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De-mystifying the Recruitment/Staffing Industry

Posted On : Sep 27, 2013

De-mystifying the recruitment/staffing industry


Written by: Natalie Singer, APSO Chief Operating Officer


According to the current legislation, agencies may charge applicants a registration fee of no more than R1.00 and a placement fee of no more than 7.5% of their first month’s salary if they are permanently placed. However, APSO follows the International best practice of “no fees to work seekers”. As a result, all APSO member agencies are forbidden from charging any fees to work seekers. We therefore encourage work seekers to choose to deal with agencies that are registered with the association



The labour recruitment industry is a significant contributor to the South African economy and assists, on average, 900 000 people daily, in securing employment on a temporary basis. Sadly research is not available to provide information on the number people who find permanent work, via a recruitment consultant.


The industry is broadly divided into two key areas:


  1. Private Employment Agencies (also known as recruitment agencies); and


  1. Temporary Employment Services (also known as labour brokers).



Private Employment Agencies focus on providing client companies with the service of sourcing and assessing potential candidates who will ultimately be employed on a permanent basis, directly with the client company.


Temporary Employment Services, provide client companies with flexible labour by sourcing, assessing, training and managing employees on a temporary basis. The temporary employee is employed directly by the TES but will conduct work on the client company’s premises.


Some agencies might offer a combination of both services for the convenience of the client company and the work seekers who register with them.


Due to a lack of information, there are many misconceptions about the labour recruitment industry. This article intends to highlight the key misconceptions so as to empower readers and ensure that their dealing with the recruitment/staffing industry is productive and one that, hopefully, leads to permanent employment.


Are private employment agencies and temporary employment services required to register before they begin to operate?


Currently very little legislation exists to regulate the labour recruitment industry. All recruitment/staffing companies are required to be registered companies and, like all other businesses, to be registered with South African Revenue Services etc.


The Skills Development Act of 1998 includes a section entitled “Employment Services”. This legislation dictates that any company that intends to operate as a “Private Employment Office for Gain” is required to register with the Department of Labour. Unfortunately, due to a lack of knowledge and enforcement, some agencies are operating without this registration. Work seekers are encouraged to verify that any agency that they intend to register with has their Department of Labour certificate displayed in their office.


There is also currently a new Bill (draft legislation) called the Employment Services Bill that will specifically regulate the recruitment/staffing industry in South Africa. This is expected to become law in 2014.


Do agencies have to belong to an Association or professional body?


Joining an association or professional body is voluntary at this point in time. The Federation of African Professional Staffing Organisations (APSO), previously known as the Association of Personnel Service Organisations, was founded in 1977 and continues to work towards the professionalisation of the industry. In fact, in September 2013 APSO was officially recognised as the Professional Body for the recruitment/staffing industry.


All APSO members are required to meet stringent entry criteria and are bound by a Code of Ethics and Codes of Professional Practice. These Codes afford protection to work seekers and clients by dictating minimum service standards and allowing for complaints to be investigated in the event that a member agency contravenes the Codes.


Can an agency charge me a fee to register with them?


According to the current legislation, agencies may charge applicants a registration fee of no more than R1.00 and a placement fee of no more than 7.5% of their first month’s salary if they are permanently placed. However, APSO follows the International best practice of “no fees to work seekers”. As a result, all APSO member agencies are forbidden from charging any fees to work seekers. We therefore encourage work seekers to choose to deal with agencies that are registered with the association.


If you come across any agencies that charge fees to work seekers, for any reason, please report them to APSO via our complaints form on our website so that we can report them to the Department of Labour for further investigation.


Does the temporary agency take money off my salary if they find me work?


The temp agency is your employer and is therefore required to deduct all statutory deductions, as per the law. This includes UIF, SDL and PAYE. You must be given a pay slip each time you are paid. This pay slip will provide details of the gross amount you earned, the deductions and the nett amount that is paid to you.


In addition the temp agency will also collect (from the client) the money towards your annual, sick, and family responsibility leave so that they can pay this to you when it is due.


So, if the agency doesn’t charge me any fee, how do they make their money?


Recruitment agencies who find permanent positions for work seekers charge their client a once-off placement fee if they successfully make a placement. These fees are always charged to the client and should not be charged to the candidate/work seeker.


Temp agencies charge their client an hourly rate that includes provisions for statutory deductions, the actual wage for the temp employee and a service fee for provision of the outsourced service. The temp employee will not have any deductions made in order to pay the temp agency to find them a job. The client company pays extra to the agency to pay them for the service of managing the workforce, payroll and associated administration.


What are my rights as a temp employee?


There is no distinction under the law between a permanent or temporary employee. All employees are protected by the Basic Conditions of Employment Act and the Labour Relations Act. This means that you should not expect to be treated any differently to a permanent employee in respect to provisions of leave, unfair dismissal etc.


Does that mean that I should get paid for Public Holidays, even if I’m a temp?


Yes. If you would have worked on a day that is a Public Holiday, you should receive the equivalent wage to that which you would have earned on that day. If it wasn’t a day that you would have worked, i.e. a Saturday if you only work Monday – Friday, then you wouldn’t be paid.



Am I entitled to leave?


Temporary employees, like permanent employees, accrue annual leave at the rate of 1 hour for every 17 hours worked. If you have accrued sufficient leave, you could take paid leave during a temporary assignment. If you don’t use your leave during the assignment, you should expect to be paid out the accrued leave at the end of the temporary assignment.


All employees, whether temporary or permanent accrue sick leave at the rate of 1 hour for every 26 hours worked in the first six months of employment. You will be required to provide proof of illness, like a doctor’s certificate, before being paid.


If you work longer than four months for the same employer, you are entitled to 3 days per annum for family responsibility leave. Your employer will most likely have details on what qualifies for family responsibility leave, usually the death of an immediate family member, and how you might need to provide proof before being granted the paid leave.


What rights do I have when I register with a recruitment agency?


No agency can guarantee that they will be able to secure employment for you. Be cautious of any agencies that do, especially if they ask you to pay any registration or administration fees. If it sounds too good to be true, it probably is.


You have the right to be treated with dignity and respect and to be interviewed in a confidential manner and by a consultant of appropriate experience. The agency must always tell you who the client is, and get your permission, before they send your CV to them. You have the right to be given feedback after the interview so that you know whether or not you were successful.


Before conducting any reference checks, the agency must get your permission (usually on the application form). Any ITC or criminal checks must be done, in accordance with legislation, and should not be used to unfairly discriminate against you in the employment process.


How can I enhance my chances to getting a job through a recruitment agency?


You should always be honest, courteous and co-operative. Agencies deal with many hundreds of work seekers and so you should remember to identify yourself each time you call, perhaps giving them a reminder of what you do.


Make sure that your CV is accurate and honestly represents your qualifications and experience. Don’t be tempted to lie on your CV, it will only backfire and cause the agency to lose faith in you as a work seeker. The agency will be your representative and so their reputation is linked to your performance.


Provide the agency with accurate references and be honest about anything that might cause problems down the line. Be up front if you have any problems like bad ITC record etc. If the recruitment consultant knows what is going on, they’re better able to assist you.


Keep in contact with the agency and make sure that you return their call promptly – they could just be calling to arrange an interview with a client. Be sure to prepare for interviews, dress appropriately and be on time. You can never take back a first impression.


What happens if I experience bad service from a recruitment agency?


If the agency is an APSO member, you have the right to lay a complaint against them. Simply visit and complete the complaints form. If the agency isn’t an APSO member, you need to report them to your local Department of Labour.


The APSO website also contains a host of useful articles on [their] In the Hiring Line blog.


This article was provided  by APSO

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