“The shortage of skilled workers is the biggest constraint to business growth!” This is a quote extracted verbatim from an international survey that was recently conducted by accounting firm Grant Thornton involving 7000 privately held businesses in 36 economies across the globe. 33% of organisations in South Africa that participated in this survey cited that regulations, in particular ’employment laws’, are inhibiting growth; and, surprisingly, red tape even outranks ‘cost of finance’ and ‘reduction in demand’ as barriers to growth.
Another study on privately owned organisations in South Africa, that was released by PricewaterhouseCoopers (PwC) in 2009, found the following: “South Africa’s private organisations are finding that skilled labour and middle management are in short supply. They also rate crime, the cost of resources and raw materials, employment regulations, and fraud in their organisations as the most significant detracting factors in doing business”. PwC especially highlighted the fact that human capital is one of the key building blocks to ensure the success of a private organisation, but is also one of the main challenges facing private firms in South Africa.
Despite a skills shortage being regarded as a constraint to successful organisations, only 1% of respondents said that they were driven by a strategy aimed at human resources.
Here’s one solution…
A way in which organisations can address skills shortages is by drawing on returning South Africans who have been working abroad. “Not all South Africans who work abroad leave South Africa for good. Everywhere in the world young, ambitious professionals have a natural desire to work on offshore assignments. Now we have large numbers of returning South Africans because countries need to look after their own skills base and thus they are not renewing work permits. These people bring with them a level of experience and perspective that is valuable to business,” says Sandra Burmeister, CEO of Landelahni Business Leaders.
Elaine Porteous, Branch Manager for Interim and Executive Search at Tech-Pro Personnel, pointed out to SmartProcurement that organisations should now consider recruiting some of those scarce skills that have recently become available on the market due to voluntary retrenchments: “It is now the time to get ready for the next up-tick in the economy and to hire the newly available procurement and supply chain professionals on a contract basis”.
Flexible staffing solutions in the news
Kay Vittee, Managing Director of Quest Flexible Staffing Solutions, recently said that the current socio-economic situation lends itself towards flexible staffing: “The trend is to retain a core of permanent staff, while using flexible staff to manage peak work-loads, staffing up and down in line with business demands. This model not only facilitates optimal staffing efficiencies, but allows both employers and employees to identify key performance areas and employment goals”.
Gayleen Baxter, COO of Kelly Personnel Group, says many professionals and technical people are taking the flexible option: “The face of flexible staffing has changed immensely since its introduction about 39 years ago. Organisations are now using it as part of a competitive workforce management strategy to top up their bottom-line and to reduce the complications that come with hiring and firing”.
Clearing up the definitions – The term ‘flexible staffing’
‘Temporary help’ is a concept whereby organisations bring in someone, usually for lower skilled jobs, to cover for a vacation, maternity leave or to help with a short-term project. ‘Contingent staffing’ is a much broader concept that includes all sorts of contractors, consultants and free agents, often for reasonably long periods. The driving business reason is still flexibility: organisations want to be able to bring in the talent they need without making a long-term commitment.
‘Temporary staffing’ under the spotlight
The Business Day edition of 25 February 2009 reported on pending legislation that has the objective of cleaning up the temporary staffing industry where some 2000 ‘temp’ suppliers operate freely in an environment that offers low barriers to entry. It is reported that this is in line with the ANC’s manifesto which aims to clean up the industry and reduce the number of fly-by-night operators. This approach is also supported by the market leaders in temporary staffing, such as the Kelly Personnel Group.
What about staff turnover – is it important?
Just over half of organisations (53%) in the PwC Survey said that their staff turnover was between 1% and 10% last year, which is regarded as a good level. Although a low staff turnover was considered to be one measure of success of a private organisation, it was worrying that 31% of the private organisations indicated a staff turnover of 11% or more, while 9% did not even know what this number actually was.