South Africa is facing severe lack of critical skills in this sector
South Africa is facing a continued shortage of critical skills, says listed workforce solutions company, Adcorp – with not enough supply in the information technology sector to meet the demand from businesses.
The group reported its interim results for the six months ended 31 August 2022 on Monday (31 October), highlighting a significant recovery in its operations from the prior period, which was still heavily impacted by the Covid-19 pandemic and lockdown.
Adcorp offers recruitment and staffing services across various sectors in South Africa and Australia. Its operations are split into 15 different divisions to handle each sector. In addition, it offers industrial and professional staffing solutions, as well as training.
Revenue from continuing operations increased by 3.2% to R5.9 billion (2021: R5.7 billion), while gross profit from continuing operations increased by 6.3% to R626.8 million (2021: R589.6 million).
Operating profit from continuing operations decreased marginally by 0.3% to R69.2 million. Headline earnings per share from continuing operations decreased to 24.6 cents per share (2021: 25.7 cents per share). The group declared an interim dividend of 12.2 cents per share after offering no dividend in the prior period.
The group said that its overall results were reflective of its strategy shift bearing fruit but were negatively impacted by losses in Australia.
Skills shortages
In its full-year results for 2022, Adcorp noted that it was forced to change its skills positioning to meet a changing market. For example, the group’s engineering, construction and energy brand, Cynergy, has since been repositioned to serve the emerging renewable energy sector.
In the latest results, the overall performance of its contingent staffing business was solid, as the considerable revenue losses experienced by Cynergy were progressively replaced with new business in the division, it said.
However, some sectors had their own issues. The BLU division – which handles staffing across all industries and sectors – saw growth in demand for skills in the first quarter of the year, but this dropped in the second quarter as GDP declined.
Charisma – which handled recruitment in the medical sector – showed a sharp decline as hours worked were significantly lower than the comparative period during a Covid-19 peak.
Paracon, the group’s IT professional brand, continued to suffer from a lack of resource supply affecting the group’s ability to meet demand, echoing Adcorp’s warnings six months ago about a critical shortage if skills in the field.
Warnings over a lack of IT skills in South Africa have been coming from all sides of the recruitment process.
Professional services company Accenture warned earlier in October that South Africa was fast running out of time to address the shortage of IT skills in the country and had as little as 12 months to bridge the gap.
This is because the skills are not only in demand locally but internationally as well. And with the reshaping of how the working world recruits – with remote work increasingly becoming an option – local companies are competing with international companies for a limited pool of skills.
Financial service provider Absa Group, like many other big banks in the country, has pointed to a skills shortage in the tech industry at a time of advanced digital migration.
A survey run by PwC, meanwhile, showed that employees themselves are demanding more skills development in the IT space – including enhancing technical skills and knowledge in automation, programming and coding, modelling and data analysis – so they have a better chance at surviving in a post-Covid world.
The comprehensive 2021 JCSE-IITPSA ICT Skills Survey found that the top priority skills listed by employers were:
- Cyber security;
- Big data analytics;
- DevOps;
- Artificial intelligence;
- Application development;
- Data management;
- Test automation/performance testing;
- Internet of things; and
- Connectivity.
One skill that keeps topping the list of jobs in the tech field is data scientist.
Data science skills are in high demand not only in the technology sector but also in other sectors such as media and entertainment, financial services, and professional services, said Absa.
“Technologies such as artificial intelligence and machine learning are changing the very nature of jobs, as well as the skills required to perform them at an increasing rate,” the bank said.
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