CAPITAL OUTSOURCING GROUP
FEATURE
POWER TO THE
people? Labour brokers are a contentious issue, but, says Tim Downes, COO of Capital Outsourcing Group, they are a valuable alternative to permanent employment, which is conducive to economic growth. By Ian Armitage
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Capital Outsourcing Group FEATURE
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abour brokers are contentious, an issue people really care about. It is an issue that drew thousands out of work to marches in every province as part of Cosatu’s recent strike. The tone was highly emotive: labour brokers are “bloodsuckers” whose activities amount to “slavery” and who treat workers as “commodities”. “We will never understand the regulation of labour brokers, we want a total ban,” said Cosatu president S’dumo Dlamini at the union’s protest in Durban. He said Cosatu had discussed the issue of labour brokers with the government. If its demand they be banned was not met, another march would be held in August. “We don’t want labour brokers,” marcher Joshua Ngcobo said. “We want the government to get rid of them. How can you work without benefits? That’s what happens with labour brokers.” SACP secretary-general Blade Nzimande told workers that labour brokers had no place in the country, did nothing to impart skills to workers and undermined government efforts to educate workers Nzimande’s charge is that labour brokers are the main drivers of “casualisation of labour” and that their practices are “the absolute contradiction to the principle of decent work”.
They have “driven down workers’ wages and conditions of employment”. They “do not create any jobs but sponge off the labour of others and replace secure jobs with temporary and casual forms of employment”. The ANC Government however have reiterated that they will not budge on the party’s decision to regulate labour brokers and not scrap them entirely, irrespective of the criticism from its alliance partner. The government is considering amending the Labour Relations Act to ensure that after six months, labour broker employees will automatically be deemed permanent employees of the broker with the full range of organisational rights and benefits kicking in; and enforce equal pay for equal work subject to a number of overriding conditions. “The government has made firm proposals to amend the law on labour brokers,” says Tim Downes, COO of Capital Outsourcing Group, specialists in outsourced staffing, recruitment and HR solutions. “Government promised in its 2009 election manifesto to introduce laws to regulate contract work, subcontracting and outsourcing, and address the problem of the abusive practices of certain brokers. “We’ll see new regulation on those and it will make a difference.” Founded in 1985, Capital Outsourcing Group specialises in the supply of outsourced staffing, recruitment and HR solutions. It employs more than 22,000 temporary staff at any one moment and has an annual turnover of R1.4 billion. With its well-established branch network, Capital Outsourcing covers all major centres in South Africa, as well as most southern African countries. It boasts longstanding relationships with an impressive list of bluechip clients across many industry sectors. The company prides itself on a non-corporate, handson approach to business characterised by a decentralised structure, personalised service and rapid decisionmaking. Its centralised administration division consistently achieves an industry-leading pay accuracy of 99.5 percent, and consistently develops its systems to maintain this competitive edge. In terms of our Broad Based Black Economic Empowerment score, Capital Outsourcing has an AAA rating from Empowerdex. www.southafricamag.com
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“The issue with regard to labour broking is hotly debated,” says Downes. “The debate is emotive. “Yes, there are labour brokers who break the law, the same way there are employers and unions who break the law. This is not sufficient reason to ban all brokers.” He says labour brokers offer an alternative to permanent employment. It provides a means for first time employees to gain experience and receive job training in specific skills. It is argued that this is conducive to economic growth but many argue that it is not conducive to fair treatment of the labour force mainly as a lack of understanding of what proper labour brokers do. “South Africa’s high unemployment rate is linked to the global economic depression where more and more companies can only take on fewer and fewer employees year on year. This is exacerbated where SA is compared to international productivity levels. There is a real need for brokers as companies require labour for a limited amount of time so that they can match production 4
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requirements to cyclical demand,” Downes says. “We are currently facing a few political hurdles in terms of how the unions perceive labour brokers and they are flexing muscles. That presents a difficulty. “However, people are still using labour brokers. In fact, we personally, are hitting records. There is definitely a need for us. “Labour broking is definitely an entry point into the labour market for many. What we are finding is that 30 percent of those we employ initially get taken permanent in the first year. “For the unions I think it is an emotive thing. However we pay union and bargaining council fees on all the sites where they are represented, in fact seven percent of our workforce is unionised. There is a role for us as we represent those people who are not employed but there is a need for part-time employment.” Does Cosatu really believe that by banning brokers they will force companies that can’t afford it to have more full time jobs? The obvious answer is no. If the
Capital Outsourcing Group FEATURE
local cost of labour becomes too onerous and not profitable they will mechanise or move production offshore. “How do we see the year ahead? What opportunities are there? Well, new regulation will come in and it will help reputable, respected players like us who abide by the rules. “Also, we see a lot of growth in Africa. We are seeing a significant inflow of capital into places like Mozambique, Angola and Ghana. We have been in Malawi for five years and there are opportunities in the DRC and Kenya. “It is a case of continuing what we are doing in Africa.” The continent is booming, Downes stresses, and there will “be a requirement” to get workers. “What makes us successful? A few things, really. One is that we have invested
in technology in terms of getting the processes right and becoming transparent and fast moving. For me it is the ability to provide a smooth flow of information and to provide the backbone of a larger company – knowing we are reliable – yet having that personal service. “We decided about eight years ago to go web-enabled. It means we can resolve queries quickly and operate out of remote locations. “Also our de-centralised structure enables a highly personalised service and rapid decision-making. We are firmly committed to supplying the best staff – staff that will improve productivity and service. And we always work to achieve a thorough understanding of any clients’ business.” To learn more about Capital Outsourcing Group visit www.cog.co.za. END
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