The report explores developments in labour recruitment and provision of staff, the current state of the sector and factors influencing the success of the industry. The report profiles 18 companies including major industry players such as the Workforce Group which provides temporary employment services mainly for the retail and hospitality sectors and Adcorp, which has restructured its board, management and business. The report includes comprehensive profiles on recruitment and employment service organisations aligned to president Cyril Ramaphosa’s Youth Employment Service (YES) initiative such as Lulaway and the Harambee Youth Employment Accelerator.
The South African Labour Recruitment Industry
This report focuses on the complex labour recruitment industry which plays a significant role in the South African economy. The International Confederation of Private Employment Agencies estimates approximately 2,600 agencies and 13,000 people are directly employed in the recruitment industry, numbers which appear to be declining. Based on reported industry contribution to the skills levy in 2017, formal industry turnover value was R45bn in 2017, a decline of R3bn from the previous report in 2015.
The local industry is dominated by temporary employment services, also known as labour brokers.
A Changing Sector
A recent Constitutional Court decision on the deeming provision of the Labour Relations Act, which ruled that contract workers are entitled to full-time employee benefits after three months of contracted service, will have a significant effect on the industry and on employment trends. With the unemployment rate at 27.2% in Q2 2018 and the number of unemployed looking for a job estimated at 5.8 million people, this sector is critical to South Africa’s employment outlook. The outlook for employment, however, is changing. Executive search firm Heidrick & Struggles reports that companies will significantly reduce staff numbers and only 30% of current employees will be permanent staff by 2020, largely due to advances in automation and off-site workers.