Will small and medium enterprises provide HIV/AIDS services to employees? An analysis of market demand

By  Professor Sydney Rosen  Patrick Connelly  |  | 


Background: Although many large businesses have begun offering HIV/AIDS prevention and treatment services to employees, the vast majority of small and medium sized enterprises (SMEs) have not. SMEs face constraints reducing their demand for services. This study identifies and evaluates those constraints to determine the extent to which SMEs can be expected to implement HIV/AIDS programmes, and to identify opportunities for strengthening the role of SMEs in South Africa’s response to the epidemic. Methods: Structured interviews were conducted with a random sample of 80 SMEs located in KwaZulu Natal (KZN) and Gauteng provinces. Results: About one quarter of the companies sampled provided some HIV/AIDS services to employees and fewer than half incurred any direct costs to provide those services. Although 52 per cent of the companies believed they had lost employees to AIDS, few of those employees were regarded as critical to operations. AIDS accounted for 10 per cent of the overall annual employee turnover of 13 per cent. Few companies incur direct costs in recruiting or training, and just 30 per cent of permanent employees have access to employer sponsored healthcare. HIV/AIDS ranked 9th of 10 major business concerns faced by SMEs. Conclusions: Since managers believe few employees are leaving the workforce due to HIV/AIDS and SMEs appear to incur few costs to replace workers, managers are relatively unconcerned about HIV/AIDS. Serious demand-side barriers exist in the market for HIV/AIDS services for SMEs. For most of the SMEs in our survey, the constraints are too great to expect SMEs to play a major role in the national response to AIDS without assistance. As the negative consequences of the maturing HIV/AIDS epidemic become evident in South Africa, many larger businesses have begun to implement HIV/AIDS workplace programmes that include prevention and treatment services for employees. The vast majority of small and medium sized enterprises (SMEs), however, have not.2 A recent survey conducted by the Bureau for Economic Research (BER) found that among companies with fewer than 100 employees, 13 per cent had formulated an HIV/AIDS policy and 29 per cent had offered an HIV/AIDS awareness programme, compared with 92 per cent and 94 per cent, respectively, for companies with more than 500 employees (Ellis and Terwin, 2003)

Publication details

South African Journal of Economics