The cost to employers of limiting the catchment size from which they employ their staff. Viola Proctor.
Master Thesis
2013
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University of Cape Town
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Apartheid has left an urban legacy with excessive commuting distances for low income workers. Climate Change and Peak Oil will cause transport costs to rise. „Low carbon‟ solutions are not viable in developing cities such as Cape Town, where most workers already use public transport and it is unlikely that governments will have the resources to further subsidise increasing transport costs. Consequently, a proposal to restructure the city to reduce travel distance between work, home and recreational activities will assist the poor but also mitigate climate change. Cities in developing countries are expected to double in population over the next 25 years. This provides the opportunity to plan new settlements to reduce the dependency on motorised travel. This study seeks to explore one specific dimension of the costs and benefits of city restructuring: the perceived costs and benefits to employers of reduced employee catchments and whether there is “a point where increasing the size of the catchment of employees does not produce additional benefits to the employer.” Interviews were conducted with 47 managers of large Cape Town companies. A stated preference questionnaire was compiled to identify the trade-offs that employers make when faced with recruitment decisions. The costs were presented as a proportion of the company‟s current recruitment pool, the average distance travelled by employees per day, the change in environmental impact (CO2 emissions) of staff commuting and the financial cost of employee travel to the business (comprised of transport subsidies and carbon tax).Employees were divided into two groups. “Level 1” were low to lower-middle income staff (earning R3 000 – R10 000 per month) and “Level 2” were middle income staff (earning R10 001 – R30 000 per month). A Multinomial Logit (MNL) model was used to analyse the Level 1 and Level 2 data separately in terms of employers‟ utility. Results showed that an inflection occurs in employers‟ perceived value of catchment size and indicates a possible range at which this occurs. For employers recruiting Level 1, this inflection occurs at approximately 50% of the current recruitment pool and 15km radius. For Level 2 staff, this point of inflection would be approximately 55% of their current recruitment pool and 15km radius. Employers also emphasised the importance of low cost public transport to their business. As travel costs inevitably rise, reducing travel distances may become the only viable and long term solution. To become a viable solution, employers‟ fears must be understood and overcome. Denser and more integrated settlements around business hubs need to be presented as a win-win for environmental, social and economic sustainability.
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Proctor, V. 2013. The cost to employers of limiting the catchment size from which they employ their staff. Viola Proctor. University of Cape Town.