SA’s skills shortage substantial - Adcorp | Fin24
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SA’s skills shortage substantial - Adcorp

Jan 13 2014 15:56


Johannesburg - The Adcorp Employment Index for November and December last year shows that South Africa’s skills shortage is substantial and is not being met by the local supply of high-skilled workers.

The restrictions on foreigners living and working in South Africa should be relaxed, since this would supplement the dwindling local supply of skills.
Employment figures grew by 23 861 jobs over the same period.

 Adcorp’s labour market economist Loane Sharp says:  “These stats suggest that the living standards in South Africa have remained relatively high during the global financial crisis, certainly compared to other English-speaking countries where emigrant South Africans have taken up residence; and that South Africans who emigrated to other countries prior to the 2008 financial crisis were possibly over-confident about the security of their jobs in foreign countries.

Temporary jobs

“The biggest gains occurred in the informal sector, which created 12 722 jobs during the two-month period, as well as the temporary work sector, which created 5 922 jobs.

“ For the first time in 16 months, permanent work grew as well, adding 5 271 jobs during the month,” says Sharp.

 “Since January 2013, the informal sector has generated 73 799 jobs, compared to a total decline of 241 536 permanent and temporary jobs, reflecting the growing importance of the informal sector in the South Africa labour market.”

Significant job gains were observed in construction and transport which grew by 7.4% and 6.5%.

The financial sector, in contrast, shed 13 000 jobs and the mining sector scaled down by 1 000 jobs.

Financial crisis

The January index also examines the effect of immigration and emigration on the South African employment environment.

“Since the global financial crisis in 2008, approximately 359 000 high-skilled South Africans have returned from foreign work assignments,” Sharp says.

Adcorp was able to estimate the net number of high-skilled immigrants returning to the country using wage data for high-skilled workers.

Data from Adcorp’s recruitment subsidiaries that specialise in placing high-skilled personnel - categorised as workers who earned more than R400 000 per annum in 2013 - provides an interesting opportunity to estimate the number of South Africans who have returned from abroad since the global financial crisis began in 2008.

Sharp says the South African economy demand for high-skilled workers has remained relatively stable over the past decade and he named a few reasons:

>> There is a consistent shortage of high-skilled workers amounting to around 829 000 unfilled vacancies, i.e. positions that could be easily or immediately filled if only the requisite skills were available;

>>The unemployment rate for high-skilled workers has remained roughly constant at around 0.4% (compared to an unemployment rate of 37% for the workforce as a whole).

>>At the same time, the supply of high-skilled foreign workers has been negligible due to strict immigration measures adopted by the home affairs department in 2002, which were further tightened in 2008 and 2010.

Pool of graduates

This information indicates that the average real wages of high-skilled workers (after-inflation) have increased from R265 680 per annum in 1997 to R423 730 per annum in 2013 – an above-inflation increase of 5.1% per annum. In money-of-the-day (i.e. pre-inflation) terms, wages have increased from R112 966 per annum in 1997 to R423 730 per annum in 2013 – an increase of 11.2% per annum.

“What is notable about this is that there was a relatively uninterrupted period of expansion of high-skilled workers’ wages from 1997 to around 2008. Since the onset of the global financial crisis in 2008, wages of high-skilled South Africans have declined by 23.0% in after-inflation terms,” says Sharp.

This decline is consistent with an increased supply of 359 000 additional workers, namely South Africans returning from work assignments abroad. This is a sizeable number, representing 18% of the total pool of managers and professionals in South Africa and 12% of the total pool of graduates.

adcorp  |  johannesburg  |  labour


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