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The domino effect of the COVID-19 pandemic on South Africa’s already struggling economy has caused unemployment levels to rise to historical heights. Stats SA reported that 32.5 percent of the South African workforce were unemployed as at December of 2020. That equates to an estimated 7.2 million unemployed South Africans, with the youth (ages 25-34) being the most effected.

Small-and-medium-sized enterprises (SMEs) have always been great drivers for employment, but have been some of the hardest hit by the pandemic and ensuing lockdown – with many having not survived and forced to let staff go in the process. However, this sector still holds great potential for job creation and continues to play a significant role in the recovery and growth of the South African economy.

Here are some tips on how SMEs can continue to offer employment opportunities and solutions to South Africa’s urgent unemployment dilemma:

1. Use your networks

Network with other SMEs to share resources. It’s possible that staff who were downsized from one business, are ideal candidates for positions opening at other, connected companies. It’s important for business owners to keep lines of communication open with customers, suppliers and industry peers to identify such opportunities. In the same vein, be sure to share job vacancies with business networks when they arise.

2. Formalise your employees

It is absolutely crucial to formalise all levels of employment within your business and to register all employees with the Unemployment Insurance Fund (UIF) – if you have not yet done so. This will help protect staff should the need arise. As retrenchments are still a reality across South Africa, all business owners have an obligation to ensure that their employee admin house is in order.

3. Rotate staff

As an alternative to retrenchments, consider rotating staff by offering employees reduced workloads at a reduced salary instead of letting them go completely. It’s interesting to note that the four-day work week was similarly used as a mechanism to preserve jobs during the last Great Depression.

4. Upskill the youth

Lastly, take the opportunity to upskill where you can. For instance, internship programmes that help candidates learn new skills and gain experience, can be a mutually beneficial solution to the issue of unemployed youth. The best innovators lie within SMEs, this sector therefore has the power to transform the South African skills pool. The added benefit for participating businesses is improved productivity and better options for talent selection.

Even as SMEs continue to take strain and may feel powerless against the many challenges that our country is facing, the above examples illustrate that there is always something that they can do, no matter how small and highlights the important role that SMEs can play to help tackle South Africa’s unemployment issue.

About the Author: Ben Bierman

Ben Bierman
Ben Bierman has been our Managing Director since 2015. He joined our company in 1990 and has risen through the ranks occupying various positions ranging from being a management accountant, Head of Information Technology and Chief Financial Officer. Ben is an avid reader, enjoys classical music and being in the outdoors including for hunting trips. He is our go-to-spokesperson for our SME Confidence Index, SME sector policy and trend matters, and business leadership articles.

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