The Coming Skills Gap

The world of work is changing fast. Remember when mastering Microsoft Excel made you the office tech guru? Today, your primary school nephew is coding games on Scratch. In South Africa, this rapid skill evolution is creating a serious challenge for businesses: a widening skills gap that threatens growth in our already tough economy.

What’s Actually Happening

The skills landscape in South Africa is shifting rapidly due to:

• Automation: From robotics in mining to AI in financial services, jobs are changing.
• Digital transformation: Workers must adapt to new tools, like cloud-based systems or data analytics platforms.
• Obsolete knowledge: Specialized skills, like legacy coding languages, lose value quickly.
• Soft skills demand: Critical thinking, adaptability, and collaboration are now non-negotiable.

South Africa faces unique challenges: an education system struggling to produce work-ready graduates, brain drain to countries like the UK and Australia, and rapid industry shifts in cities like Johannesburg and Cape Town.

Why Traditional Approaches Are Failing

Old-school “hire and fire” tactics don’t work in South Africa:

• B-BBEE compliance: Hiring must align with transformation goals, adding complexity.
• Graduate readiness: Universities often produce graduates lacking practical skills, with 2023 data from the Department of Higher Education showing only 40% of graduates are employed within a year.
• Talent scarcity: Critical roles, like data scientists or engineers, stay vacant for months.
• Small talent pool: Businesses in Gauteng, KwaZulu-Natal, and the Western Cape compete for the same professionals.

Relying on external hiring fuels a costly talent war, made worse by rand volatility and economic pressures like load-shedding.

The Practical Strategy: Building a Future-Proof Workforce

Smart South African companies are focusing on talent development over acquisition:

1. Skills mapping
   Identify what skills your team has, what you’ll need, and the gaps. Discovery’s skills matrices for actuaries and IT roles are a great example.
2. Continuous learning
   Move beyond one-off workshops. MTN’s Digital Skills Academy offers ongoing tech training for employees.
3. Learnerships and apprenticeships
   Use SETA funding and tax breaks to train young talent. Shoprite’s Retail Academy has trained thousands of entry-level workers.
4. Upskilling and reskilling
   Amazon is investing $700 million (R13.5B) to retrain a third of its workforce. They’re not doing this for PR – they’ve calculated it’s cheaper than hiring.
5. Learning ecosystems
   Replace isolated training events with interconnected learning resources that employees can access at the point of need.

The Hidden Competitive Advantage

Building skills internally gives businesses an edge:

• Knowledge retention: Homegrown talent preserves company know-how, crucial when employees are lured overseas.
• B-BBEE progress: Internal development boosts transformation scores, unlike external hires.
• Reduced recruitment costs: Avoiding head-hunter fees (15-20% of salaries) makes financial sense.
• Employee loyalty: Vodacom’s data shows employees with development opportunities are 3.5 times less likely to leave.

The Bottom Line

The skills gap isn’t a temporary inconvenience – it’s the new normal in a world where change is constant and accelerating. Businesses that treat talent development as a strategic priority rather than an HR function will build sustainable competitive advantage.

The most successful companies are shifting from “hiring the right people” to “developing the right capabilities” – creating internal skill factories rather than depending on increasingly unreliable external talent markets.

Remember: In a world where technology and markets change continuously, the ability to develop new capabilities quickly becomes more important than the capabilities you currently possess.

Till next time🫡
Mpho