Proposal to micro-manage recruitment in private sector
The establishment of job centres to improve access to the labour market by work seekers is regarded by government as a necessary step in the drive towards job creation, but the provisions of the proposed Employment Services Bill are so sweeping that they may, in fact, move all private sector recruitment in South Africa under the control of the state.
This could be one of the far-reaching consequences of the bill. Will the country really benefit from such expensive micro-management and state control? Let’s rather focus on infrastructure and mining as growth generators, along with initiatives to increase skills at all levels. If we do that, job creation will follow.
While the Employment Services Bill’s stated aims include promoting employment and improving labour market access, it does not clarify whether the provisions are intended only for first-time workers, the unemployed and the disabled. Instead, it gives sweeping powers to the Minister of Labour to promulgate regulations for the operation of public employment services (job centres) and private recruitment agencies.
As it stands, the bill would compel all employers and private recruitment agencies to register any new vacancy or new position with a job centre, obtain a shortlist of candidates and report placements, or reasons why candidates were not successful, within 14 days, with heavy fines for non-compliance. This has far reaching implications. The private – and public – sectors will not be able to hire without first considering people listed on the government database. This could extend the vacancy rate by months. Where people do not have the skills for the job, it is likely to cause delays without increasing employment.
Effectively, it makes all employers accountable to the state for all hiring. This would be taking labour market regulation to a new level and could well be a breach of the constitutional rights of companies and of individuals.
The principle of state job centres is a sound one if it is indeed intended to support the unemployed and give companies an inexpensive option for finding entry-level employees, graduates and semi-skilled labour. By offering a free or low-cost service to businesses, the job centres should be able to compete with fee-charging private recruitment agencies, thereby justifying their existence, without their services being made mandatory. This has worked well all over the world for junior-level and technical skills.
Job centres should be linked to functionally operating Sector Education and Training Authorities (SETAs) and tied to skills development and employability rather than simply being used to register candidates who may not meet minimum requirements for the job.
However in practice, the challenge for South African companies is in finding skilled workers. That’s where the shortages are. Two-thirds of vacancies handled by recruitment agencies are at the skilled level. Moreover, two-thirds of job-seekers are currently in employment. With an average staff turnover rate of 10% per year, 100 000 people are changing jobs every month. If all recruitment were to go through the job centres, it would create an unmanageable burden for employers, recruitment agencies and employees, not to mention the job centres themselves.
In the government-commissioned analysis of the four recent labour bills, Professor Paul Benjamin states that – if the intention of the Employment Services Bill is to require only “employers in certain categories” to notify the job centres of vacancies – it needs to be reworked to reflect that.
The establishment of job centres on a large-scale carries enormous cost and administrative burden for the Department of Labour, says Benjamin. South Africa currently has a total of 153 labour centres for unemployed job seekers with a caseload of some 27 000 people per office. This compares to Brazil (1 268 offices), Germany (848 offices) and the UK (853 offices), each with a caseload of fewer than 5 000 people per office.
The Department of Labour employs some 5 800 staff within the current labour centre system. Research shows that even just doubling the number of staff and UIF payouts would increase total expenditure by approximately R2-billion.
Of course, funding is a huge issue. But of even greater concern is lack of capacity. It is clearly not feasible to manage recruitment across all job levels across the entire country. The bill needs to be specific in defining the beneficiaries of job centres, namely the unemployed, and in supporting skills development so as to facilitate entry into the formal job sector.
Sandra Burmeister, CEO of the Landelahni Recruitment Group (www.landelahni.co.za).