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Cape Town - The number of public holidays celebrated during the course of April and early May, could have a knock-on effect for business productivity, and in turn, the economy, warns Christo Botes, executive director of Business Partners.
This had resulted in some calling for the number of holidays to be reduced.
While it has been reported that the effect of one public holiday can cost the country more than R1bn, the country’s number of public holidays are in line with many developed countries around the world.
This highlights that the number of public holidays may not be the issue at hand in terms of productivity.
“While business production is likely to be affected by public holidays, the impact can be managed given that these days are planned in advance," said Botes.
"It allows businesses to plan appropriately and factor in the possible effects of fewer work days.”
Botes explained that South Africa has 13 public holidays during the course of the year, while Malaysia has 12 and the United States (US), Singapore and France have 11 each.
The only exception would be China, with only four public holidays. China, also has specific days where a certain population groups, such as women or children, receive a day off.
Botes said that the biggest issue for businesses with April is that the month contains the least productive days in the year.
“With the local economy beginning to recover, the impact of fewer productive work days will result in an economic recovery taking slightly longer,” said Botes.
Impact on business
He said this is not to say public holidays are negative for all business, as certain industries, such as holiday resorts and the hospitality industry, generally generate good returns during this period.
He added that while trade will continue in the country with individuals continuing to spend, this is only consumption spending as opposed to contribution towards economic growth.
“While people will visit resorts and continue to shop at retail stores, factories across the country will close resulting in no production taking place, and this is where the real economic growth stems from,” said Botes.
He explained that the negative impact is more or less the same for small and medium enterprises in the manufacturing sector, as it would be for larger businesses, in that both will lose production days.
Urban service industries, such as hair salons and corner grocery shops, are the businesses likely to be more affected.
“These businesses rely on their regular customers and if these individuals are taking extended holidays, they are likely spending their money elsewhere," he said.
"This results in the shift of turnover from normal retail business to holidays resorts elsewhere in the country, such as around the coastal or inland resorts and game reserves.”
Botes said that in order for businesses to manage public holidays and minimise downtime, sufficient planning needs to be done in terms of production, staff and cash flow.
“The key is effective planning and management. When approving leave, business owners need to ask themselves if they can afford to lose a certain number of their staff over this extended period," he said.
"If the business is quiet, it may make sense to give employees leave, however, if it is done to the detriment of the business, this could result in less sales and the possibility of more sales for your competitors.”
Botes said business owners should also be looking at how they can capitalise on the public holidays in order to drive revenue.
“If business owners applied their mind to what the holiday really represents, business could celebrate the holidays in an appropriate way with their customers and generate revenue as a result," he sadi.
"This mind-set will allow businesses to capitalise on the possible opportunities these holidays may present and allow the possibility to generate more sales.”
This had resulted in some calling for the number of holidays to be reduced.
While it has been reported that the effect of one public holiday can cost the country more than R1bn, the country’s number of public holidays are in line with many developed countries around the world.
This highlights that the number of public holidays may not be the issue at hand in terms of productivity.
“While business production is likely to be affected by public holidays, the impact can be managed given that these days are planned in advance," said Botes.
"It allows businesses to plan appropriately and factor in the possible effects of fewer work days.”
Botes explained that South Africa has 13 public holidays during the course of the year, while Malaysia has 12 and the United States (US), Singapore and France have 11 each.
The only exception would be China, with only four public holidays. China, also has specific days where a certain population groups, such as women or children, receive a day off.
Botes said that the biggest issue for businesses with April is that the month contains the least productive days in the year.
“With the local economy beginning to recover, the impact of fewer productive work days will result in an economic recovery taking slightly longer,” said Botes.
Impact on business
He said this is not to say public holidays are negative for all business, as certain industries, such as holiday resorts and the hospitality industry, generally generate good returns during this period.
He added that while trade will continue in the country with individuals continuing to spend, this is only consumption spending as opposed to contribution towards economic growth.
“While people will visit resorts and continue to shop at retail stores, factories across the country will close resulting in no production taking place, and this is where the real economic growth stems from,” said Botes.
He explained that the negative impact is more or less the same for small and medium enterprises in the manufacturing sector, as it would be for larger businesses, in that both will lose production days.
Urban service industries, such as hair salons and corner grocery shops, are the businesses likely to be more affected.
“These businesses rely on their regular customers and if these individuals are taking extended holidays, they are likely spending their money elsewhere," he said.
"This results in the shift of turnover from normal retail business to holidays resorts elsewhere in the country, such as around the coastal or inland resorts and game reserves.”
Botes said that in order for businesses to manage public holidays and minimise downtime, sufficient planning needs to be done in terms of production, staff and cash flow.
“The key is effective planning and management. When approving leave, business owners need to ask themselves if they can afford to lose a certain number of their staff over this extended period," he said.
"If the business is quiet, it may make sense to give employees leave, however, if it is done to the detriment of the business, this could result in less sales and the possibility of more sales for your competitors.”
Botes said business owners should also be looking at how they can capitalise on the public holidays in order to drive revenue.
“If business owners applied their mind to what the holiday really represents, business could celebrate the holidays in an appropriate way with their customers and generate revenue as a result," he sadi.
"This mind-set will allow businesses to capitalise on the possible opportunities these holidays may present and allow the possibility to generate more sales.”
