The employment issue: No work available - and no wonder
Small businesses cannot cope with the demands made on them, writes Jana Marais
A lack of skills, complex and often-changing labour regulations, the high cost of compliance and no performance-related pay are some of the main challenges preventing employers from hiring more workers.
Small businesses, in particular, suffer as they do not have the skills to ensure compliance with all legislative and regulatory changes, and often cannot comply with stringent bargaining council agreements.
According to Guy Harris, facilitator of the Manufacturing Circle, which represents manufacturers, the barriers to employing more people are at two levels: confidence about the economy, and therefore in the profitability of the business, and companies' practical experience with employing workers.
Many businesses had received tough treatment at the hands of former employees at the bargaining council or the Commission for Conciliation, Mediation and Arbitration, said Harris.
"Also, there are generally low skills, often unmotivated employees and then many employment-related taxes, such as UIF, workmen's compensation, and the skills development levy. The problems seem accentuated for smaller businesses as they don't have the resources to work their way through the maze," he said.
Ferdie Bester, CEO of internet marketing company ClickMaven, with seven employees, agrees. "One is forced to employ an external professional to help put in place the necessary HR processes, contracts and disciplinary codes and procedures. It is burdensome, it takes up your time, and it's not cheap."
According to Bester, "finding and employing the right people is one of the biggest bottlenecks" impeding the growth of his business.
"You have to be incredibly careful when you employ someone. Firstly, it's really hard to get the right people. I'd say of every 100 CVs I receive, five might be worth an interview and then I'd be lucky to get one that may be right for the job.
"Secondly, you have to define the key performance indicators and job role very clearly - you can't just employ someone, see what they can do and then build the role around that. You simply can't employ people on an experimental basis," said Bester.
"If you employ someone and it doesn't work out, you can't easily get rid of him or her. It can cost you three to six months' salary, and that can mean the end of your business."
According to Alex Liu, managing director of WinCool Industrial Enterprise, one of the clothing factories facing shutdown in Newcastle for non-compliance with bargaining council rules, legislation makes it very easy for workers to be employed permanently, but almost impossible for employers to discipline or dismiss them.
In the clothing industry, productivity is a serious problem, and bargaining council wage structures do not allow for any production-incentivised pay.
"Our productivity is entirely dependent on the productivity of the worker.
''However, when it comes to wages, the council is only interested in the length of time a worker has been in your employ.
''What happens is that you have a machinist who has been working for you for two years earning much more than a new employee, who might be working a lot harder and more efficiently, and you can't pay this person more as a reward," said Liu.