Western Cape Business News

Send  Share  RSS  Twitter  10 May 2011

LABOUR: High-Skills In Demand


Recent Western Cape Business News

There are currently as many as 829 800 unfilled positions for high-skilled workers across a wide range of occupations in South Africa.

This is one of the findings of the latest Adcorp Employment Index, a monthly survey conducted by human capital management group, Adcorp.

The Index, reflecting employment in South Africa during April, also shows a negligible increase in jobs of just 1.86%, described by the company’s Labour Economist Loane Sharp as patchy and even.

Unpacking the findings of this month’s Index, Sharp says: “To a great extent, the shortage of highly-skilled workers has been artificially induced by the Immigrations Act (2002), which makes it exceedingly difficult for foreigners to find work in South Africa.

The most recent amendments to the Immigrations Act, promulgated in April 2011, prohibit the use of immigration agents and quota work permits, both of which have historically been widely used by South African companies seeking foreign skills.”

As a result, Adcorp finds, South African citizens’ wages in highly-skilled occupations have been unduly escalated, in inflation-adjusted terms, by a mammoth 286,4% since 2000.

The human capital management group observes: “It seems extraordinary that such an increase could largely have escaped attention, except that the increase would have been in the interests of skilled South African workers at the expense of the economy as a whole.”

Adcorp postulates that the Immigrations Act was intended to improve historically disadvantaged individuals’ domestic employment prospects by “substantially curtailing” foreign job seekers’ attempts to compete for jobs in the local labour market.

If this interpretation is correct, the Immigrations Act should be viewed in the same vein as the Employment Equity Act. As such, it should have been subjected by Nedlac to the same scrutiny that applies to all related legislation,” says Sharp.

Adcorp’s research reveals that the highly-skilled categories suffering the greatest skilled shortages are:

  • senior management;

  • the professions – medicine, engineering, accounting and the law;

  • technical occupations – specialised technicians and artisans; and

  • agriculture.

In terms of actual numbers broken down by occupation, the skills shortage among technicians is 432 100, among managers 216 200 and among professionals 178 400. In sharp contrast, a total of 967 600 elementary workers are in excess of the nation’s needs, as are 247 400 domestic workers.

Adcorp warns that South Africa’s skills shortage poses a significant limitation on the country’s long-term economic growth potential, with viable economic opportunities often rendered thereby unviable.

Many existing activities are, given pervasive skills shortages, conducted inconsistently and, apparently, inexpertly, which is probably a more significant factor in South Africa’s low labour productivity by global standards than is widely thought.”

Adcorp is critical of the uncertainty surrounding the quantum of South Africa’s skills shortage, noting that many governmental skills development initiatives are based on an imprecise idea of the extent of skills shortages, not only in particular occupations, but in the economy as a whole.

It points out that the state’s imprecision extends to the National Skills Fund, which is financed by a 1% payroll tax on all but the country’s smallest employers.

Sector Education and Training Authorities (SETAs) have consistently failed to produce credible estimates of skills shortages in their respective sectors, and probably for this reason the National Skills Fund has failed to disburse more than R3,5 billion in funds available for skills development.”

Adcorp explains why it is in a unique position to add quantitative detail to the skills shortage.

Thus: “As South Africa’s largest employment services company, with more than 98 000 employees distributed throughout the South African economy, and with more than 800 000 job applications processed each year, Adcorp is South Africa’s pre-eminent authority on the job search process.”

The firm maintains that its figures represent the only available estimates of South Africa’s skills shortage.

With regards to the marginal 1,86% increase in employment, the fastest growth was seen in the high-skilled occupations (senior management, professionals, and technicians) and then declining in the low-skilled occupations (elementary and domestic work).”

April had seen an extension of the long-term employment trend whereby the informal sector had grown faster than the formal sector, largely driven by small-scale employers opting out of income taxes and labour regulations.

The informal sector now employed 6,2 million people – 1,5 million (or 31%) more than in 1995.


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