Skills Deficit Hurting SA Business

South Africa’s future competitive advantage lies in creating economic opportunity for its young people and preparing them to be productive players in industry. The solution will not only involve improving access and quality of formal education. But also required is up-scaling in training and supply of qualified artisans to sustain industries and support economic growth and development of the country. The availability of technical skills for industry remains a crucial factor if South Africa is to deal effectively with a high rate of unemployment (currently estimated to be at 25%)

The 2015 Talent Shortage Survey conducted by ManpowerGroup – a multinational human resource consulting firm – paints a gloomy picture of artisanship in the country, in the backdrop of an acute shortage of skilled trades and engineers. The survey, conducted annually using a sample of 750 businesses across South Africa, found that this category of human resource proved to be the most difficult positions for companies to fill.

Managing Director of Manpower Group South Africa Lyndy van den Barselaar says South Africa’s continued skills deficit is exacerbated by a lack of technical skills, which is having a negative impact on employment across many sectors of the country’s economy.

“Furthermore, there is a high instance of poverty amongst South African youth, leaving millions unable to pursue secondary and tertiary education or training, which presents a challenge in terms of their skills development and employment prospects,” van den Barselaar explains.

If these challenges are not adequately addressed, South Africa is likely to go on a trajectory of decreasing opportunity for business and individuals. Ultimately, the country will lose its leadership and role model position in the African continent.

A closer look at the findings from the 42 countries surveyed by Manpower Group in 2014 shows the need for urgent and decisive action to improve the availability of technical skills to sustain industry in South Africa. The country notched fourth position from the bottom, with only 8% of employers reporting difficulty filling jobs. In 2015, South Africa came in at 30th place, with 31% of employers reporting difficulty filling jobs – close on the global average of 38%.

Such talent shortage has a negative impact on company’s ability to meet their business objectives and client needs.

The impact of talent shortages and skills gaps on surveyed SA companies:

68% of local employers said it would reduce their ability to serve their clients

58% said it would reduce their productivity and competitiveness

57% said it was likely to result in higher compensation costs.

49% cited reduced innovation and creativity

46% cited lower employee engagement or morale

44% said it was likely to result in higher employee turnover.

“Owing to the effects the skills deficits are having across industries, organisations are having to find new and innovative ways to face the challenge, in order to minimise the negative effects on their businesses. In order to effectively tackle the skills deficit, it is imperative that provincial government, together with the public and private sectors, continue to support skills training and development. This is not only important for those wanting to enter the job market, but also for existing employees, as technology in the workplace is rapidly evolving and requires all employees to constantly up-skill,” says van den Barselaar.