AIDS Threatens SME

The future success of Small and Medium Enterprises (SME) and the livelihood of many South Africans could soon be off the economic radar screen if business fails to deal with the destructive HIV/AIDS threatening the SME.

This is according to a research on the impact of HIV/AIDS on the SME in the country.

The survey, conducted by Ebony Consulting International (ECI) - an organization that provides economic solutions to businesses and governments throughout Southern Africa - was released during a seminar on the disease impact on economy in Pretoria yesterday.

It warned of disastrous consequences the epidemic could have to the growth and development of the country's economy if the disease was not arrested and controlled adequately.

The ECI operations Director William Grant said the study was conducted because SME played a vital role in providing employment in South Africa, adding that the disease threatened the livelihood of many workers.

Mr Grant said of the 120 firms interviewed - 25 percent in Durban, 50 percent in Gauteng, and 25 percent in Cape Town - it was found that most firms were concerned about the decrease in productivity, while (18 percent) were concerned about loss of skilled staff, due to the effects of HIV/AIDS on employees.

He added that the economical impact was measured by differentiating between direct costs such as the payments, recruitment, training expenditure and indirect costs such as on-the-job productivity and increased absenteeism.

The study also found that firms, which incurred indirect cost owing to the impact of HIV/AIDS, experienced shortages of skilled labour, problems with absenteeism (23 percent) and a decrease in staff morale.

Nineteen percent of the firms experienced AIDS-related deaths amongst staff.

The South African Chamber of Business (Sacob) said last year that with an absenteeism rate of about 15 percent - usually caused by strikes - there was an estimated production loss of some R225 million per working day.

This means that if absenteeism is recurrent due to people falling ill and not coming to work, the production loss could be devastating to SME's.

Mr Grant said that SME's needed to act now to educate their workers about the epidemic and form partnerships with other firms who were succeeding in their fight against HIV/Aids in their workplaces.