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Survey shows cautious hiring trends ahead

Fri, 17 Jun 2011 11:07

The Manpower Employment Outlook Survey of local hiring trends released today, reveals that South African employers are reporting cautious third quarter hiring intentions. Once seasonal variations* are removed from the data, South Africa’s Net Employment Outlook stands at a modest +3%. When compared with the previous quarter, hiring intentions are unchanged, while year-over-year, the Outlook is 8 percentage points weaker.

“Employer hiring expectations are stuck in low gear. For the third consecutive quarter, employers report conservative hiring plans. While our data indicate some modest job growth over the next three months, overall employer confidence continues to be subdued, and the Outlook remains at its weakest level since the survey began in 2006,” comments Peter Winn, Manpower South Africa Managing Director.

“However, this reserved hiring environment may be affected by the new legislation to be implemented by the ruling government after the recent national democratic elections. Employees are positive and looking forward to the creation and roll-out of employment opportunities as promised by these authorities during their election campaigns. In the meantime, over eight of every 10 employers have indicated that they will keep their workforces intact for the next three months, signifying relative stability in the workplace through until the end of September.”

This survey for the third quarter of 2011 was conducted by interviewing a representative sample of 750 employers in South Africa, where 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 2011 as compared to the current quarter?” While 7 percent of employers expected to increase staffing levels, 8 percent forecast a decrease and 84 percent said they expected to maintain their current workforces intact during the July - September time period.

With a modest +3% for the third consecutive quarter, the Net Employment Outlook for South Africa matches the weakest forecast reported by employers since the survey began in the fourth quarter of 2006. Even though third-quarter hiring intentions are mostly positive, employers in seven of 10 industry sectors and four of five regions report weaker quarter-over-quarter hiring plans.

In a regional comparison, employers in four of the five regions forecast an increase in third-quarter staffing levels. Opportunities for job seekers are strongest in Free State, with a Net Employment Outlook of +6%, while modest headcount growth is anticipated in Gauteng, with an Outlook of +4%, and Western Cape, where employers report an Outlook of +3%. Kwazulu Natal employers report cautious hiring plans with a Net Employment Outlook of +1%. In Eastern Cape, employers report uncertain hiring prospects with an Outlook of -1%.

Quarter-over-quarter, hiring intensions remain relatively stable in four of the five regions: Free State, Western Cape, Gauteng and Eastern Cape. In Kwazulu Natal, the Outlook is slightly weaker by 2 percentage points than the previous quarter.

Year-over-year, the Outlook weakens in four of the five regions. The Eastern Cape Outlook declines by 12 percentage points and employers in Western Cape report a 10 percentage point decrease. In Gauteng, employers report a decline of 7 percentage points, while the Kwazulu Natal Outlook weakens by 6 percentage points. The Outlook remains fairly stable in Free State.

Employers in seven of the 10 industry sectors predict an increase in staffing levels during the upcoming quarter. Strong hiring expectations are reported in the Mining & Quarrying sector, where the Outlook stands at +20%. Elsewhere, employers in the Electricity, Gas & Water Supply sector report an Outlook of +5%, and modest Outlooks of +3% are reported in the Agriculture, Hunting, Forestry & Fishing, Manufacturing and Public & Social sectors.

Meanwhile, negative hiring intentions are forecast in the Construction sector, with an Outlook of -4% and weaker hiring expectations are reported by employers in the Restaurant and Hotel sector with a -1% Outlook. Five industry sectors – Restaurants & Hotels, Electricity, Gas & Water Supply, Finance, Insurance, Real Estate & Business Services, Public & Social and Wholesale & Retail Trade – report their least optimistic forecasts since the survey began in the fourth quarter of 2006.

Quarter-over-quarter, employers in seven of the 10 industry sectors report weaker hiring prospects. The most notable decline of 7 percentage points is reported by Restaurants & Hotels sector employers, while in the Finance, Insurance, Real Estate & Business Services sector, the Outlook weakens by 5 percentage points.

Meanwhile, the strongest hiring prospects are reported in the Manufacturing sector, where the Outlook improves by 9 percentage points, and the Mining & Quarrying sector, with an 8- point increase.

Year-over-year, employers in eight of the 10 industry sectors expect the Outlook to decline, with considerable declines of 18 and 17 percentage points reported in the Outlooks for the Restaurants & Hotels sector and the Wholesale & Retail Trade sector, respectively.

Internationally, employers in 35 of the 39 countries and territories Manpower surveyed expect to add to their workforces to varying degrees over the next three months. Employers in India, Brazil, Taiwan and Turkey report the strongest third-quarter hiring plans, while those in Spain, Greece, Italy and Ireland report the weakest—and only negative—hiring forecasts. The hiring pace is expected to improve from three months ago in 20 of 39 countries and territories. The hiring pace is expected to improve in 24 of the 36 countries and territories where year-over-year comparisons are possible.

Globally, job prospects continue to be strongest in the Asia Pacific region. However, some of the hiring from the previous quarter was evidently absorbed with Net Employment Outlooks decreasing slightly from three months ago in five of eight countries—Australia, India, Japan, Singapore and Taiwan. Year-over-year Outlooks rose in just five of eight countries and territories.

In the EMEA region, employers report positive hiring intentions in 17 of the 21 countries surveyed. Individual Outlooks improve in 13 of 21 countries from three months ago and year-over-year. Similar to the second quarter, regional hiring plans are strongest in the Eastern European countries of Turkey and Romania and weakest in Spain and Greece.

“The year-over-year improvements across all major geographies are good news; additionally, the emerging markets continue their optimism. This is not to say that companies are not remaining somewhat cautious – they are – however they are steadily coming off the ‘no change’ fence,” said Jeffrey A. Joerres, Chairman and CEO of ManpowerGroup. “Each market is not without its own set of supply and demand challenges.

For example, many of our clients in developed markets are beginning to feel the talent crunch as aging workers retire; clients in emerging markets may have a surplus of candidates who often don’t possess the level of education, skills and experience required for the job. The growing skills shortage will affect virtually every industry and every economy in the Human Age; and businesses, educators and governments must collaborate to find innovative ways to align learning and skills development with business needs to ensure future economic growth.”

* Seasonal adjustments applied to the data make it possible to review the data without the employment fluctuations that “normally” occur at the same time each year, thus providing a clearer picture of labor market trends over time.