Temporary Employment Services in South Africa Submission to the Parliamentary Portfolio Committee on Labour 26 August 2009

Business Unity’s position  Labour broking must be seen in the context of South Africa’s national priorities  4.1 million South Africans cannot find work  1.5 million South Africans have given up hope of finding work  South Africa is currently experiencing the highest rate of job losses since 1991  Labour brokers are pivotal facilitators and enablers of employment  they are a speedy means of access to properly recruited employees  they facilitate temporary and permanent employment, especially for unemployed youth  they facilitate skills development, especially for school-leavers who cannot get work experience  Some forms of labour broking can give rise to abuse, and BUSA does not support such practices  However – Do the proposed regulations strengthen what is positive, and eradicate what is negative?

Contract employment around the world Extent of Contract Employment in OECD Countries Growth of Contract Employment in OECD Countries

South African contract employment statistics Contract employment by sector Contract employment vs. Sector volatility

Just plain wrong: DoL’s “model” of employment patterns

The national importance of the labour broking industry

No.Services ProvidedOutcomeReported Benefit 1Recruitment services Continuous availability of large numbers of qualified candidates (i.e. competent, skilled and/or experienced) at market-related wages Reduced recruitment lead times; training success rates; Improved fit and customer service 2Training services Continuous competency development for entry-level, intermediate and experienced employees Reduced competency gaps; Improved customer service 3Payroll services Outsourced payroll and related administration (timesheets, absenteeism, etc.) Reduced unit costs due to scale; Reduced management and administrative burden 4Attendance management services Controlled absenteeism; Just-in-time replacement of absent employees; Proactive planning and initiatives calendar Reduced absenteeism; Reduced absenteeism- related customer service crunches, improved adherence, less disruption of customer service 5Performance management services Retention of high achievers; Recognition of consistent performers; Improvement or exit of low achievers Improved on-the-job performance and productivity; Reduced staff costs, and improved customer service 6Scheduling and rostering services Dynamic adjustment of staffing levels to match business volumes Improved customer service during peak periods; Reduced staff costs during valley periods, maximum productivity when shifted optimally 7Career management services Multi-skilled and up-skilled employees that can be cross utilised or progressed based on personalized career paths Reduced training costs; Reduced ongoing recruitment costs; High on-the-job performance; High employee retention 8Labour relations services Risk mitigation through defensibility and standardization of labour practices Managerial support, especially related to on-the- job performance 9Workforce optimization services Optimization of labour costs through advanced analytics, software, technology, and other methods Increased performance and productivity; Reduced total staff costs; Increased employee tenure and retention

Legislative and regulatory options  Business has grave concerns about the Dept. of Labour’s “Discussion Document” tabled at NEDLAC  The proposed regulations have been hastily developed using little or no industry data  The proposed regulations have not considered international research and options  The proposed regulations have not considered unintended consequences  The proposed regulations have not considered enforcement mechanisms  The proposed regulations impose a heavy penalty on compliant operators and make it likely that underground operators and associated abuse will increase  Business Unity’s position in summary  Existing laws and regulations are sufficient to address abuses  Enforcement is lacking and specific enforcement institutions need to be bolstered  Partial or “piecemeal” regulation will give rise to unintended consequences  A co-regulatory/co-determination framework is the only workable option