At the end of January, Knowledge Resources held a Seminar focusing on the HR and Labour Market Trends for 2013. I’ve summarized some of the most important points raised at the conference and I know you will find them beneficial…
South Africa’s Socio-Political Environment
Presentation by Justice Malala, Political Analyst
- Post Manguang – Cyril Ramaphosa’s election as deputy president of the ANC and the endorsement of the NDP is positive for the business sector. The same goes for the rejection of nationalisation of the mines as policy.
- Marikana and its consequences will lead to lower investment in the mining industry.
- Wild cat and unprotected strikes will continue. Worker militancy will increase which should put upward pressure on wage inflation.
- Cosatu and NUM will continue to be under pressure. In many areas they have lost contact with their constituents, even more so in the mining industry and specifically in the platinum belt.
- In the run-up to the 2014 elections, Malala warned that the “noise” levels and political rhetoric will escalate. View it as such and do not get carried away or be alarmed. After the election it will be business as usual.
- The challenges posed by the ineffective education system, high and rising unemployment, service delivery inefficiencies and bottlenecks will persist for time to come.
- On the positive side it is clear that the sub-Sahara region of Africa is growing fast and is attracting large investments and flows of foreign capital. Economic growth in many countries outstrips that of South Africa. Further, South Africa is also not the only gateway into Africa anymore. Kenia, Ghana and Nigeria are increasingly competing. South African firms however are well placed to capitalize on the opportunities Africa offers.
Economic Conditions for 2013
Sizwe Nxedlana, Chief Economist FNB
- The global economy is recovering. Interest rates to remain low. Inflationary expectations is also low.
- The South African economy will underperform in the short term due to self-inflicted wounds. Marikana, unprotected strikes in mining and agricultural sectors, government reaction to Anglo Platinum rationalization announcements and a host of service delivery constraints are just examples.
- Economic growth (GDP) is expected to be around 2.7%. This low growth is mainly due to slow household spending. That is again a function of slow growth in employment in Public and Private sectors, high food and energy prices, tightening credit criteria for unsecured lending products and low consumer confidence.
- Strong fixed investment in the public sector through infrastructure development and a slow rate of investment in the private sector (due to low confidence levels) will persist.
- As the world economy improves, gradual increase in exports will occur, that will impact positively on the negative balance of payments.
- Cost push pressures will place upward pressure on the inflation rate in the first quarter of 2013. Core inflation is however contained. Expected Rand appreciation in the 2nd half of the year will lead to lower inflation. The average CPI for 2013 is forecasted to be 5.7%.
- The economic outlook for 2014 is more positive with a real GDP forecasted to be 3.8%, CPI 5.3% and the Repo rate rising from 5% to 6% by the end of 2014.
Wage and Salary Trends
Presentation by Dr Mark Bussin, Chairman, 21st Century Pay Solutions Group
- Survey results from 21 Century Pay Solutions indicated that the most important criteria for awarding pay increases are individual and company performance for executive management. Local market pay levels and individual performance for management and CPI and local market pay levels for general staff.
- The top relevant trends are influenced by employee engagement, total reward approach, retention, linking pay to performance and new long-term incentives.
- The country’s socio-political context has a strong bearing on how pay is determined and communicating that is very important.
Regulatory and Compliance framework for the HR and Labour market during 2013 has the potential to change extensively
Presentation by Talita Laubscher, Director (Employment Law) – Bowman Gilfillan Inc. Dr Letitia van der Merwe, DCom Leadership in Performance and Change InavitIQ and Dolf van Rooyen, Industrial and Organisational Psychologist, InavitIQ.
The following pieces of legislation are being concluded:
- Labour Relations Act Amendment Bill
- Basic Conditions of Employment Act Amendment Bill
- Employment Equity Act Amendment Bill
- Employment Services Bill
There is still no indication yet of when these Bills will be signed into law as there is still much deliberation taking place around the legislation. The Department of Labour view this as a suite and the intention is to publish them all together.
The skills development landscape is facing vast changes this year.
The new SETAs Grant Regulations regarding monies received by a SETA and related matters come into effect on 1 April 2013 (Government Gazette no. 35940, published on 3 December 2012) with the following implications:
- Mandatory Grant reduced
- Grants will only be administered on the conditions that the employer meets the quality standards set by the Seta
- Denote a definite shift towards PIVOTAL programmes (SETAs to spend 80% of the discretionary grants on PIVOTAL)
- SETAs will have to set out in their Discretionary Grant Policy how PIVOTAL programmes can be delivered through public education and training institutions
- SETAs will have to ‘make it clear’ how they will allocate discretionary grants to prioritise programmes that address sector needs through public education and training programmes
The implications and specifically the increased barometers and compliance burden might lead to the following:
- Could substantially reduce the incentive of small and even medium-sized employers to submit Workplace Skills Plans.
- Significant reduction in training supported by levy paying institutions. Employers will have to increase their training budget.
- Additional administrative burden in terms of reporting and the need for electronic support systems.
HR Professional Landscape
Presentation by Marius Meyer, CEO of the South African Board for People Practices (SABPP)
Exciting new developments are on the horizon. The newly developed HR competency model will be rolled out. Visit www.sabpp.co.za for a copy of the model.
The need for HR professional standards similar to that of the accounting profession will be developed during the year. It is envisaged that these standards will be included in the King IV report of 2017.
These trends will have substantial implications for the HR fraternity as well as organisations in general and next week I will address this issue.
Don’t miss out on our 4th HR Directors Conference
Knowledge Resources has put together the 4th Annual HR Directors Conference 2013 exclusively designed for HR Directors. The Conference will focus on high-level, strategic issues that impact Strategic Human Capital Management now and specifically in the future.
Written by Wilhelm Crous, Managing Director of Knowledge Resources.