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LABOUR MARKET SCENARIOS 2030 REPORT: People and Work – How will the South African Labour Market Change over the next 14 years? Marius Meyer 28 July 2016 @SABPP1 @sabpp_1
LABOUR MARKET SCENARIOS 2030 REPORT:
People and Work – How will the South African Labour
Market Change over the next 14 years?
Marius Meyer
28 July 2016
@SABPP1 @sabpp_1
Agenda
• Introduction to scenario planning
• NDP goals
• Flags to watch
• Key uncertainties
• Launch of 4 Labour Market 2030 Scenarios
• Exercise
• Next steps
• Conclusion
Time for serious reflection
Policy goals of NDP
• Maintain fiscal discipline & macro-economic stability;
• Achieve sustained GDP growth of 5,4%;
• Reduce unemployment to 14% by 2020 an to 6% by 2030;
• Overall civil service to improve efficiency and
implementation;
• Promote market competitiveness;
• Reduce cost of living;
• Reduce impediments to investment;
• Create jobs via entrepreneurship and reduce regulation,
as well as a public works programme.
Socio-economic conditions
Context
• Strategic HR Standard requires
environmental scanning
• Labour market criticised in several local and
international reports
• Scenarios help us to consider alternatives
and to influence stakeholders
• Strategy teams can plan accordingly if we
can get a clear picture of the future
• Developed by 50 HR leaders, academics
and consultants
SABPP Labour market session
Facilitated by top scenario expert, Clem Sunter
Rules of the Game
1. World of work is changing – technology-driven
2. Employee characteristics – young people will be
the majority in organisations
3. Transformation – ownership of economy and
exercise of managerial power remains an
imperative
4. Protection of worker gains – legislation will
continue to be more protective
5. Structural unemployment and huge differences
between formal and informal employment will
continue
Future of work
Key uncertainties in labour
market
• Education and skills development systems - will
they adapt to meet employer needs?
• Balance of power – will de-unionisation in private
sector continue and how will shifting power
relationships play out?
• Economic growth – will the NDP be implemented
and economic growth achieve targeted levels?
• Tolerance and inequality – will the status quo of
inequality provoke major social unrest externally to
organisations and internally?
New word of work
(CIPD 2013)
Ostrich & Flamingo SA scenarios(Clem Sunter 1990)
SA scenarios (Illbury & Sunter 2000)
Political/Economic scenarios (Frans Cronje 2014)
SA Risk Report (IRMSA 2016)
Land reform scenarios(Clem Sunter 2016)
SA Flags to watch (IRMSA)
1. Corruption
2. Quality of infrastructure
3. Inclusive leadership
4. Pockets of excellence - can they be
replicated?
5. Entrepreneurial revival
Flags to watch in labour
marketFlags are key trends (unfolding events).
1. Embracing the new world of work
2. Reaching an inclusive, collaborative
approach to labour market development
Embracing the new world of
work
• NDP implementation of “new world of work”
recommendations;
• Level of technological innovation by SA
employers;
• Adaptation of education system to “new world of
work” including practical, vocational training;
• Ability of informal sector businesses to transition to
the formal sector;
• Freedom of movement of employees between
formal and informal types of work.
Inclusive labour market
development• Resolution of centralised bargaining structures in
favour of new world of work;
• Significant programmes and results in anti-
corruption and competitive practices;
• Agreements on industrial action rules leading to
decrease in violent strikes;
• Power of organised business, labour &
government used to reach & implement
transformative agreements;
• Adoption of co-determination practices at
employer level.
Co-determination model
Scenario 1: Lone Wolf
• Many employers innovating & making fundamental changes to how work is done.
• More outsourcing & use of freelancers leads to decrease in employment among
large employers.
• Start-up business increasing, medium-size decreasing & failures increasing.
• Disruptive business models increasing, traditional businesses exit market.
• ICT & services grow, unskilled trapped into low wage.
• Economic growth accelerating, but unemployment & income inequality
accelerating – high levels of social & industrial unrest.
• People move from formal to informal sector – no suitable model of pay &
benefits to protect people.
• Unions try to protect members – traditional industries disappear.
• Unions lose membership & credibility, new unions spring up & cause unprotected
strike action dur to lack of expertise & infrastructure.
• Employer organisations fragment & lose power. Central bargaining councils
collapse, employee benefit schemes transferred to insurance firms.
• Government tries to keep control – tough labour laws.
• More corruption & uncompetitive behaviour, education better; mismatches.
Scenario 2:
Squabbling vultures• Resistance by all parties to recognise fundamental, technology-driven
changes to world of work results in continued low economic growth as SA
products become less attractive & less competitive.
• Lack of consumer led economic growth leads to higher inflation, less
employment and more poverty - income fail to keep up with high cost of living.
• Corruption & anti-competitive practices flourish.
• NDP remains a paper exercise.
• Business insists on free market approach, resists government intervention and
pulls out of centralised bargaining structures.
• BBBEE fails to be broad-based – benefits few.
• Unions losing members & political influence, become more confrontational –
business to their knees, more unemployment.
• More laws to protect workers; poor economic growth.
• Employee benefit schemes transferred to insurance companies.
• Education system fails to improve – low employment.
• Employers bring in skilled & professional workers, more illegal immigrants.
Scenario 3: Blind sheep
• Economic growth still low due to instability of private sector & SOEs to
adapt to new world of work.
• 3 parties recognise inderdependence – moves towards co-determination
to reduce industrial and social unrest.
• Labour market institutions remain largely uncganged, but more
cooperation in dialogue, willing to abandon fixed positions.
• Some improvements in education, but still on old world of work – skills
miss requirements of new world of work.
• Increased levels of trust.
• Corruption & anti-competitive behaviour decreases.
• Collaborative, trusting relationships is unsustainable due to low
economic growth – the new partnerships see no results and therefore
fragment.
Scenario 4:
Pride of Lions• Economic growth accelerates on the back of innovative and adaptive private
sector, supported through social compacts between government, business &
labour.
• New ways of dealing with protection of vulnerable employees; new ways of
employing & training young people, new ways to match education system to
needs of new world of work.
• New structures & collaborative approach enable flexibility as the structure of
the economy and completely new business models emerge, flourish and are in
turn transcended and disappear.
• To reach social compacts, the parties have abandoned fixed, ideologically-
based approaches and found new ways to accommodate genuine and
fundamental interests of different segments of the population.
• Government and social partners have implemented the NDP, SA has an
efficient and politically independent civil service and as a result, service
delivery has improved and the lives of South Africans improve.
• Inequality and unemployment reduced, skills levels & labour stability improve
and SA’s overall competitiveness improves (better ratings agencies scores).
Exercise
1. Of the 4 scenarios, where are we now in
South Africa?
2. Of the 4 scenarios, which one do we need
to create an effective labour market?
3. Discuss 3 actions you can do at your
organisation to get us to the ideal scenario.
4. Brainstorm 3 actions we as the HR
professional community should do to
influence stakeholders in considering these
scenarios.
Next steps• Distribute on Internet today.
• Share with your teams and other key
stakeholders.
• Incorporate your inputs.
• Further consultation with key stakeholders.
• Reflect on the scenarios, commit to
collaboration in order to influence the future.
• Consider actions driving it forward.
• Workshops to take it further.
• Application at organisations.
What should we do with
scenarios?“These scenarios are not forecasts of what
will happen or proposals for what should
happen, they are stories about what could
happen under different circumstances. They
are designed to trigger thinking about a future
that is coming at us faster than we will be able
to respond if we don’t make time for the
courageous conversation.”
Brian Whittaker, Vumelana Advisory Fund
Conclusion
HR Professionals and their organisations
should take an active role in shaping the
future. Let us start courageous conversations
and commit to real engagement and being
prepared to accept outcomes other than those
which each party prefers. A deep grasp of the
socio-political environment is required. Let us
build relationships, understanding to create a
new way forward. We need to reflect on the
scenarios and commit to collaboration in order
to influence the future.
We set HR standards!
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