South Africa’s critical skills shortage

Adcorp, the labour market specialist, says that the South African economy shed 36,290 jobs during January, with the biggest losses occurred in permanent employment.
Adcorp noted that in the face of significant job losses in January, highly skilled professions stood out as being the only sector in which new jobs were created.
However, Loane Sharp, labour market economist at Adcorp, said that these vacancies cannot be filled owing to a critical skills shortage in South Africa.

“The economy shed 36,290 jobs during January. The biggest losses occurred in permanent work, which lost 22,224 jobs during the month, and temporary work, which lost 3,168 jobs during the month,” says Sharp.

Although all economic sectors shed jobs, the most significant job losses were observed in manufacturing (-4.7%) and construction (-9.9%).

“Only high-skilled jobs were created during the month, being professionals up 4.7% and management up by 2.1%,” Sharp said. “While this should be good news for the economy, this demand in the private sector has been met with a marked skills shortage.”

The labour expert attributed South Africa’s skills shortage to emigration of high-skilled workers, immigration restrictions for high-skilled foreigners and a dysfunctional education system.

At present, there are an estimated 470,000 vacancies in the private sector which are positions that could be filled almost immediately if the skills were available, Adcorp said.

More than half (52%) of these positions are in management, and the remainder (37%) are largely professional positions in accounting, law, medicine, engineering and finance.

However, Sharp said: “South Africa simultaneously possesses a surplus of unemployed graduates. At present, there are an estimated 344,000 unemployed people with degrees, diplomas and certificates.”

“Although a tertiary qualification remains the most successful indicator of finding employment (90% of graduates are employed), the remainder fail to find employment because their qualifications do not match those sought by employers.”

Sharp pointed out that tertiary institutions continue to produce arts, humanities, social science and mid-level professional graduates (i.e. teachers and nurses), whereas employers seek managers and high-level professional graduates (i.e. accountants, lawyers, doctors and engineers).

According to Sharp, South Africa ranks consistently poorly – not only in terms of maths and science scores, but of education scores generally.

“Until the government can curb wasteful public expenditure in education, loosen the teaching unions’ stranglehold over the education system, and reform its poorly functioning industry training bodies, South Africa’s skills shortage is likely to grow,” the analyst said.

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South Africa’s critical skills shortage