An assessment of loyalty towards temporary employment services in the South African metal and engineering industry

Abstract

The economic environment in which firms operate is especially challenging in South Africa (Statistics South Africa, 2016:1), which only exacerbates the necessity of government to cultivate an appealing and supportive business environment. Global Entrepreneurship Monitor (2015:15) confirms that South African employees, those who are currently employed, “should be protected from unscrupulous behaviour", but acknowledges the importance of labour legislation and the role it should play in ensuring a flexible employment environment, which equips the unemployed with the ability to successfully seek employment whilst allowing businesses to “grow and expand without the fear of punitive or overly onerous regulations". Despite the aforementioned acknowledgement of the importance of flexible employment arrangements, recent changes to labour legislation brought forth more restrictions in the employment arena. As a result, a decline in the use of TES across industry sectors, but more specifically the Metal and Engineering industry, is noticed. The cause has been traced back to changes in legislation governing TES and fixed term contracts. The purpose of this study is to explore the means in which TES' can gain or regain the loss of loyalty of firms in the metal and engineering industry. This study firstly considered literature to understand the determinants of loyalty and utilized the information to make it relevant to the TES in the metal and engineering industry, by identifying prominent factors affecting client loyalty given the specific context and challenges faced, which have led to the decline in the use of TES in the metal and engineering industry as well as industries across South Africa. The researcher then conducted empirical research in the field to establish how clients view TES, the perceptions they have of TES, the challenges they face when using TES and what value they see in using a TES. This paper concluded that clients view TES as an extension of their business, by providing business support functions such as the sourcing and supply of competent staff, which are also major contributors the securing loyalty. Securing a client's loyalty towards TES would further require TES to constantly be at a client's beck and call, whilst being professional, competent and friendly at all times. Delivering a service of high quality and complying to the necessary labour legislation have been found to be equally important in securing client loyalty.