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Adcorp introduces first comprehensive indicator of employment trends

Last modified on 2/12/2015 10:48 AM

Adcorp Holdings is spearheading the introduction of the first Staffing Industry Index™ in South Africa. The Staffing Industry Index™, a research-based report, brings to Corporate South Africa’s employment and recruitment market the first comprehensive index on the country’s permanent and flexible staffing demands.

While it seeks to address the deficits in reporting and analysis of the employment landscape in South Africa, the Staffing Industry Index™ will provide investors, government and the private sector with a scientifically validated and cross-referenced platform of industry intelligence.

“The South African Staffing Industry is an industry that is often misunderstood, misrepresented and without a true sense of its real positive contribution to national strategic priorities, such as skills development and job creation,” says Hilton Brown, Head of Group Business Development of Adcorp Holdings.

“The index will help public and private sector organisations to benchmark their organisations’ resourcing strategies on a monthly, quarterly and longer-term basis against a national metric as an economic indicator of South African employment trends overall.”

Globally, the staffing market generate annual revenues touching $250 billion. Locally, the industry is worth R27 billion annually or 1,13% of the international total.

Werner Smith, Head of Adcorp’s Group Strategic Research Centre said around 11% of South African staffing requirements were permanent placements with the industry driven by temporary, flexible or contractual employment options.

“The comprehensive annual index will be released in February 2009, initial results across the various sectors in the macroeconomic environment will be released on a quarterly basis,” said Smith.

The latest data reflected that companies would continue restructuring and streamlining processes in the current business environment, resulting in limited employment growth opportunities within manufacturing, trade and the financial, real estate and business services sectors.

The Staffing Industry Index™ is a four-pronged approach and is made up of four individual indices: a macroeconomic index, which measures the impact on the acquisition or shedding of skills and the impact macroeconomic indicators have on the staffing sector, on job creation and skills development in South Africa; a demand index to measure the current, medium and long-term appetite of Corporate South Africa as a consumer of skills; a supply index to determine the gap between supply and demand for informed decision making and strategy development; and the remuneration index to determine the correlations between demand, supply and the remuneration of skills in South Africa.

“Initially, the study will be conducted across 20 industry sectors and will be expanded at a later stage with the international study, which covers 34 sectors,” added Smith.  Key sectors in the permanent recruitment and flexible staffing blue collar market study will cover mining, manufacturing, construction, trade and financial, real estate and business services sectors.

“The manufacturing sector has been substantially affected by the current economic slowdown with some motor vehicle manufacturing plants shifting to a four-day week. South African banks and financial institutions were following international trends in laying off or consolidating departments resulting in job losses.

However, large-scale infrastructural development projects – primarily driven by the private sector – were contributing to substantial employment creation expected to continue for several years.  The global resource demand was also driving employment in mining and the index showed that human capital development in mining houses and construction has been vibrant through expansive training programmes to create a supply of skilled workers.

The buoyancy in demand for labour in the mining and construction industries was reflected in larger construction companies often loathe to tender and accept projects given the dire need for skilled workers and full order books.  Indications were that the demand for technically skilled people in permanent employment would escalate, while the demand for commercially-skilled middle and senior management has been well-documented.

Gaps in this sector of the economy were driven by people relocating internationally. However, the index raised a red flag by highlighting that given the low skills base within South Africa, the economy was stilted in its ability to create employment during periods of high interest rates.

“Lower interest rates have a greater influence on the South African employment position than weaker exchange rates, commodity prices or export performance. In the current market, this is particularly worrying,” Smith said. The interest rate increases have led to employment growth falling from 4% to 2% with permanent job growth slowing down. This situation significantly affects South Africa’s ability to halve unemployment rates by 2014 in line with the Accelerated and Shared Growth Initiative for South Africa (Agsisa).

Smith added that around 29 000 flexible employees were absorbed into the permanent employment pool annually. Focusing on skills development, the industry afforded entry-level work seekers the opportunity to gain experience. Research showed that 83% of these people were black and half were previously unemployed.

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