T R S Topline Research Solutions Your Pan African Research Consultants topliners.co.za

1. Labour Recruitment Chamber research on the nature of the TES Industry Presentation October 2010 By TRS ToplineResearchSolutions Your Pan African Research Consultants www.topliners.co.za

2. 1.0 Research Background Research Background

3. 2.1 Research Objectives • In the main, the research sought to find out: • TES company demographics; • TES companies scope of operations; • gender and race of assignees; • remuneration, benefits and EAPs given to assignees, and • sectors and number of assignees placed in a typical month.

4. 3.3 Sample Specifications

5. 4.0 ExecutiveSummary • Most of the companies interviewed belong to Association of Personnel Service Organizations (APSO). • The primary sources of candidates are online job portals/ internet, newspaper adverts, and word of mouth. • The primary reasons why temps are assigned are due to contingency, projects and seasonal increase in labour requirements • Assignees and internal staff have on average 2 and 3 dependents, respectively, (excluding the extended family). • The average length of service per temporary position is between 1- 6 months. • Almost half of TES companies, interviewed, employee about 60% first time work seekers in a year. TES is thus a key entry point into the labour market. • The number of complaints from assignees dealt with internally in a typical month is between 0 -3 complaints. • Terminations are instituted on assignees mostly due to contract period ending, temps securing permanent employment, client terminated contracts and resignations. However there are few terminations instituted in a typical month. • EAPs provided to temps are mainly counselling (trauma, HIV&AIDS as well as substance abuse related) in addition to orientation/training. • Other benefits provided to assignees include statutory requirements like UIF, Leave, workman’s compensation/Compensation for Occupational Injuries and Diseases(COID), Death and Disability as well as Medical Aid/ Cover.

6. 4.0 Executive Summary • One of the main categories the assignees fall into is Learnerships. The TES industry thus contributes to skills development • Most companies are SSETA levy paying and their monthly skills development levies range from R1000 – R1 000 000. • Most companies are BEE levels 1-4 • Union membership is generally low amongst most assignees at about 5%, except in the nursing sector where union membership is very high (most nurses are employed full time elsewhere and unions give them professional indemnity cover). • More than half of the companies have a collective bargaining council/ forum in place for the assignees. Common Bargaining Councils are MEIBC, NBCRFI, MIBCO and Furniture and Bedding while common Bargaining Forums are Construction, Chemical and Wholesale & Retail. • Those companies without any Bargaining Councils/Forums determine remuneration through market analysis and (as per) client agreement. • Most companies have placements in all TES sectors every month especially manufacturing, wholesale & retail, nursing and construction. • Majority of assignees are females, who are either unskilled and semi-skilled skilled. • Thousands of applications are received from both male and female candidates of all races. • An overwhelming majority of placements are black Africans and include people with disabilities. • From the companies interviewed (106) the average number of placements in a typical month is + 300 000. From the IDIs and Desk research the total number of assignees for a typical month for the whole TES industry is 902 833.

7. 4.0 Executive Summary • Most ministerial determinations are in the Nursing and Health sectors. • Average number of clients (aggregated) in a typical month across different sectors is + 4000. • Most assignees are given hourly rates and these are lowest in agriculture (unskilled at R8.00) and highest in mining (technical management at R430.00). • Majority of the company owners or principal members interviewed were white males. Black African owners account for 28%, which is higher than the average national statistics. Also 39% of the individually owned companies are female owned. • Most of the respondents were in senior management (CEO/Director or Manager) positions. • Majority of the companies interviewed have been in business for more than 10 years and employ between 6 -20 internal employees. • Average annual turnovers range from less than R5 million to over R1 billion but most of the companies are medium enterprises (R15m-R99m). • TES companies client sites are found all over South Africa, though concentrated in Gauteng, Kwa Zulu Natal and Western Cape provinces. • The research findings suggest that the TES industry plays a significant role in the SA labour market.

8. 6.1 Conclusions • Geographical/client sites locations • The TES companies are found in all the provinces of South Africa, with a bigger footprint in the major economic hubs, that is, Gauteng, Kwa Zulu Natal and Western Cape provinces. • Annual Turnover & Levy paying status • Average annual turnovers range from less than R5 million to over R1 billion and most of the companies are medium enterprises (R15m-R99m). • Majority of TES companies are SSETA levy paying and their monthly skills development levies range from R1000 – R1 million. • Remuneration and benefits paid to assignees • Hourly remunerations paid to assignees range from R8.00 for agriculture unskilled, to R430.00 for mining sector technical management. These are determined through bargaining councils/forums or market/industry rates. • Benefits paid to assignees include EAPs and other statutory requirements like leave (sick, study, compassionate/family and maternity), UIF, workman’s compensation (COID) and death & disability.

9. 6.2 Conclusions • Association membership, candidates sources, reasons for assigning temps and number of dependants. • Most of the companies belong to Association of Personnel Service Organizations (APSO). • Primary sources of candidates are from online job portals/ internet, newspaper adverts, and word of mouth. • Primary reasons why temps are assigned include contingency, projects and seasonal increase in labour requirements • The average number of dependants assignees and internal staff have are 2 and 3 respectively (excluding the extended family). • Length of contracts, first time work seekers, number of complaints and reasons for terminations. • The average length of service per temporary position is between 1- 6 months. • Almost half of TES companies, interviewed, employee about 60% first time work seekers in a year. TES is thus a key entry point into the labour market. • The number of complaints from assignees dealt with internally in a typical month is between • 0 -3 complaints. • Terminations are instituted on assignees are mostly due to contract period ended, found a permanent job, client terminated contract and resignation. However there are very few terminations instituted in a typical month.

10. 6.3 Conclusions • Number of assignees placed, in a month, and number of clients. • From the companies interviewed (106) the average number of placements in a typical month is + 300 000 placed with + 4 000 clients. From the IDIs and Desk research the total number of assignees for a typical month for the whole TES industry is 902 833. • Learnerships is one of the main categories the assignees fall into. The TES industry thus contributes to skills development • Union membership • Union membership is generally low among most assignees at about 5% except for sectors like nursing where membership is very high. • Collective bargaining council/forum • More than half of the companies have collective bargaining council/ forum in place for the assignees. Common BCs were MEIBC, NBCRFI, MIBCO and Furniture and Bedding while common BFs were Construction, Chemical and Wholesale &Retail. • Those companies without any BC/F determine remuneration through market analysis and (as per) client agreement. • Sectors in which assignees are placed • Most companies have placements in all TES sectors in a typical month especially manufacturing, wholesale & retail, nursing and construction.

11. 6.4 Conclusions • Assignees gender, race and skills categories • Majority of assignees are females, who are unskilled and semi-skilled. • An overwhelming majority of placements are black Africans and include people with disabilities. • Thousands of applications are received from both male and female candidates of all races. • Ministerial determinations • Most ministerial determinations were in Nursing and Health sectors. • Period in business and company/owner demographics • Majority of the company owners or principal members interviewed were white males. Black African owners account for 28%, which is higher than the average national statistics. Also 39% of the individually owned companies are female owned. • Most of the respondents were in senior management (CEO/Director or Manager) positions. • Majority of the companies have been in business for more than 10 years (with the industry being over a century in existence) and employ between 6 -20 employees. • Most companies are in BEE levels 1- 4

12. 7.1 Insights • TES have been utilized for over two decades now and this shows that it has been a critical arm in combating labour requirements for South Africa. • The majority of TES industry assignees are black Africans and Whites, and a quarter of the companies are Black African owned which shows that it is not entirely a White industry. • The TES companies are mainly in BEE levels 1 – 4, which shows that they are transforming and for non corporate entities, 39% are female owned (equity). • Assignees are placed in all the provinces though more placements are done in the major economic hubs of Gauteng, Kwa Zulu Natal and Western Cape provinces where demand is higher. • The TES industry is one of the biggest employers and it also contributes immensely to skills development (through levy and training). It also employees first time work seekers thus giving opportunities to those without any experience or re entrants. • The average length of service per temp position is 6 months but assignees stay with the TES companies for longer periods (moving from one contract to another).

13. 7.2 Insights • The few number of complaints received from temps shows that there is a conducive work environment (conditions). • The industry also employs permanent internal staff who are also breadwinners in addition to temps and if the industry is severely regulated this will cause a ripple effect. • The fact that about 77% of the companies get candidates through word of mouth shows that the industry has positive testimonies. • The TES industry complies with the BCEA since assignees are provided with EAPs and other mandatory statutory benefits. • Unlike common perception, the TES industry’ s terminations are client not employer driven.