Business organisation Business Leadership South Africa (BLSA) CEO Busi Mavuso says regulation can make it difficult and expensive to hire more people and the responsibility remains with government to ensure it creates a business environment in which hiring is easy.
“The unemployment figures at the end of March showed youth unemployment at a shocking 65.5%. We must do more to change this. Growth happens when businesses are confident about the future and expand capacity, rather than when they are leaned on to hire people,” she states in her weekly newsletter.
Government needs intelligence from the coal face of the jobs market. As BLSA engages with government on ways to confront the crisis, the organisation calls for insights from South African business and suggestions on what would ease hiring decisions.
The formal sector employs nearly ten-million people. However, as important as growth is as a starting point, there is something to be said about the labour intensity of growth.
“If we can find ways to reduce the transaction costs involved in hiring, we can ensure that, all else being equal, companies will hire more employees,” Mavuso says.
There are many efforts being made by government to confront the crisis. In February’s Budget, the employment tax incentive was increased by 50% to R1 500 a month, effectively a subsidy for entry level youth employees.
The presidential employment initiative has been allocated R18.4-billion over the next two years to create short-term jobs for young people and has various programmes in action to do so.
The Youth Employment Service has created 75 000 job opportunities by working with government and business to incentivise businesses to hire.
“These are all positive interventions that are helping thousands of young people, but clearly it is not enough,” she emphasises.
“Unemployment is a strategic focus for BLSA and I want to build on our set of positive interventions that we can look to deliver with government. Please reach out to engage with us on your thoughts on real changes that can be made,” Mavuso says.