South Africa: Population, Culture, Labor Market, and Industrial Relations, Study notes of Market economy

Download South Africa: Population, Culture, Labor Market, and Industrial Relations and more Study notes Market economy in PDF only on Docsity! 1 Off -Shoring: South Africa Presented By: Addie Hanks Jennifer Kinsman Collin Overby Julie Schramski South Africa Basics Population 42,718,530 Age Structure • 15 – 65 years 65% Life Expectancy • Males – 44.4 years • Females – 44 years South Africa’s Culture 2 Apartheid The practice of apartheid existed in South Africa for more than forty years and ended - when Nelson Mandela was elected president in 1994. During those forty years: - wealth by the white minority was systematically increased, - resulting in the extreme repression of the majority native African population. Apartheid Cont. As the world became more aware of the practices of the minority rulers, • a chorus of condemnation resulted and eventually force changes. • Chief among these measures were economic sanctions. Women in Society Long-standing gender role belief: women are less important and less deserving of power, than men. Women expected to be responsible for: • day-to-day survival of their families • carrying out financial and legal transactions 5 Labor Quality 521,000 skilled graduates each year. South African literacy rate is 84%(24% higher than India). Unemployment rate is 28% (March 2004) High school graduate unemployment is 30% and university grad unemployment is 13%. Labor Force Issues High Emigration Rates due to low wages. Skilled workers are going elsewhere. • Highest shortage is at managerial and supervisor level. Adult (Aged 15-49) HIV prevalence rate 21.5% SA has the fastest growing rate of HIV in the World • 4.2 million adults and children are living with HIV/AIDS(1999). • “The number of employees lost to AIDS could rise by 40-50% of the workforce in some companies in the next 10 years.” Labor Force: Call Center Industry Industry is classified under business services (1 million employees) • Estimated 80,000 employees working at call centers. In 2001 there were 410 call centers. 18 call centers provide services abroad. (Sykes, Merchants, Lufthansa , CSC, Qualiflyer, RCI) 6 Labor Force: Call Center Industry CC attrition rates between 5% to 7% (India is 40%) Average agent tenure is 40 months. It is projected the industry could grow about 10,000 seats per year and still not exhaust the skilled labor force. Formal/Informal Constraints on Labor Formal Constraints (Law) Child Labor Law: Section 43 of the Basic Conditions of Employment Act (BCEA), prohibits employment of children under the age of 15 7 Formal Constraints continued… Minister of Labour Mdladlana said, “The use of children to perform the work of adults is extremely exploitative. It is not only a form of abuse of the child, but it also limits job opportunities for adults in the area.” Formal Constraints(Law) Employers with more than 50 people must comply with the Employment Equity Act: • Intended to redress employment disadvantages (Blacks, women and disabled) • Directly impacts recruitment practices and workforce composition. Formal Constraints(Law) Ordinary hours of work(EEA) A worker must NOT work more than: 45 hours in any week 9 hours a day if a worker works 5 days or less a week, or 8 hours a day if a worker works more than 5 days a week. 10 Industrial Relations Climate The largest and most advanced of African countries Highly responsible for ending workplace apartheid practices Played critical role in establishing the Labour Relations Act (LRA) of 1995 LRA similar in many ways to the United State’s National Labor Relations Act. Trade Union Movement Labour Relations Act of 1995 Purpose of the Act- • Advance economic development • Achieve social justice • Promote labour peace • Encourage workplace democracy Major accomplishments of LRA- • Decreased occurrence of wildcat strikes that were common in the 1970s-80s • Provides unionized workers with redress through mediation, conciliation, and arbitration 11 Regulated by National Economic Development and Labour Council (NEDLAC) NEDLAC comprised of representatives from: • Trade union federations • Employers • Government • Civic organizations Discussion is between all representatives to decrease unilateral decision making Industrial Relations Policy Regulation Outsourcing Call Centers to South Africa Disadvantages of South Africa AIDS epidemic Long-standing beliefs about women Illicit underground economy Emigration of workers 12 South Africa vs. India South Africa Low attrition rate More neutral accent Strong insurance & banking industries Literacy rate 30% higher than India India High volume, low-cost Massive infrastructure already in place 2.5 million graduates each year Economies of scale allows for future growth Call centers a national economic priority Government incentives to encourage call center business Sector Administration Training Authority (SETA) provides training subsidies in Gauteng region Advantages of South Africa Deregulation of telecom industry in 2005 significant price reductions in voice transmission Customer service staff attrition rate only 10% • Much lower than the U.S. average Modern, progressive legal system built on Western traditions English is the national language • Also has large groups of foreign language speakers Advantages of South Africa Cont.