Business keeps hiring despite confidence dip

South African businesses are still taking on employees despite poor confidence outlooks says Regus Business Confidence

October 5, 2011

South African businesses are still taking on staff, even though their views on economic growth are not as positive as they were a year ago, as more than half (68%) of South African companies report that they plan to increase headcount in the next two years. This is despite a downturn in the Regus Business Confidence Index, in which SA has slipped seventeen points from April 2011, to 115 this autumn.  As an indicator of the changing structure of employment, hiring intentions show a particular emphasis on freelancers, graduates and remote workers – as firms seek competitive advantage now and growth in the months to come.

  • In South Africa,  almost a third (28%) of companies have pushed back their expectations for recovery to the second half of 2012;
  • The proportion of SA companies reporting revenue growth (49%) has dropped one percentage point compared with six months ago, but those reporting profit growth (38%) has increased one percentage point over the period;
  • Companies trading internationally show a slightly higher business confidence index score (116) compared to those with mainly domestic markets (115)
  • Nevertheless, almost two thirds (68%) of companies plan to hire more employees over the next two years.  Signaling a clear move toward more flexible working practices, 57% of SA companies say they plan to hire more freelance staff and 36% will employ more remote workers in 2011/12.

Regus spokesperson, Therese Meyer, Commercial Director comments: “The report finds that, six months on from a rosy start to 2011, the global outlook has suffered a clear reverse. The proportion of companies reporting revenues and profit growth has close to stalled and expectations for the full momentum of recovery have slipped yet again and are now set for the second half of 2012. However, national business sentiment and activity does not seem to be unduly affected, with businesses actively investing in their most valuable asset: people power.

“In S.Africa, where unemployment reached 25.7% in the first quarter 2011,freelance and remote working are becoming an increasingly popular solution to increase headcount while remaining flexible and rapidly scalable. In addition to this, by taking advantage of solutions already available on the market it is possible for even very small operations to establish a low-risk presence in their target markets without making lengthy premises or equipment commitments and allowing them to expand or withdraw depending on volatile market conditions.”

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