South Africa’s matric class of 2019 has achieved impressive results, but may struggle to find work as the country faces constrained employment in 2020.
John Botha, chief operation officer at Global Business Solutions, said that this is highlighted by the country’s current growth level. Using a labour elasticity formula he noted that for each 1% growth in the GDP there is a corresponding 0.7% growth in employment.
“With a forecast 1.5% growth in 2020 along with accelerating technological disruption, the best-case scenario is that there may be around 100,000 new jobs created,” he said.
“This is a major challenge given that more than 500,000 grade 12s left the secondary schooling system in 2019.”
South Africa’s unemployment rate climbed to 29.1% in the third quarter of 2019 – its highest rate in over 16 years, while the real unemployment rate is closer to 40%.
Botha’s comments align with data from the Manpower Group’s Employment Outlook survey which shows that South Africa’s employment prospects for Q1 of 2020 are the worst they have been in five years.
Majority (81%) of employers said that they do not see any growth in employment over the period, while 8% said they are contemplating a decrease in employment.
“As we move into the new year, the South African economy continues to be affected by subdued economic growth and a sluggish growth outlook,” said Lyndy van den Barselaar, managing director of ManpowerGroup SA.
“Policy uncertainty and a high unemployment rate remain a deep concern for local businesses who are looking to the new year with caution when it comes to their spending and hiring strategies.”
Dalein van Zyl, CEO of IMM Graduate School, added that it is particularly difficult for young South Africans to find jobs right now.
Citing data from Statistics South Africa (Stats SA), van Zyl said that youth’s (15 to 24) are far less likely to find a job or to be absorbed in the job market than those that are older.
“There is a general belief that total lack of experience counts against them and firms would rather employ older people who have more work experience.
“It is therefore not surprising that the youth unemployment rate in South Africa rose significantly to 58.2 percent in the third quarter of 2019, reaching its highest level since the first quarter of 2008.”