Economists throughout the world have all confirmed that the small business community (normally employing fewer than 50 people) is the engine room of job creation for the future.
Issues such as the Fourth Industrial Revolution, computerising, outsourcing and mechanising have meant that big business is, in fact, shrinking its workforce.
This jobless growth in big business is not good news for South Africa. We therefore have to turn to small businesses to help us with job creation in South Africa today.
Unfortunately, small businesses are doing the opposite. For the past at least 10 years, small businesses have chosen to not reinvest in their businesses and to place a handbrake on recruitment. There are a myriad reasons for this.
I will unpack a few of them. First, the fact that small businesses are not exempt from any of our labour laws or the labour regulations has created an enormous problem.
Second, small businesses are dragged, very unwillingly into the bargaining council system. This system creates the same terms and conditions which are applicable to big businesses and small businesses.
Clearly, big business has internal human resource departments and can afford expensive labour lawyers.
Small business can’t afford the same terms and conditions as set out by the bargaining councils, and certainly can’t afford internal human resource departments.
Third, small business is trying to survive but is seldom able to thrive.
There are other factors but, in essence, the small business community has all the labour laws and regulations loaded like a gun to their forehead.
The trade union movement is likewise shrinking. Whereas trade unions would seldom organise in businesses with fewer than 50 employees, today they are desperate for members and are known to be organising even in private households with domestic workers.
This means that trade unions, with all their expertise and manpower are able to focus on small businesses and effectively bully them. The small business owner is unable to match the expertise and power of some very, very powerful trade unions which belong to umbrella groups such as labour federation Cosatu.
This turn of events has emboldened the workforce in small businesses which is able to hold their employers to ransom. This new arrangement has created a workforce in the small business sector which has become a lot more powerful than the small business owners themselves.
The scales have strongly tipped in favour of employees. It needs to be said that our labour law structure is tipped against employers as well.
The combination of strong representivity for the workforce and labour legislation negativity towards small businesses has created an unfortunate situation within the small business sector.
In answer to this negative environment, small businesses are not growing.
It is now incumbent upon our government to have a relook at the negative labour environment and to reassess the situation with regard to our labour laws and regulations.
The business community needs to stand up for the small businesses which feel they are up the creek without a paddle.
Small business owners who are the true entrepreneurs in today’s environment have everything stacked against them.
The first step would be to decouple small business from the bargaining councils; the second, to have a rehash of all the regulations to assess which regulations are hampering the independence of small business.
* Michael Bagraim.
** The views expressed here are not necessarily those of Independent Media.
Do you have something on your mind; or want to comment on the big stories of the day? We would love to hear from you. Please send your letters to [email protected].
All letters to be considered for publication, must contain full names, addresses and contact details (not for publication)