If South Africa wants to reach its potential it needs to ensure that the skills exist to make this country a prosperous one, with opportunities for all. Whether these skills are only home grown or some are imported abroad should not really matter, but South Africa is failing in this task.
The latest Critical Skills List is indicative of the government’s failure to cultivate a highly skilled workforce domestically. In essence, the 2022 Critical Skills List outlines the skills in short supply in South Africa. Skilled foreign nationals will be able to establish whether their profession is in demand in the country. Some of the occupations in demand include architects, chemists, civil, industrial and mechanical engineers, economists, software developers, tax professionals, and maths and science teachers. Expatweb’s latest Critical Skills Survey, based on a sample of 220 businesses, indicated that businesses found it exceptionally difficult to recruit engineers and ICT specialists. South Africa now increasingly needs to try and lure these skills from abroad, as the country has failed dismally to produce them locally.
There are several factors which have led to the growing skills deficit in South Africa. The most obvious is the country’s abysmal education system. Of the 1.1 million children who were in Grade 1 in 2010, only 750 000 (67%) managed to make it to matric. And of the original Grade 1 cohort, only 256 031 (23%) pass their final matric exams well enough to gain university entrance. Even more shocking is the fact that only 19% of black matric candidates achieved a maths pass of more than 50% in 2021, and only 24% of black matric candidates attained similar results for physical science.
These results in critical subjects explain why the country is now looking abroad for engineers and other professionals. Yet, despite the poor performance of mostly government run schools, no clear plan has been articulated on how to fix the education crisis. Instead, Basic Education Minister Angie Motshekga proudly announced that the 2021 matric pass rate was 76%, while our Bachelor’s pass rate stood only at 36%.
Poor educational outcomes have also increasingly led to a skills mismatch in the South African economy. A key trend shows that formal employment in primary and secondary industries, such as mining and manufacturing, has declined over the past decade. On the other hand, employment in tertiary industries, such as finance and transport, saw an increase in its share of formal employment during the same period. A growing tertiary sector requires fairly high-skilled individuals, yet South Africa’s education system is producing a low to semi-skilled workforce.
Despite the growing skills mismatch, South Africa is also making it exceptionally difficult for the small pool of talented workers we still have, to remain in the country. Harmful government policies such as BEE, which has been used as a vehicle for corruption and nepotism, have resulted in poor service delivery and decaying government infrastructure. According to immigration specialists, Sable International, load shedding and a failing electricity grid was one of the major contributing factors for why skilled people were looking for a way out of the country. Despite introducing meaningful reforms, the government is planning on doubling down on these harmful policies.
Parliament recently began public hearings on the controversial Employment Equity Amendment Bill. Proposed changes will enable the labour minister, in consultation with the stakeholders of a particular sector, to set numerical sector-specific employment equity targets. Companies that fail to comply with the targets can be fined between 1% and 10% of turnover and will be disqualified from doing business with the government. Businesses would be reluctant to expand at all if they were forced to hire staff on a basis that did not consider skills and experience. This will also further accelerate the skills flight in the country.
Another major policy concern is the National Health Insurance (NHI). Despite the warnings from many experts, civil society groups, and healthcare professionals themselves, about the disastrous effects of nationalising the healthcare sector, government has once again recommitted to the policy. The South African Medical Association (SAMA), which represents 12 000 medical doctors in South Africa, stated that thousands of its members will emigrate if the NHI is implemented. A survey conducted by SAMA showed that as many as 38% of its members plan to emigrate from South Africa due to the planned introduction of the NHI.
While current government policy serves as a major push factor, emigration of highly skilled South Africans is also driven by the major pull factors of the developed world and the bountiful economic opportunities that exist in countries such as the United States (US) and the Netherlands. According to the US Labour Department, the country is currently going through a jobs boom, with nearly 700 000 jobs being added in February, and the unemployment rate dropping to just 3.8%. Similarly, the Netherlands’ Central Bureau of Statistics (CBS) reported that the country is recovering from the pandemic with an economic growth rate of 4.8% in 2021.
This has resulted in massive jobs growth, to a point where the Netherlands is facing a new problem, job vacancies are now outnumbering the number of unemployed people. Essentially, there are roughly 123 vacancies for every 100 unemployed people according to the CBS. Therefore it is not surprising that data from the Netherlands has shown strong growth in the number of South African immigrants in recent years, with South Africa named in the top 10 source markets for migration to the Netherlands in 2021.
Loss of skills
Not only are we losing our talented employees to the developed world, but we are struggling to convince other nations’ best and brightest to come to South Africa. This is even though the country is seen as a relatively affordable tourist destination.
According to a 2018 Expat Explore Index from HSBC, South Africa was ranked as the third worst country for expats. Out of 31 countries ranked, South Africa was positioned 29th. The HSBC survey asked expats to assess their current country of residence across 27 indicators in three categories. There were three indicators in which South Africa performed exceptionally poorly. South Africa ranked third to last (29th) regarding the political situation and government policies, second to last regarding economic confidence (30th), and last in terms of safety and security (31st).
The country’s failures in maintaining a highly skilled workforce is further reflected in the Institute of Management Development’s (IMD) latest Global Talent Ranking for 2022. The IMD graded 64 economies based on a range of factors, including investment in and development of local personnel, the ability to attract and retain skilled workers, and the quality of domestic talent pools. Out of 64 countries, South Africa was ranked second to last (63rd).
Botswana was the only other African country that featured on the ranking, and it was ranked far higher up than South Africa. Our neighbour was ranked 44th with a score of 52 out of 100, compared to our meagre score of 32. Worst of all is that the only country South Africa managed to beat was Venezuela – a country in the midst of political, economic and social turmoil.
The exodus of skills will have serious implications for the South Africa’s political and socio-economic sustainability. Lack of skills will negatively impact business confidence and the willingness for businesses to expand. This will further increase unemployment (already at record-level highs) while diminishing South Africa’s already vanishing taxable population. However, the government appears to lack the appetite for reform that will encourage the growth of skills. Instead, the government is doubling down on policies that incentivise skilled South Africans to call it quits, and so the country continues to bleed skills. Banks, retailers and businesses are already fighting over the limited talent pool. As Gerrie Fourie, the CEO of Capitec said, there is now a ‘war for talent’ as South Africa’s pool of skilled individuals continues to shrink. And it’s unlikely to get better.
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