Brokers show biggest labour market growth

Brokers show biggest labour market growth

2013-06-10 11:53

Johannesburg - According to the Adcorp Employment Index for May, labour brokers constitute a R44bn industry employing around 19 500 internal staff and just over one million agency workers or temps in South Africa.

In other countries, where labour brokers are called private employment agencies, the industry employs 741 000 internal staff and assign nearly 20 million agency workers in an industry worth R2.3 trillion globally.

Agency work now constitutes 7.5% of total employment in South Africa, and it is likely to grow further.

In countries with similar levels of economic development, temporary work represents between 12% and 19% of total employment, Loane Sharp, Adcorp’s labour market analyst, said.

“The use of labour brokers is overwhelmingly connected to peaks in demand - cited by 61% of Adcorp clients - and filling in for absent employees - cited by 48% of clients,” said Sharp.

“Temporary workers are not substitutes for permanent workers. They play different roles, connected to one or other cycle in the production process, that leads to variable demand for labour.”

Adcorp’s research shows that 3.9 million workers representing 29% of total employment are temporary in nature.

The overwhelming majority (74%) is employed by companies directly, and a minority (26%), mostly in medium and large business enterprises, are employed through agencies.

The growth experienced by labour brokers comes despite an overall drop in employment in May, which saw it fall at an annualised rate of 0.8%, according to the index.

The economy shed 13 097 jobs in May. It was mostly in the permanent, full-time work sector, which lost 16 108 jobs.

“The informal sector created 11 009 jobs during the month, whereas employment in the formal sector fell by 24 106,” said Sharp. “Aside from the informal sector, the only part of the economy that created jobs in May was the agency work sector, which created 370 jobs during the month.”

The May index showed job losses were focused in the retail and wholesale trade and manufacturing sectors, which lost 11 000 and 7 000 jobs respectively.

These job losses were offset to some extent by job creation in the government sector. Government employment remained strong, with 8 000 jobs created during the month.

Sharp pointed out that the unemployment rate in South Africa is one of the highest in the developing world. Officially it is 25% or, in terms of the broader definition which includes people who have given up hope of finding work, it could be as high as 37%.

About 52 % of job seekers using Adcorp have never worked before, 81% are young people and 94% are from disadvantaged backgrounds.

“Temporary employment is an important stepping stone for inexperienced African youth into formal, permanent jobs. About 28% go on to permanent employment within one year and 37% do so within three years,” said Sharp.

The index also shows that agency workers spend less time looking for work – 90 days, compared to two years and three months for the average South African job seeker.

- Fin24

  • Richard Scully - 2013-06-10 12:09

    That's interesting...shows what the employers think of the unions...

  • Teancum Smith - 2013-06-10 12:46

    Worrying about labor issues is just taking too much valuable time for business owners to deal with themselves. Labor is a problem and a good labor broker is a solution

  • Richard Scully - 2013-06-10 13:56

    The ANC restrictive labour law, the Unions continuous desire to strike and the workers desire to be lazy makes the labour broker the obvious choice

  • Makola Jack Mokgokong - 2013-06-10 14:07

    Please please zuma ban those sh**t in order for u to get another term

      Richard Scully - 2013-06-10 14:19

      You obviously want to see another million people out of work

  • ColinShephard - 2013-06-10 15:17

    The problem, as illustrated by some of the commentators, is that some people are stupid enough to believe that if brokers get banned the million people they employ will be permanently employed while in reality all that will happen is that a million people will be out of jobs and another thousand companies will close their doors. But on the other hand the anc and their supporters have broken everything else, why not kill the economy and be done with it.

      Xi - 2013-06-10 18:12

      Then who's gonna do the work? Ghosts?

      ColinShephard - 2013-06-10 20:03

      There will be no work, that's what you don't understand, companies use brokers instead of permanent workers to save on costs. Many companies can't afford to employ people full time. Take away the brokers and those companies will either scale down or close down. Either way the economy will be shedding hundreds of thousands of jobs.

  • Boulvy Selala - 2013-06-10 15:32

    This is not about NUM pushing to increase membership subscription,but about this daylight robbers in the name of employment agencies. This issue doesn't even qualify to be debated bcoz there is nothing special that this guys are doing that HR departments cannot do..They must starve n get proper jobs

  • Ben Bamuza - 2013-06-10 15:39

    get rid of those things,is a robbing game.,

  • Brian Simpson - 2013-06-10 16:57

    8000 new government workers. What do they do? They must be employed for the increasing UIF & social security payments.

  • Brian Simpson - 2013-06-10 17:01

    Labour brokers is simply a company used for temporary hire. There is a need for this type of company. Cosatu thinks that by doing way with labour brokers that it will make companies employ more people. This will not happen and it will prevent companies from exploring the possibilities of expanding if the facility is not available. Hence Cosatu are going to prevent employment in the future if they get their way.

      ColinShephard - 2013-06-10 21:36

      The benefits of brokers are that they give companies the flexibility to hire people without the risk of being stuck with them when their services are no longer required and secondly, people who are employed through labour brokers gain experience and knowledge which increases their chances of being employed full time later on. But with typical anc mentality the benefits are ignored for imagined short term benefits of making another popular but stupid decision.

  • Xi - 2013-06-10 18:09

    That just shows that companies are replacing permanent employees with slave labour (labour broking). They should be named and shamed.

      ColinShephard - 2013-06-10 21:38

      So xi why don't you start a business and start employing all of the millions of unskilled and unemployed people, I'm sure they would rather work for you than being slaves to labour brokers

  • Lavisto Dogman Mavisto - 2013-06-10 18:11

    We don't need labour brokers that's all

      ColinShephard - 2013-06-10 23:20

      then don't use them, let the people who are unemployed and need them use them

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