expect positive turnover growth in the next few years, according to a business survey released on Monday.
The PricewaterhouseCoopers SA (PwC) second private company services (PCS) business insights survey reported that the short supply of skilled labour and skilled middle management was affecting companies.
"On the regulatory front, legislation such as the Broad-Based Black
Economic Empowerment Codes and the National Credit Act are proving operationally challenging.
"They also rate crime (such as robberies and truck hijackings), the cost of resources and raw materials, and fraud within their companies as the most significant detracting factors in doing business," said PwC.
Andries Brink of PwC said 90% of the 570 respondents anticipated positive turnover growth over the next two
to three financial years.
"This is very encouraging, considering the survey was conducted in the aftermath of global financial instability relating to investment banking. A total of 67% of respondents anticipate 5% turnover growth in real terms in the next few years.
"Many respondents view the current economic slowdown as temporary, particularly due to the fact that South Africa's financial sector remains on a sound footing as well as the absence of recessionary trends in most emerging market economies."
Human capital was highlighted as one of the key building blocks to ensure the success of a private company, but also as one of the main challenges currently facing private companies in South Africa.
"Skilled labour and middle management appear to be the levels where the majority of private companies experience a skills shortage. Despite a shortage of skills being regarded as a constraint to businesses remaining successful, only 1% of survey respondents indicated they are driven by a strategy aimed at human resources," said PWC.
Some 53% of respondents indicated that their staff turnover was between 1% and 10%.
Brink added: "Privately-owned companies cannot compete with the large corporates in terms of remuneration and therefore need to use more creative ways of attracting and retaining staff, such as flexibility in working hours, ownership options, profit sharing and incentive schemes."
Most respondents indicated that they were aiming for growth and expansion, or consolidation, within the next 12 months. This would be achieved through creating better customer value for clients, the training of employees and through more effective marketing of products and services.
- I-Net Bridge
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