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Survey indicates worst-ever hiring freeze

Tue, 24 Mar 2009 09:07

Although the employment outlook for South Africa has improved by one percent from early 2009, The Manpower Employment Outlook Survey of local hiring trends reveals that the slow pace of hiring is set to continue throughout this year.

Since the survey began in the fourth Quarter of 2006, it has recorded the weakest hiring intentions by employers, at a mere +14% for the second Quarter of 2009.

72 000 employers worldwide participated in the Survey, conducted by Manpower Inc. (NYSE.MAN). It showed that employers in 13 of 33 countries and territories still expect some positive hiring activity in the coming Quarter.

However, hiring expectations are considerable weaker in all areas surveyed compared with this time last year. In fact, employers in 23 countries and territories are reporting their slackest hiring plans since the surveys were established.

“Hiring forecasts from all of the G7 countries are notably weaker compared to 12 months ago, confirming that the global labour market will continue to contract. Only outlooks from employers in Canada and Germany have not slipped into negative territory,” said Jeffrey A. Joerres, Chairman and CEO of Manpower Inc.

“Meanwhile, hiring patterns in the US have declined to those seen during the recession of 1982, yet a significant number of employers surveyed anticipate no change in their employment intentions.

This tells us that in this difficult economic environment, employers are struggling to manage the tension between generating a profit and maintaining their workforce infrastructure.”

“Employers in Asia Pacific expect the downturn to take a toll on job prospects,” Joerres added. “Interestingly, employers in the important emerging market of India expect to edge up the pace of hiring from three months ago, suggesting some resilience in the quarter ahead.”

From a South African perspective, employers in the Construction industry sector expect flat hiring activity in the upcoming quarter, reporting a Net Employment Outlook of 0%. This reflects weaker hiring intentions both quarter-over-quarter and year-over-year, declining by 4 percentage points and 17 percentage points, respectively.

The Outlook in the Construction sector is now at its weakest since the survey began in at the close of 2006. Employers in the Mining & Quarrying industry sector reported a Net Employment Outlook of +11%

This is also the weakest since the survey began. Both quarter-over-quarter and year-over-year, the Outlook has declined by a considerable 13 and 22 percentage points, respectively.

However, employers in all but one industry sector (Construction) do expect an overall growth in headcount during this period, with varying degrees of optimism, particularly when compared with last quarter and Quarter 2, 2008.

In the Electricity, Gas & Water Supply industry sector employers expect healthy headcount growth in Quarter 2. The Net Employment Outlook is set to increase by 10 percentage points, quarter-over-quarter, to +27%.

Similarly, employers in the Transport, Storage & Communication industry sector expect strong headcount growth in Quarter 2, with a Net Employment Outlook of +24%, an 8 percentage point increase quarter-over-quarter.

“We have found that the many of our clients in South Africa are very cautious in hiring permanent staff at the moment. Also, many of our multinational clients specifically, have hiring freezes in place at the moment, or are reducing staff,” said Jan Coetzee, Managing Director of Manpower South Africa.

Year-over-year comparison reveals weaker hiring plans in all five regions. The sharpest decline is reported by employers in Kwazulu Natal, where the Outlook has decreased by 17 percentage points. Considerable declines of 12 and 11 percentage points are reported by employers in Free State and Eastern Cape, respectively.

In South Africa, the Manpower Employment Outlook Survey was conducted by interviewing a representative sample of 750 small, medium and large employers.

All survey participants were asked, “How do you anticipate total employment at your location to change in the three months to the end of June 2009, 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.