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Businesses in SA: It’s time to harness your power to create economic change

By Jessica Hawkey, Managing Director of redAcademy

A month has already passed since the historic elections held on May 29 but, I am sure everyone would agree, we’re back in limbo already. There can only be one orientation going forward: All hands on deck and ensure that not only are we on the same ship, but we are steering it in the same direction. Businesses are the engine room, of that there’s no doubt. Yet, through a myriad of reasons, businesses by and large have found themselves in a pattern of complaining about the economic situation rather than realising (or acknowledging) that they really do have the power to make a big change, and comparatively quickly.

This is the South African paradox: There is a crushing skills shortage with not nearly enough skills to fill crucial roles. This is like a giant anchor holding back competitiveness, innovation and investment. Yet, this skills shortage is in a country with a crippling, dangerously high unemployment rate. Of those unemployed, young people, who should be powering new economic growth with dignity, are disproportionately affected. 

Let’s put some numbers to the dire state of affairs. Nine million youth are not in education, employment or training. The population of New Zealand is 5,1-million people. This helps sink the sheer magnitude of the tragedy, but also at the absolute potential for economic growth.

Almost half – 42% – of all households in this country do not have one person with a single job. The youth unemployment rate is 45,5%. According to the latest Harambee – Breaking Barriers report, of about 3,8-million youth, only 10-15% stay employed after getting a job, with about 30% to 40% churning in and out of roles, including public employment. What is this telling us? There is a desperate need for skills that are demand-led, and training that produces work-ready young people. 

As reported by Harambee, there are 66,000 unfilled technology roles in South Africa, where 44 000 of these roles are reported to be suitable for youth. The country spends an estimated R8,5-billion off-shoring ICT skills and we are a net importer of technology skills. This, while there are proven, relatively fast, solutions that radically change the scenario and come at no additional cost for businesses. If it sounds too good to be true, it isn’t. So, where to from here?

Report on off-shoring

Organisations need to actively report on their offshoring, particularly around the skills they are after, and the tangible actions they have taken to reshore these skills. Spending on conferences and events alone is not good enough. 

The R8,5bn offshored can absolutely be spent locally, with the requisite economic knock-on effect for households that now have employed people in them. It should, however, be noted that this will be achieved over time, as we build up the skills locally through business collaboration to grow our youth’s skill levels. Off-shoring excludes our own unemployed youth, reduces our tax base, and reduces the future customer base. The population is growing, so if the status quo remains, today is the best this country will ever be.  

Redefine what a suitable candidate looks like

A non-negotiable bachelor’s degree requirement may well be creating more obstacles for our country in some professions. Degrees are great, and graduates bring immense value to the world. However, Harambee’s latest report has found that employers who are prepared to redefine what a good employee looks like are reaping the rewards of inclusive hiring. It is not sustainable for businesses to continue relying on university skills alone, which take three to four years to produce. But even then, graduates are not always ready for employment when you factor in internships and the need for the young people to build up their own networks and work readiness or experience.  

Stop the box-ticking

At board level, businesses need key metrics to measure what they are doing to bring newly skilled people into their business. This should not include poaching skills from an increasingly competitive pool. Newly skilled means people who have engaged in training programmes, but would not have had employment if not for this intervention – as obvious as it is to read, not doing this makes no impact on the unemployment rate. Businesses need to stop using skills development as a box-ticking exercise where they may support an array of programmes but ultimately import skills because they have no strategy for change. 

It is possible to deploy a skills development budget in a way that genuinely increases a business’s talent pool, while boosting diversity and productivity. When we designed redAcademy, the strategy was clear: We needed to bring work-ready youth into the workforce quickly. We needed to develop a sustainable, skilled talent pipeline for a business’s unique needs, with work-ready software developers that have been trained on live projects using relevant and up-to-date software and modalities.

As a country, we need to upskill for the economy we all know is coming. 60-70% of the skills India produces are not used in India. We must build quality skills in great numbers if we are to match what’s out there. We need to reshore that R8,5-billion. Companies have shown their appetite for offshoring their needs to South Africa, as seen in the success of contact centres and their rate of growth in South Africa, and this absolutely can be replicated in the technology industry. This potential future is vastly different from where we are now but it requires action. Kicking the can down the road does nothing.

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