a report on the multiple jobs trend and factors affecting ... · a report on the multiple jobs...

Copyright © 2014, Quest Staffing Solutions (Pty) Ltd

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A REPORT ON THE MULTIPLE JOBS TREND AND FACTORS AFFECTING EMPLOYMENT

IN SOUTH AFRICA

A white paper on employment matters



CONTENTS

1. Abstract/Executive Summary 1

2. Introduction 1 • International landscape 1 • What about South Africa? 1

3. What is holding South Africa back? 2 • The hurdle of unemployment 2 • Technology: a window of opportunity 2 • What do employers think? 2 • Need for saving vs. credit dependence 3 • South Africans need skills and workplace experience 3 • Balancing multiple jobs with personal life 4 • The need to be where jobs are available 4

4. Government initiatives impacting job creation and skills development 5 •The National Development Plan (NDP) 5 • The Sector Education and Training Authority (SETA) 5 • The Employment Tax Incentive Act 5 • New Immigration Laws 5

5. Is enough being done for job creation? 6 • Progress of government initiatives so far 6 • Skills retention post-development stage 6 • Private sector responsibility 6

6. Economic and Business Benefits 7 • Economic growth 7 • Youth Wage Subsidy benefits for business 7

7. Summary 7

8. Call to Action 8 9. About Quest 8

10. Authors and Contacts 8

Abstract/Executive Summary This white paper set out to identify whether the global trend of working multiple jobs is currently visible or possible in the South African context but along with finding that the trend is not currently prevalent, Quest found that unemployment remains a major hurdle for South Africans. Quest Staffing Solutions - Africa’s leading staffing solutions company within the white-collar recruitment industry - recently conducted research to identify whether South Africans are following the multiple jobs trend and found that most of the research participants (80%) would consider taking on an additional job. Interestingly, few (4%) of the South African participants are currently working more than one job and the majority (60%) are in fact unemployed.

These - unemployed - South Africans should ideally be productive members of the country’s workforce. South Africa’s high unemployment rate and strained job market has not only held these individuals back in terms of their personal finances, skills development and standard of living but has ultimately contributed to the slow growth of the South African economy.

Quest’s research found that participants would choose to work multiple jobs in order to gain more/different skills and experience (33.7%), save extra money for the future (21.4%) and meet regular household expenses (19.1%).

While unemployment remains the surface issue, the major factors contributing to the high level of unemployment in South Africa include: the strained job market and slow economic growth; a lack of high-demand skills; and inequality relating to access to technology and education.

Introduction There is a notable global trend, especially in developed countries, of people taking on multiple jobs. Quest embarked on this research to identify whether South Africans are working multiple jobs and identify possible future trends in this regard.

As a result of Quest’s survey, conducted online, 80% of respondents – most of whom were youth between the ages of 19 and 30 – admitted that they would consider an additional job while only about 4% currently work more than one job and 60% are unemployed.

International landscapeDeveloped countries like Australia, Canada and the US have reported the prevalence of citizens working multiple jobs for various reasons. These reasons identified for people in the US working multiple jobs range from simply not being able to find a stable full-time job to, on the other end of the spectrum, identifying an abundance of available jobs in certain regions - in which case the number of available jobs in a town or city exceed the population of the town or city. The US Bureau of Labour Statistics (BLS) notes that in 2012, about 5% of the US working population held more than one job at the same time. According to the Australian Bureau of Statistics, in September 2009, more than half a million Australians were also working more than one job. Interestingly, Statistics Canada noted that in 2009 about 56% of multiple job holders were women and that this percentage would continue to increase while men's share would remain relatively constant.

What about South Africa?The strained South African job-market, shortage of skills and exceedingly high level of unemployment negatively impacts the viability of this trend in the South African context. Quest’s survey revealed that few South Africans work more than one job over the same period of time although many would choose to do so if they had the opportunity. This opportunity can be fuelled by skills development and training, job creation and sufficient time to successfully manage more than one job. For South Africans, choosing to increase their workload would be an ends to meet their need to gain additional skills and experience, save for the future and enable them to afford day-to-day living costs.



What is holding South Africa back?The hurdle of unemployment Unemployment presents the largest stumbling block, not only in terms of enabling South Africa to pick up on the trend of working multiple jobs, but also in terms alleviating poverty, growing the country’s economy and placing South Africa in a more globally competitive position.

Statistics South Africa’s (Stats SA) quarterly labour force survey (QLFS) revealed that the South African unemployment rate increased marginally to 25.5% in the second quarter of 2014.

The QLFS is a household-based sample survey which collects data on the labour market activities of individuals aged 15 to 64 years who live in South Africa.

The survey noted that jobs were lost in the agriculture and formal sector, jointly shedding 63 000 jobs. The number of discouraged work seekers also rose by 64 000 - unsurprising given weak economic growth prospects for 2014 which impacts the confidence levels among job-seekers.

Unemployment is especially high for the South African youth who have little, if any, experience in the workplace. These age groups also made up the majority of the Quest survey respondents – 15.8% were between the age of 19 and 21, 39.9% between 22 and 25, and 28.6% between 25 and 30. The balance of Quest’s survey respondents (15.7%) were over 30 years of age.

Technology: a window of opportunityTechnology such as the internet makes it easier for people to work multiple jobs, specifically online work which does not require employees to come into the office each day or even live in the same country as their employers. Examples of this kind of work includes market research, writing, editing, typing, web-design, data entry and processing work.

Although technology unlocks the opportunity for South Africans to work multiple jobs, the high cost of this technology - especially in terms of reliable and secure broadband - marginalises the majority. The 2013 State of Broadband Report released by the United Nations (UN) Broadband Commission found that only 25.5% of South African households have internet access.

With the majority of the South African population, and potential workforce, side-lined in terms of internet access, the online work opportunities available to them have become futile.

What do employers think?The view of employers on their employees working multiple jobs also needs to be taken into account as many professionals are bound by a restraint of trade clause in their letter of employment. The employers of these professionals, employed on a permanent and full-time basis, require their employees focus not to be split when working and not to spend their “down-time” on additional work which may lead the employee to burn out, ultimately effecting their productivity.

Employers may not only fear that working multiple jobs could lead their employees to exhaustion - unable to perform to their full capacity - but there is also the very real threat of an employee prioritising one company over the other. Employers may see this as a threat because employees would choose to allow their work for the ‘second choice’ company to fall to the wayside in favour of performing better for their ‘first choice’ company.





In this regard, it is important to differentiate between casual and permanent/professional employees. A casual employee works without a fixed contract of employment for no more than 24 hours a week while a permanent/professional employee works on a fixed-term contract for approximately 40 hours each week. Casual employees would therefore have more time and freedom to explore the opportunity of working more than one job. However, casual work would not provide the employee with stability in terms of receiving a reliable and consistent flow of income because when a particular contract comes to an end without being renewed, the income would also come to an end.

South African employers, who are self-starting entrepreneurs, may also find it challenging to allow their employees to work multiple jobs, especially within the same field. The threat of these employees leaking confidential information and/or their company’s intellectual property (IP) may be a risk employers are unable to overlook.

Need for saving vs. credit dependenceThe overall increase in the cost of living for the average South African through increases in petrol, electricity and food has ultimately exceeded what they can afford with their single (for those who have a job) or unstable (for those working part-time or on contract) income. 19.1% of Quest’s survey respondents indicated that they would consider taking an additional job to meet regular household expenses.

Not being able to meet one’s expenses on a monthly basis places South Africans at high credit risk.

According to the 2013 Old Mutual Retirement Monitor, low income earners have been hard hit by the weaker economy and higher prices and, while despite having more money, higher income earners are not as financially secure as would be assumed.

In line with South Africa’s reputation of lacking a culture of saving, 42% of Old Mutual’s survey respondents noted that they have no formal retirement provision in place. 85% of these respondents also highlighted that not having enough money to retire was their greatest concern about retirement – primarily due to a fear of inflation.

Around 66% of the survey’s respondents also noted that they expect to have to support parents or elderly family members financially because they would not be able to retire independently.

21.4% of Quests’ survey respondents noted that taking on an additional job would enable them to save extra money for the future.

South Africans need skills and workplace experienceIn order to save for retirement, a percentage of one’s income can be saved and/or invested each month. However, for this to be possible South Africans need a steady and constant income preferably from a permanent and stable job.

According to the Adcorp Employment Index (January 2014), The South African economy witnessed the shedding of about 36 290 jobs in January 2014, with permanent employment most impacted. During this time, highly skilled professions stood out as the only sector in which new jobs were created but South Africa lacks the skills to fill these vacancies.

33.7% of Quest’s survey respondents highlighted that their reason for considering an additional job would be to gain more/different skills and experience. South Africans require such skills and training in order to unlock and broaden their opportunities in the workplace.

According to the South African Sector Education and Training Authority (SETA), there are thousands of young people who finish their education and are looking for jobs each year and more than 50% of Grade 12 learners leave school without basic skills to seek work.

The highest level of education achieved by the majority of Quest’s survey respondents is Matric (57.5%) and few reported studying further for a Diploma (15.8%), Undergraduate Degree (5.6%), Honours Degree (0.67%), Masters Degree (0.17%) or Doctorate (0%). However, a tertiary qualification does not necessarily secure employment when such qualifications do not match up with the skills required by employers. According to Adcorp, South Africa possesses a surplus - approximately 344 000 - unemployed graduates. However, for the high demand, high-level professions such as in engineering, medicine and finance, a qualification in arts, social science or humanities would not align itself with the job requirements.

Practical work experience is also crucial for attaining the appropriate skills and for future employment prospects. The young generation who are ready to enter the workforce require any opportunity for practical skills transfer and experience through both public and private sector training, learnerships and internships.

Balancing multiple jobs with personal lifeAnother stumbling block South Africans face in terms of possibly working multiple jobs in future would be finding a balance between professional/work and personal/family lives. This may present a problem in the unique South African context due to the percentage of single-headed households. In 2013, the South African Institute of Race Relations (SAIRR) revealed that only 33% of children in South Africa live with both their parents while the remainder live with single parents, on their own, with relatives or in foster care. Just over 39% of children live with their mothers and about 4% live only with their fathers. A single parent working multiple jobs may negatively impact the country’s family structures and further increase the prevalence of household responsibilities being handed over to children, ultimately impacting their focus on their own education.

This concern was also highlighted in Australia where questions have been raised as to whether multiple job holders need to work multiple jobs to make ends meet and whether the long hours sometimes involved had an adverse impact on their family and social lives. On the other hand, it was not overlooked that having more than one job may offer workers more variety and the chance to gain additional skills.

The need to be where jobs are availableAnother consideration, taking into account that every country has business and financial hubs where there are more opportunities for employment across various industries, is urbanisation. For South Africans to take advantage of the job opportunities in hubs like Johannesburg and Pretoria, they need to reside in or relocate to these areas.

In 2013, The World Bank found that the proportion of South Africans living in urban areas has increased from just over half of the population, in 1990, to approximately two thirds.

The SAIRR – who released the World Bank’s survey data - identified the major causes of urbanisation as the post-apartheid freer movement of people and higher economic growth in urban areas, attracting people searching for employment.



Government initiatives impacting job creation and skills developmentThe National Development Plan (NDP)Concern over South Africa’s high youth unemployment rate has taken centre stage in the planning and implementation of government initiatives, one of which being the NDP.Of the nine central challenges identified in the NDP - through the National Planning Committee’s Diagnostic Report - the two challenges: “Too few people work” and “The standard of education for most black learners is of poor quality” were highlighted by the committee as the two elements which are both critical and interrelated. The NDP notes that failure to raise employment and improve the quality of education would signal failure - generally. Both challenges require community involvement, better public service delivery and a higher degree of social cohesion that promotes cooperation between all sectors to support economic growth and job creation.

According to the NDP, failure to address these challenges is likely to result in economic decline, falling living standards, rising competition for resources and social tension.

The NDP states that, by 2030, the economy should be close to full employment and that the Government’s New Growth Path aims to create five million jobs by 2020. These jobs will be created by providing a supporting environment for growth and development, while promoting a more labour-absorptive economy.

The Sector Education and Training Authority (SETA)SETA was established in response to South Africa’s need for skills development. The authority comprises 21 organisations concerned with education and training that are mandated to assist with the implementation of the National Skills Development Strategy and increase the skills of people within each sector. Each organisation covers a particular industry and occupation and focus specifically on learnerships, internships, learning programmes and unit based skills programmes.

Examples of sectors which have organisations licensed under SETA are banking, information technology (IT), manufacturing and agriculture.

The Employment Tax Incentive ActIn an extended effort to increase youth employment and allow graduates the opportunity to gain practical skill and experience in the workplace, The Employment Tax Incentive Act, commonly referred to as the youth wage subsidy, came into effect in January 2014.

The South African government noted that it hoped the law would promote employment for young people and create jobs in special economic zones once legislation providing for them has been promulgated. New Immigration LawsSouth Africa’s tightened immigration laws came into effect in May 2014. The immigration regulations introduce a new visa regime which outlines a clear distinction between short-stay visas and long-stay permanent residence permits. It also stipulates that visa applications need to be made by applicants in person and those wanting to change the status of their visa can no longer do so in South Africa but have to do so from their home countries. When applying for a General Work Visa, which will be valid for a maximum of five years, the new regulations set out that the applicant requires a certificate from the Department of Labour confirming a number of factors including that the applicant has skills and experience which the employer is unable to find in South Africa.

The new regulations are also be expected to ensure that permanently employed South Africans must make up 60% of the total staff complement in a business owned by foreign nationals.



The implementation of these regulations will ultimately lower the number of immigrants working in South Africa, allowing more opportunity for local employment. However, the need for potential South African employees to meet the skill level required re-emphasises the need for increased skills development and training in high-demand industries.

Is enough being done for job creation?Progress of government initiatives so farAccording to the 2014 Budget Speech, delivered by then Finance Minister Pravin Gordhan, 1.3 million jobs have been created since 2009 - during the economic recession. This is out of the NDP target of creating five million jobs by 2020. However, these additional jobs have had little impact on lowering the unemployment rate which continues to rise and therefore highlights the extreme volume of South Africans who require employment.

As an initiative for both the public and private sector to open their doors to a youthful workforce, the Employment Tax Incentive Act (youth wage subsidy) gives employers a tax incentive to employ young workers for a maximum of two years under certain conditions.

According to a SME Growth Index multi-year (2011/2012) research project by business environment specialists SBP, South Africa's small and medium enterprises are broadly supportive of the introduction of the Act. The research aimed to investigate the views and experiences of approximately 500 small and medium enterprise (SME) operators in South Africa. 55% of the surveyed enterprises noted that they were in favour of the youth wage subsidy. Internships, learnerships and exposure to the workplace environment - through the Act as well as through SETA organisations – create and environment in which skills transfer can take place, allowing young employees to develop their skills practically.

Skills retention post-development stageFollowing the transfer and development of skills - resulting in a highly-skilled work force - there is a need to retain these skills and avoid a continuation of a “brain drain” to developed countries. This focus is especially important for professionals in high-demand industries such as medicine, education, engineering and IT.

The retention of scarce skills requires attention be paid to a number of factors including: the quality and effectiveness of management; job satisfaction; recognition; skills development and training; enabling staff to 'own' their jobs; flexibility; challenges; exposure to new technologies; and rewards for achieving milestones. Employers need to configure individual programmes by determining the relevance of each of these factors for every practitioner.

A retention strategy checklist should include the identification of turnover hot spots, high risk groups, cost impact, trends and the perceptions of employees. Management would also gain considerable insight into attrition by conducting well-structured exit interviews that identify weak spots.

Private sector responsibilityAlthough government plays a major role in supporting employment creation and providing short-term work opportunities through public and community works projects, the private sector remains the biggest driver of job creation.

The private sector also plays a pivotal part in attracting further investment in South Africa from overseas business which positively impacts both economic growth and job creation.



Economic and Business Benefits Economic growthIt is widely agreed that an increase in employment through job creation is ultimately linked to economic growth.

The South African economy is forecast to grow by 2.7% in 2014 and a further 3.5% by 2016. To make more rapid progress in creating jobs and reducing poverty, the South African economy must grow by 5% a year or more.

According to Treasury’s 2014 budget, South Africa needs faster and more inclusive economic growth to reduce unemployment, poverty and inequality. But faster growth over the medium term requires changes in the structure of the economy to increase the level of competition and innovation, raise the level of savings, reduce the cost of transport and communication, improve regional trade and increase integration into the global supply chains.

To boost economic growth, transformation and job creation, the 2014 budget makes R35 billion available for industrial development, which includes R6.5 billion for small, medium and micro enterprises (SMMEs), R5.4 billion for provincial investment agencies and R2.3 billion for various research and development support initiatives. This does not include tax and other incentives such as the youth wage subsidy.

Youth Wage Subsidy benefits for businessThe youth wage subsidy benefits businesses who recruit young workers between the ages of 18 and 29 by subsidising their salaries. Businesses then save money and increase their workforce while youth are given the opportunity to grow their careers.

A pilot study of the youth wage subsidy by economists at the University of the Witwatersrand found that a subsidy improves employment chances by at least 25%. According to Treasury’s 2014 budget, the subsidy should support a total of 240 000 jobs over the next three years and recorded 56 000 beneficiaries in its first month of inception.

SummaryThe growing global trend of working multiple jobs enables workers to broaden their skill-set, gain experience and earn additional income. This trend has become prevalent in developed regions across the globe, however, in South Africa, the trend is currently not visible or feasible due to the strained South African job market, high unemployment rate and need for skills development and training. Quest’s recent online survey found that although 80% of respondents would consider working multiple jobs, only 4% of respondents currently work more than one job and the majority, 60%, are unemployed.

The South African government have set a number of initiatives in place to address these issues which both hold South Africa back and stunt the economic growth of the country. Such initiatives include the NDP, SETA and the Employment Tax Incentive Act or youth wage subsidy.

The successful implementation of these initiatives, resulting in the creation of jobs and opportunities for skills transfer, development and training for young South Africans, would increase the overall living standard of the South African workforce. Job creation through both the public and private sector would address the identified need for South Africans to gain more/different skills and experience, save for the future and meet current household expenses. An increase in job opportunities in South Africa would not only stabilise the exceedingly high unemployment rate but would also unlock the opportunity for South Africans to pursue multiple jobs if they are interested in doing so.



Call to ActionIn order for the trend of working multiple jobs to be possible in the South African context, there is a need for the acceleration of current government initiatives to fast track job creation and skills development as the country’s exceedingly high unemployment rate hinders South Africa’s growth prospects.

The NDP, SETA, Employment Tax Incentive Act and even the tightening of South Africa’s immigration laws are all crucial elements to better the odds of South Africa winning its battle against unemployment and poverty and not only meeting but exceeding economic growth expectations.

The government and public sector are essential in driving these initiatives but a large portion of responsibility falls on the private sector which has the capability to lift many unemployed South Africans out of their current circumstances. Private sector involvement ranges from skills development (i.e. internships, bursaries, learnerships and on-going ‘refresher’ training) to on boarding and upskilling local talent rather than bringing in or outsourcing from elsewhere in the world.

About QuestQuest Staffing Solutions (Pty) Ltd is South Africa’s leading staffing solutions company within the white-collar recruitment and staffing industry. Our Full Circle Staffing Solutions (FCS² ™) model has been defined and refined for more than 40 years and is today, the most comprehensive in the industry. Our services offering includes Field Marketing, Managed Service Provider (MSP), Outsourced Staffing Solutions (OSS), Permanent Placement Solutions (PPS), Recruitment Process Outsourcing (RPO) and Specialised Staffing Projects services.

Established in 1974, we have provided clients with our 360° (holistic and strategic) approach to staffing solutions. We at Quest have proved our capabilities in the South African staffing industry through the successful attraction, selection, deployment and management of thousands of candidates in the market.

A Level 2 BBBEE contributor company with 64.87% black ownership and 30.42% black female ownership. Quest has a vision to be the undisputed African leader in strategic staffing solutions.

Call us for all your staffing solutions: www.quest.co.za

AuthorsKay Vittee - Chief Executive Officer

KC Makhubele – Managing Executive: Marketing and Strategic Relationships

Contact Tel: +27 11 628 0300

Email: [email protected] address: P.O. Box 555, Saxonwold, 2196



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