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National Employers Association of South Africa CEO Gerhard Papenfus said on Tuesday that the country needed a new culture of increased productivity in the workplace.

The association is South Africa’s largest employers’ organisation with more than 20,000 members.

Workforce management group Adcorp estimates that labour marginal productivity — a measure of the contribution labour makes in the output process — is at the lowest mark in more than 40 years. “Wage increases without accompanying productivity increases are not sustainable and in the long run will lead to job losses,” Mr Papenfus said. “This is something South Africa cannot afford in light of the impact on the economy and the socioeconomic conditions of workers. It will also not help in the government’s efforts to create 5-million jobs by 2020 and double the figure by 2030.”Labour unions are demanding more from employers as the disposable incomes of their members come under pressure from higher administered costs, including those relating to electricity and transport. Last year, most employers had to grant above-inflation wage hikes, which are often not accompanied by increased productivity. Labour productivity growth decelerated marginally from 1.4% in the third quarter of last year to 1.2% in the fourth quarter, the latest available Reserve Bank data show.

This comes after year-on-year growth in formal sector employment moderated at a slightly slower pace than that of output in the fourth quarter of last year. “Labour productivity is in crisis in South Africa. We have got to revise … collective agreements to allow wages to be linked to on-the-job performance in both the private and public sectors,” Adcorp labour market analyst Loane Sharp said. “If wages rise faster than labour productivity growth, the consequence is unemployment.” Issues of productivity are often considered on competitiveness rankings. South Africa ranks 52nd out of 144 countries in the World Economic Forum global competitiveness index.

However, Trade and Industry Minister Rob Davies recently criticised the global survey, labelling it of limited value.

He said its limitation was that it was “inherently subjective” in the way it collected data, rendering South Africa’s ranking of “modest importance”.

Productivity SA value chains and competitiveness executive manager Sello Mosai said one of the ways in which South Africa could move up the competitiveness rankings was by supporting value-adding industries.

“The government is already making competitiveness a priority with specific focus on industries such as agro-processing, the green economy, mining and automotive,” Mr Mosai said.

Productivity SA cautioned that there needed to be a “stable labour relations” environment in order to boost productivity levels.

Production at some of the country’s mines could be compromised if wage talks between mining companies and trade union leaders representing mineworkers deadlock.

Chamber of Mines CEO Bheki Sibiya warned on Monday that South African mining companies and trade unions risked destroying the country’s biggest export industry if wage talks failed.