Creating permanent jobs South Africa - Despite President Jacob Zuma having recently declared that 2011 is South Africa's year of job creation, more than 500,000 school leavers and students will once again face very grim employment prospects, as they potentially join the millions of other South African's currently in the unemployment line at the end of this year. Employment in South Africa has dropped by nearly 1 million since the recession, with an estimated 230,000 more post-recession retrenchments suspected to take place this year, across most labour intensive sectors outside of government.

In a recent media discussion, Adcorp Labour Economist, Loane Sharp said that, although South Africa experienced a 'mild' recession in comparison to the rest of the world, the country reacted with an exaggerated response on the employment front, as many businesses took advantage of the recession to get rid of poor performing people due to 'operational' reasons. While many poor performing employees hide behind the law, or rely on collective bargaining councils, these employees need to realise that they are still at risk of losing their jobs.

South Africa has the 5th worst level of industrial conflict worldwide and is currently experiencing the highest level of employer-employee tension as a result of industrial relations in its history. This rise in disconnect between employers and their employees will certainly continue to contribute to the increase in retrenchments.

A further contributor to the ongoing retrenchments is the disproportion between labour productivity levels and wage expectations. Although companies might publicly agree to the demands in wage increases imposed by unions, in most cases these companies are unable to afford it and will privately enter into the process of making job cuts. Many companies have already started implementing technology enhancements that will reduce the need for human labour, as they increasingly introduce automation in various aspects of their businesses.

South Africa has the lowest level of permanent employment of most significant countries, with temporary labour at 30% of the formal employment labour force, and as long as businesses are uncertain about the country's economy and its legislation, they will remain reluctant in creating permanent job opportunities.

Gillian Meier, CEO of South African Job Portal, Jobs.co.za, commented that in January this year (peak job hunting season for school leavers) the job site saw an increase of 60% in new job seekers registering their CV's for employment, in comparison to the previous year's peak season. In the last six months, the site has seen a further 21% rise, with just fewer than 16,000 new job seekers registering on average each month. The site currently has around 570,000 active job seekers registered on its database, of which 77% would prefer permanent employment, while only 3% are looking for temporary employment opportunities. The remaining 20% of job seekers are open to any job offer, whether temporary or permanent.

The government has announced plans to alleviate the threat of unemployment in a bid to create more jobs through infrastructure development, agriculture, mining and beneficiation, manufacturing, the "green" economy, and tourism. A R9-billion jobs fund has been set to finance new job-creation initiatives over a three-year period and would be complemented by an amount of R10-billion to be set aside by the Industrial Development Corporation (IDC) over the next five years for investment in projects with high job-creation potential.

President Zuma, in his recent State of the Nation address in Parliament, reiterated that the private sector would be key in the country's efforts to create more jobs and that business, labour and communities needed to work together to beat unemployment.

Biz-Community/21/09/2011