SA employers' hiring plans for Q2 remain relatively unchanged

According to ManpowerGroup survey, employers report limited hiring intentions for the second quarter of 2020.

Results from the ManpowerGroup Employment Outlook Survey for Q2 of 2020 indicate that South Africa now stands in the bottom three globally when it comes to employers’ hiring projections. While 8 percent of employers forecast an increase in payrolls, 5 percent anticipate a decrease and 85 percent expect to make no changes. Once the data is adjusted to allow for seasonal variation, the overall outlook for South Africa stands at +2 percent, unchanged from the previous quarter and joint lowest outlook the country has seen in five years. 

Hiring plans remain relatively stable when compared with the previous quarter, but declined by 3 percentage points in comparison with the same period last year.

“As we enter the second quarter of 2020, the South African economy continues to be affected by subdued economic growth and a sluggish growth outlook. Local businesses remain concerned about policy uncertainty, high unemployment rates, and continued loadshedding,” says Lyndy van den Barselaar, managing director of ManpowerGroup SA.  “These factors are causing employers to proceed cautiously when it comes to their spending and hiring strategies. And while it is too early to predict the potential impact of the Coronavirus (Covid-19) on global hiring, the reality today is that unemployment remains low in many markets and organisations globally are still struggling to find people with the right skills.”

Furthermore, KwaZulu Natal has taken over from the Western Cape and Gauteng as the province with the highest rating of employment perceptions with employers there reporting a net employment outlook of +7 percent. Limited job gains are also forecast in the Western Cape and Gauteng, with outlooks of +4 percent and +3 percent, respectively. However, Free State employers report downbeat hiring prospects with an outlook of -4 percent, while the Eastern Cape Outlook stands at -3 percent.

Looking at the sectoral trend, employers in five of the seven industry sectors expect to increase payrolls during the forthcoming quarter. The strongest hiring pace is forecast in the Manufacturing sector, where the net employment outlook stands at +7 percent. Other productions and other services anticipate modest growth, with an outlook of +5 percent in both sectors, with restaurants & hotels’ outlook at +3 percent, and wholesale & retail trade at +2 percent. Meanwhile, employers in the construction sector and the finance & business services sector expect to trim payrolls, with outlooks of -10 percent and -3 percent, respectively.

Says Lyndy: “With considerable international investment into production plants in, among others, the automotive and electronics industries, manufacturing is expected to be a key growth driver in employment opportunities. A number of seasonal industries within other products and other services, such as fishing and tourism, will also affect short-term hiring during this quarter. Alternative power generation has also been pushed to the forefront in South Africa, as a result of continued load shedding. This, alongside several large infrastructure investments that have been made or are in the pipeline, is expected to stimulate considerable economic investment, in turn growing employment in these areas.”

The survey was conducted between 6 January and 28 January before the global escalation of Covid-19. While it is too early to predict the potential impact of Covid-19 on global hiring, the reality today is that unemployment remains low in many markets and organisations globally are still struggling to find people with the right skills.