Hiring Patterns, Firm-Level Dynamics and HIV/AIDS: A Case Study of Small Firms on the Cape Flats

Abstract

This paper explores firm-level responses to HIV/AIDS. Case studies of seven small manufacturing firms on the Cape Flats failed to record any reported HIV prevalence or any perceived increases in costs due to HIV/AIDS for any of the firms interviewed. However, an interesting picture of labour practices at the bottom end of the formal job market emerged. Small firms look after their skilled workers, but take on and dismiss unskilled workers at a high rate. Small firms do not pay medical benefits and recruit using a well-developed community network to identify good workers. These companies are thus less likely to incur significant AIDS-related costs on the production side. There is anecdotal evidence that the impact of AIDS will be on the demand side with firms perceiving that customers avoid infected workers in service provision.