The concepts of labour broking and outsourcing are often misinterpreted and are used interchangeably, creating confusion about the intent behind the concepts. There are a number of differences between the two. The key difference is the type of employment generated.
Labour broking is more inclined towards temporary or casual employment, while outsourcing creates fixed-term or permanent employment, and employees are entitled to the benefits and full protection under the Labour Relations Act.
We have seen, particularly in South Africa, that outsourcing has emerged as a sustainable stimulator in the creation of jobs for our youth. South Africa is facing high unemployment rates among graduates and first-time job seekers. We believe that outsourcing promotes the eradication of youth unemployment in SA as employment data shows that almost 50% of outsourced staff are aged between 26-30, and approximately 40% are aged between 18-25 years old. Therein lies the opportunity to change the face of unemployment in South Africa through effective outsourcing models.
Unfortunately, through negative connotations associated with outsourcing and labour broking through the political climate in South Africa, the issue is not the nature of this type of employment but rather the abuse which some organisations place their staff under. In fact, we have indisputable evidence that both outsourcing and labour broking improve the employability prospects for youth in a sustainable manner, if proper labour practices are in place. We are facing a situation where 60% of our youth are unemployed. At SoluGrowth we believe that consideration of these employment practices should be taken seriously by policymakers and employers to provide a sustainable employment solution for our youth.