Times are hard for HR

By liamarus, 16 October, 2013

According to renowned South African scenario planner, Clem Sunter, we are in a period of hard times. In other words, our economy is in a state of flat, low growth and he predicts that we will stay here for the next 10 – 15 years. And because unemployment figures are staggeringly high, we are going to need to take drastic measures to ensure that we include these unemployed citizens back into the job market.

The job market is not what it used to be

Big business is retrenching staff members left, right and centre, and employees’ best hopes of entering employment are small to medium enterprises. However, unemployment in the second quarter of 2013, according to StatsSA, was at 25.6%. Where are all these SMMEs ready and waiting to employ these people?

Government is aiming to create 5 million jobs by 2020 but this doesn’t look like it’s going to happen, says deputy minister of economic development, Hlengiwe Mkhize, in a report on Moneyweb. "We are not going to achieve them [job targets] if we don't systematically look at priority sectors," she said.

Another issue is that there are only so many enterprises in South Africa which can give jobs to a limited amount of people. So to meet government’s target for 2020, we are going to need to create new businesses which will employ those who don’t have jobs.

If only government would lend a hand…

At a briefing at Regenesys Business School in February 2013, Clem said that foreigners are being deterred from investing in South Africa because of political uncertainty and the huge amount of red tape that hopeful entrepreneurs have to cut through to realise their dreams of becoming business owners. With this lack of money in the economy, the capital available to start up new businesses is just not there.

In addition, the state is increasing their control of the economy, which leads to entrepreneurial growth being stifled. Clem also said that the current business climate is hostile to entrepreneurs as, for example, banks don’t really help people who want to start up small businesses and SMMEs aren’t paid within 30 days, which reduces their cash flow to a trickle.

How can we get out of this situation?

In a presentation at ThinkFest in Grahamstown, Clem suggested three possible scenarios that could occur:

  • All the ducks in a row: If our government can get all their metaphorical ‘ducks’ in a row, there is potential to get out of the mess that we’re in at the moment and get the foreign direct investment that we desperately need to grow our economy and solve our chronic unemployment crisis.
  • None of the ducks in a row: If government can’t get their act together, chances are very good that we won’t increase in our competitive standing.
  • The failed state: If SA becomes too unpredictable or violent, we risk descending into a state of anarchy much like what was seen in the likes of Zimbabwe and Sierra Leone.

Let’s hope that our country’s leaders can get their ducks in a row before it’s too late…

Clem Sunter will be speaking about The Future World of Work at this year’s IPM Convention from 3 – 6 November at Sun City. Follow this link to read more.

by Lia Marus

This article first appeared on HR Pulse.



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