Employment fell sharply at an annualised rate of 1.3 percent in May, according to the Adcorp Employment Index released on Monday.
This broke a four-month-long pattern of strong employment growth.
“All sectors, all occupations, and all employment types recorded declines,” Adcorp said.
The sharpest declines were reported in agency work, which dropped 9.1 percent, the transport sector (-12.7 percent), mining (-12 percent), domestic workers (-8.4 percent) and elementary workers (-5 percent).
However, employment in professional positions grew 4.9 percent and senior management employment increased by 2.2 percent.
Adcorp’s index of informal sector employment rose by 1.2 percent, representing the 11th consecutive monthly rise.
Temporary employment now accounted for 30.2 percent of the national workforce, or 3.93 million workers.
“Ironically, current tightening of South African labour laws will have the unintended consequence of expanding, rather than reducing, the role of temporary and agency workers in South Africa,” the company said.
The trend towards temporary employment had been the most striking characteristic of the South African workforce over the past decade.
Since 2000, permanent employment had fallen from 11 million to 9.1m workers, an 18.7 percent decline.
Permanent employment had barely recovered from the global financial crisis.
Since the 2009 recession, permanent employment had increased by just two percent.
Over the same period, total employment comprising both permanent and temporary workers had increased by 12.2 percent.
Agency workers, numbering one million, accounted for 25.5 percent of temporary workers and 7.7 percent of the total national workforce.
Since 2000, temporary work had grown at an annual average rate of 8.5 percent, permanent work had declined by 1.3 percent a year, and agency work had grown at 11.9 percent a year.
This was part of a global trend towards outsourcing.
In addition, many companies faced varying sales volumes, seasonal cycles, or fixed-duration projects, which required flexible labour costs and could mean they did not need permanent workers.
“Modern businesses no longer keep office hours, with the result that shift workers have become increasingly common,” Adcorp said.
Restrictive labour legislation had also played a role in this trend.
“Ironically, the current round of tightening of South African labour laws might have the unintended consequence of expanding, rather than reducing, the role of temporary and agency work in South Africa.”