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Send  Share  RSS  Twitter  14 Jun 2010

LABOUR: Cautiously Optimistic Hiring Plans for the SA Labour Market


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The Manpower Employment Outlook Survey of hiring trends released today, reveals cautious optimism in the pace of hiring in the third quarter of 2010. The Net Employment Outlook for South Africa declines by one percentage point from the second quarter of 2010 to a cautiously optimistic +7%. However, employer hiring intentions improve by 5 percentage points compared to the third quarter of 2009.

South African employers forecast a moderate headcount growth for the third quarter of 2010 with 14 percent of employers expecting to increase headcount, 7 percent forecasting a decrease, and 78 percent expecting no change to their payrolls during the coming quarter.

“In the third quarter of 2010, we are seeing fewer employers indicating that they will add to their workforce in the coming quarter. However, the percentage of South African employers who indicated they would make ‘No Change’ to their staff levels increased from 75% in the second quarter to 78% this quarter,” observed Peter Winn, Manpower SA Managing Director. He continues, “With the relatively steady Net Employment Outlook from the previous quarter, this suggests conservative optimism and strength in the South African labour market with employers determined to maintain the talent they have as we work towards recovery.”

The Manpower Employment Outlook Survey for the third quarter 2010 was conducted by interviewing a representative sample of 752 employers in South Africa. All survey participants were asked, “How do you anticipate total employment at your location to change in the three months to the end of September 2010 as compared to the current quarter?”

The “Net Employment Outlook” figure is derived by taking the percentage of employers anticipating total employment to increase, and subtracting from this, the percentage expecting to see a decrease in employment at their location in the next quarter.

Employers in each of the five South African regions – Eastern Cape, Free State, Gauteng, Western Cape and Kwazulu Natal – forecast positive headcount growth during the third quarter of 2010. Western Cape and Gauteng employers report the strongest hiring intentions, marked by a Net Employment Outlook of +8%. Encouraging signs for jobseekers are reported in Eastern Cape where the Outlook is +7% and in Kwazulu Natal employers report a cautiously optimistic Outlook of +6%. Meanwhile, employers in the Free State report the weakest hiring intentions of +2%.

Quarter-over-quarter, hiring prospects in Eastern Cape are slightly stronger, with employers reporting an improvement of 4 percentage points in their Net Employment Outlook. However, Free State employers report a 10 percent decline in the Outlook. In Kwazulu Natal, the Outlook decreases by 4 percentage points. Elsewhere, the Outlook remains relatively stable.

Year-over-year, hiring intentions have strengthened in all five regions with Eastern Cape employers reporting the most noteworthy increase of 14 percentage points, while in Western Cape, the Outlook improves by 7 percentage points with Kwazulu Natal employers reporting a 6 percentage point improvement in hiring prospects.

Employers in eight of the 10 industry sectors forecast positive hiring activity in the third quarter 2010. Restaurants and Hotels sector employers report the most optimistic hiring plans, with an Outlook of +22%. A favorable hiring climate is expected in the Wholesale and Retail Trade sector with an Outlook of +19% and the Mining and Quarrying sector employers report a respectable Outlook of +14%. In the Agriculture, Hunting, Forestry and Fishing sector employers anticipate a steady headcount growth, with an Outlook of +11%. However, employers in both the Manufacturing sector and the Construction sector forecast negative headcount growth, with Outlooks of -7% and -4%, respectively.

Quarter-over-quarter employers report weaker hiring plans in six industry sectors. The Manufacturing sector Outlook weakens by 7 percentage points, while employers report 4 percentage point declines in the Finance, Insurance, Real Estate and Business Services sector and a six percent decline in the Public and Social sector. Employers in the Restaurants and Hotels sector report a stronger Outlook with a 14 percentage point improvement, the Wholesale and Retail Trade sector Outlook improves by 8 percentage points, and the Agriculture, Hunting, Forestry and Fishing sector Outlook is 2 percentage points stronger.

However year-over-year, the Outlook is stronger in seven industry sectors. The steepest improvement is reported by the Mining and Quarrying sector employers whose Outlook is a considerable 25 percentage points stronger, followed by the Manufacturing sector with an increase of 14 percentage points. Employers in the Agriculture, Hunting, Forestry and Fishing sector and the Construction sector report improvement in these sectors by 9 percentage points.

Globally, employer optimism in the labour market is gradually improving, with employers in 30 of the 36 countries and territories indicating stronger hiring plans compared to 12 months ago and 23 reporting improved quarter-over-quarter hiring plans. While four countries report negative hiring expectations, it is an improvement compared to the 13 European countries reporting negative outlooks 12 months ago. Globally, the strongest job prospects are reported by employers in India, Brazil, Taiwan, China, Peru, Australia and Singapore, in contrast to the weakest hiring plans reported by employers in Italy, Spain, Ireland and Greece.

Employer hiring plans remain mixed across the 18 countries surveyed in the EMEA region, however there are encouraging signals in the labour market with hiring activity expected to be positive in 13 countries and only Italy, Spain, Ireland and Greece report negative Net Employment Outlooks. During the same period last year, 13 countries were reporting negative hiring expectations. “Hiring activity in the region is expected to be strongest in Poland, Germany and Sweden. Even though South Africa’s hiring activity is not ranked among the highest in the region, an increase is forecast due to the demand that the Soccer World Cup creates,” says Winn.

Despite uncertainty in the European market, across the world there is improved optimism towards hiring, which is typical for this phase of the recovery. The Asia Pacific region, with the exception of Japan, continues its strong hiring intentions with employers in China and Taiwan indicating their most robust hiring plans since the Manpower survey began in 2005 while the forecast from U.S. employers is similar to three months ago but notably improved from last year at this time. The strongest hiring plans in the Americas are forecast by employers in Brazil, Peru and Costa Rica.

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