Permanent employment in Zimbabwe's manufacturing sector has declined to 64% of the workforce as companies increasingly turn to temporary and fixed-term contracts to manage costs and adapt to a challenging business environment, according to the 2025 Confederation of Zimbabwe Industries Manufacturing Sector Survey.

The survey found that temporary employment has steadily increased over the past three years, rising from 28% in 2023 to 30% in 2024 before reaching 36% in 2025. As temporary employment increased, permanent employment fell from 66% in 2024 to 64% this year, reflecting a gradual shift in the way manufacturers are hiring.

According to CZI, manufacturers are increasingly relying on fixed-term and temporary workers to respond quickly to fluctuating demand, manage operating costs and remain flexible amid economic uncertainty.

"While such flexibility may help firms remain competitive in the short term, a sustained decline in permanent employment could have longer-term implications for job security, employee benefits and workforce productivity, particularly if firms reduce investment in skills development and long-term human capital," the report said.

The survey found that the decline in permanent employment was recorded across most manufacturing subsectors. However, the wood products, metals, and rubber and plastics industries bucked the trend.

The metals sector recorded the strongest improvement, with permanent employment increasing from 60% in 2024 to 81% in 2025, reflecting the industry's demand for specialised skills and stable production processes.

CZI said capital-intensive industries generally require highly skilled workers and are therefore more likely to maintain permanent employment, while labour-intensive sectors continue to depend on temporary workers to reduce costs and respond to changing production needs.

The report also found that the age of a business influences its hiring patterns.

Permanent employment in firms operating for less than five years declined from 63% in 2024 to 59% in 2025, while companies aged six to 10 years recorded a sharper drop from 68% to 57%.

Businesses operating for 11 to 20 years increased permanent employment from 62% to 68%, while firms aged 21 to 50 years saw permanent employment decline from 67% to 60%.

Companies operating for 51 to 100 years recorded a slight decline from 70% to 66%, while businesses that have existed for more than 100 years experienced the sharpest drop, with permanent employment falling from 67% to 49%.

According to the report, younger firms often face financial constraints and uncertain market conditions, while older firms may be restructuring or adjusting to changing market dynamics. In contrast, companies that have operated between 11 and 100 years tend to maintain more stable workforces because of established operations, predictable revenue streams and stronger human resources systems.

Labour-intensive industries recorded the highest levels of temporary employment.

The non-metallic mineral products subsector had the highest proportion of temporary workers at 50%, followed by beverages (45.2%), wearing apparel (43.1%), textiles (40.5%), food products (39.9%) and rubber and plastics (39.5%).

Other subsectors also recorded significant levels of temporary employment, including fabricated metal products (32.8%), paper products (32%), chemical products (31.6%), wood and wood products (31.6%), other manufacturing (29%), repair and installation of machinery and equipment (28.5%), furniture (27.6%), basic metals, machinery and electrical equipment (19.4%) and printing and recorded media (19.1%).

CZI attributed the trend to seasonal demand, project-based production cycles and efforts by manufacturers to contain costs in an increasingly competitive market.

The survey also found that temporary employment has increased across companies of all sizes, suggesting the trend has become widespread throughout the manufacturing sector rather than being confined to small businesses.

Labour consultant Itai Bonda told Zim Now that the shift towards fixed-term contracts reflects the realities businesses are facing and should not automatically be viewed negatively.

"As labour consultants, we help businesses tailor their workforce to suit their needs so they can manage costs. Why should I have permanent contracts, which are more expensive, when I can employ someone on a three- or six-month contract and manage whatever work comes within that period?" he said.

Bonda said employers should choose the type of employment contract that best suits their operational requirements.

"We even encourage businesses to use hourly contracts because you hire according to the work that needs to be done at that particular time."

He said labour laws should evolve alongside economic, political and social changes.

"There is nothing wrong with these changes. Labour law is not static. It changes according to what is happening politically, socially and economically. If we remain focused only on job security without looking at business realities, we will not be able to sustain these businesses. That is when you see companies retrenching."

Bonda, however, cautioned employers against abusing fixed-term contracts by repeatedly renewing them simply to avoid their legal obligations.

"Casualisation of labour is rolling over contracts unnecessarily to try to avoid the law, which is impossible," he said.

He added that Zimbabwe's labour laws already contain safeguards to protect workers and, in certain circumstances, employees who continue working beyond the period provided for under the law may be regarded as permanent employees.

Bonda said the focus should be on ensuring workers receive fair compensation for the value they produce rather than on the type of contract they hold.

"The way forward is flexibility. The only concern is that workers should get compensation that matches what they are producing. If a business is making money, it should remunerate its workers handsomely."

He said manufacturers also face operational challenges that make workforce flexibility essential.

"What would you do if there is no electricity for two weeks because of load shedding but you still have permanent workers to pay? Businesses need employment arrangements that reflect operational realities."

While the CZI survey notes that employment creation has improved and retrenchments have declined, it warns that continued reliance on temporary employment could weaken job security, reduce access to employment benefits and create productivity challenges if companies do not continue investing in skills development and long-term workforce growth.