In SA, bank employment declines for juniors, increases for executives

South African banks have been increasing recruitment of executives and people in senior positions, but the number of people employed in junior roles has been declining. This is what emerges from the newly released Adcorp Employment Index, which shows that "South Africa's economic recovery remains patchy and uneven," according to Ceo Richard Pike.

In December 2010 the financial services sector recorded "moderate job losses", with a 4.46% fall in overall employment - against a 0.21% fall in the number of permanent workers in all other sectors. But low-skilled and junior employees declined by 5.75%, while there was an increase of 3.6% in highly skilled employees. At the top end of the scale, says Pike, "there is demand and there will continue to be because of the skills shortage while at the bottom there is a massive glut of people unable to find a job."

Unemployment now stands at 25.3% in South Africa and President Jacob Zuma last week admitted that progress has been minimal and said job creation is a priority for 2011. The New Growth Path policy endorsed by Zuma sees the state taking on a different role, moving from simply providing an enabling environment for job creation to being a major employer.

But one of the main reasons for the rise in unemployment, according to Pike, is the high wage levels pushed by the militant trade unions. "Organised labour has a monopoly over the wage setting process," says the Adcorp Ceo. "Increase in total remuneration during 2010 reached 16.8%, which far exceeded both the increase in the cost of living of 3.5% and the growth of labour productivity, of -4%, so real remuneration is now increasing at an unprecedented rate.

There is no engagement with business as to how to solve the problem of unemployment. Deregulation is the key but unfortunately the trend is for more regulation and less flexibility. So the risks to South Africa's employment outlook remain acute."

Adcorp is South Africa's largest employment services company and its Employment Index is regarded as an accurate barometer of trends in the sector.

The survey's findings are correct, says the director of another recruitment consultancy who does not want to be named because Adcorp is a competitor: "The index is well established and certainly in my experience I have found that the trend in financial services is to cut back on junior employees while continuing to hire executives or people with years of experience, who are thin on the ground and always at a premium. I expect this trend to continue this year."