South African employers report conservative hiring intentions for the October to December 2015 period, with 13% of employers forecasting an increase in staffing levels, 7% anticipating a decrease, and 78% expecting no change.
Once the data is adjusted to allow for seasonal variation, the outlook stands at just 7%. While hiring intentions remain relatively stable both quarter-over-quarter and year-over-year and the outlook remains positive, it has now declined slightly for three consecutive quarters.
Lyndy van den Barselaar, MD of Manpower SA, provides insights into why the South African employment market is expected to continue to provide conservative opportunities for job seekers into the fourth quarter of the year: “Some of the country’s main industries have recently been affected by a large number of retrenchments, which has resulted in decreased employee and business confidence.
“Paired with the falling rand value, and the continued uncertainty in power availability, the current business climate is not attractive to foreign investors, resulting in muted growth for the economy. Mixed business signals make it difficult for employers to commit to actively recruiting new candidates, hence hiring intentions have remained positive, but relatively stable in comparison to the prior quarter or last year at this time.”
Payrolls are forecast to grow in all five regions during the fourth quarter of 2015, with the strongest hiring pace anticipated by Western Cape employers who report a net employment outlook of +12%. Elsewhere, employers report encouraging signs for job seekers in both Eastern Cape and Gauteng, where outlooks stand at +7%, while outlooks of +4% and +3% are reported in KwaZulu-Natal and Free State, respectively.
“The City of Cape Town is a popular tourist destination, particularly in the summer months towards the last quarter of the year. Increased tourism will not only create temporary employment for many job seekers, but will also contribute positively to the economy of Western Cape,” says van den Barselaar.
Hiring prospects strengthen by 3 percentage points in Free State when compared with the previous quarter, while remaining relatively stable in Western Cape. Elsewhere, employers report no change.
Year-over-year, the Outlook for Eastern Cape is 6 percentage points stronger. Relatively stable hiring plans are reported in both Gauteng and Western Cape, while employers report no change in both Free State and KwaZulu-Natal.
Employers in nine of the 10 industry sectors forecast payroll gains in the next three months. The strongest labour market is anticipated in the Electricity, Gas & Water Supply sector, where the net employment outlook stands at +16%. Wholesale & Retail Trade sector employers expect a steady hiring pace, reporting an outlook of +14%, while the outlook for the Agriculture, Hunting, Forestry & Fishing sector stands at +13%.
Elsewhere, employers in two sectors – the Construction sector and the Transport, Storage & Communication sector – report cautiously optimistic hiring plans with Outlooks of +9%. Meanwhile, Mining & Quarrying sector employers anticipate a decline in staffing levels, reporting an Outlook of -4%.
“As the current energy crisis continues to affect South African home and business owners, the number of people and businesses investing in alternative energy sources – such as gas, solar and generators – continues to increase. This translates into opportunities for those businesses and individuals that possess skills in manufacturing, installing, maintaining and repairing alternative energy sources,” explains van den Barselaar. “Reports of impending water shortages across the country are also fueling growth within the Water Supply sector.”
Quarter-over-quarter, hiring intentions weaken in five of the nine industry sectors. The most noteworthy declines of 5 percentage points and 3 percentage points are reported in the Finance, Insurance, Real Estate & Business Services sector and the Manufacturing sector, respectively. However, hiring prospects improve in four sectors. A considerable increase of 9 percentage points is reported by Wholesale & Retail Trade sector employers, while the Agriculture, Hunting, Forestry & Fishing sector Outlook is 5 percentage points stronger.
Employers in four of the 10 industry sectors report stronger Outlooks when compared with 4Q 2014. The most notable increase of 10 percentage points is reported in the Wholesale & Retail Trade sector, while Electricity, Gas & Water Supply sector employers report an improvement of 9 percentage points. Meanwhile, hiring plans weaken in four sectors, including the Mining & Quarrying sector and the Finance, Insurance, Real Estate & Business Services sector, with declines of 8 and 4 percentage points, respectively.
Participating employers are categorised into one of four organisation sizes: micro businesses have less than 10 employees; small businesses have 10-49 employees; medium businesses have 50-249 employees; and large businesses have 250 or more employees.
Payrolls are forecast to grow in all four organisation size categories during the coming quarter. Large employers report the strongest hiring intentions with a net employment outlook of +20%, while the outlook for medium employers stands at +10%. Elsewhere, Small- and Micro-size employers report Outlooks of +4% and +2%, respectively.
When compared with the previous quarter, hiring intentions strengthen by 4 percentage points for large employers while remaining relatively stable in the other three organisation size categories.
Year-over-year, employers in large firms report an outlook improvement of 8 percentage points, while increases of 4 percentage points and 2 percentage points are reported by medium- and micro-size employers, respectively. However, Small employers report a decline of 3 percentage points.
“While South Africa’s Net Employment Outlook of +7% reflects conservative hiring intentions, it is important to note that employers in all five of the provinces who participated in the survey displayed positive employment outlooks, as did employers in all but one of the industry sectors, and only 7% of respondents expected to decrease staffing levels in the fourth quarter,” says Van den Barselaar.
“It is imperative that the current socio-economic and industrial challenges are resolved, and effective policies and plans are put into place to encourage further investment into South Africa, and facilitate for the creation of employment opportunities. It is important that opportunities are created for the training and up-skilling of current employees to equip them with the necessary skills for the rapidly evolving technological space and business environment,” she adds.
Across the globe, employers in India and Taiwan report the strongest hiring plans, while employer confidence in Japan is growing steadily with job seekers likely to benefit from the most optimistic forecast reported since the first quarter of 2008. Similarly, hiring intentions in the US continue to improve, and the current outlook is the strongest reported since the fourth quarter of 2007.
Conversely, employer optimism continues to dwindle in Brazil; the fourth-quarter forecast is the weakest among the 42 countries and territories participating in the survey, and sinks to its least optimistic level since the survey was launched. Labor market activity is also slowing in China where employers forecast the weakest hiring environment in more than six years. Meanwhile, the forecast remains negative in Italy, and turns negative again in Greece, France and Finland.