Skills vs Jobs: What are the Real Reasons for our Appalling Unemployment Rate?

Amongst the myriad of challenges facing the South African economy (high unemployment, the energy crisis, political uncertainty, corruption, etc.), perhaps our greatest hurdle is the lack of skilled workers. According to the Xpatweb Annual Critical Skills Survey for 2021, 78% of employers indicated that they struggle to recruit employees with the critical skills they require and a further 74% suggested that looking abroad would assist in acquiring these resources. The recent Government clampdown on certain companies employing a majority of foreign nationals, in contravention of the Employment Equity Act, has further highlighted the shortage of local skilled workers which is prompting many organisations to employ foreigners.

Another interesting point to consider is the mismatch between the skills of graduates compared to the requirements of companies wishing to recruit new employees. A fairly recent study conducted by a master’s degree graduate at University of Pretoria revealed some important insights when comparing information from online job adverts to data from the Higher Education Management Information System. According to the study, companies place considerable importance on a candidate’s experience and are reluctant to employ new graduates. The results also showed a lack of graduates in the business and financial operations/management occupations, which are the fields in greatest demand by employers. On the other hand, there seems to be an abundant supply of graduates in the educational instruction and library occupations, which is not matched by the demand from business.

Lack of skilled labour and supply and demand mismatches aside, another important question is whether South Africa in fact has enough jobs available for our current labour force and unfortunately the answer to this appears to be ‘No’. Kerry Morris, CEO of leading recruitment specialists, The Tower Group, says, “South Africa has a larger population than the jobs that are crossing our desks every day.”

In addition, the labour force is growing at a much quicker rate than the jobs being created by the economy. Data from the latest Stats SA Quarterly Labour Force Survey shows that South Africa is simply not creating enough jobs for new entrants, or to make up for existing losses. According to the United Nations World Population Prospects report, Africa has the highest population growth, estimated to be 1.679 billion in the year 2030 compared to 1.186 billion in 2015. This presents South Africa with significant challenges in trying to provide sustainable jobs for the growing number of new entrants to the labour force every year.

At Progression, we are seeing some of our clients embarking on more strategic projects in order to nurture and develop the specialist skills they require within their businesses, as opposed to importing foreign resources. The focus of these programmes is on transfer of knowledge and expertise from more senior, experienced employees to junior staff, new entrants and learners with the intention of building a skilled workforce which is underpinned by a strong culture of mentorship and coaching.

Education and Skills Development are undoubtedly the keys to productive employment and economic growth. However, it is essential to adopt a more integrated approach between business and training institutions in order to ensure we are producing the skills that the economy needs. Learnerships remain the perfect vehicle to upskill unemployed individuals while addressing the experience requirements of employers. In addition, it is vital to stimulate job creation by investing in employment generating industries and in particular, supporting the development of small businesses, which are critical to economic growth. Through collaboration and a unified effort between Government, business and the training sector we can indeed turn things around, reduce unemployment and build a strong and resilient economy.

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