South Africa’s unemployment rate in the first quarter of 2023 was recorded at 32.9%, according to Statista, which is among the highest in the world. Even more disturbing is that youth unemployment in the 15 to 24 age category was revealed to be a staggering 60.7% in the second quarter of 2023. The 25 to 34 age group is stated to have 39.8% unemployment for the same period.
Despite this, businesses struggle to acquire people with the necessary technical skills to function in any sector, specifically in the specialised field of telecoms.
The 2021 ICT JCSE-IITPSA Skills Survey found nearly 10 000 hard-to-fill positions in the South African ICT sector, noting there are just not enough technical skills in the country to satisfy business demand. In 2022, it was reported that increasingly, South African firms were plugging the skills gap through overseas recruitment.
All businesses in SA grapple with the significant challenge of recruiting staff with basic technical (not even N6 or diploma-level) skills. Why is that?
The education landscape
In 2002, the Department of Education published a document entitled “Transformation and Restructuring: A New Institutional Landscape for Higher Education” which outlined the intended rationalisation of the sector.
The clustering recommended in the report reduced the number of higher education institutions in South Africa from 36 to 23. Thus, the further education landscape in South Africa altered dramatically: 21 universities became 11 institutions, 15 technikons became five “standalone” technikons and six comprehensive institutions (combinations of universities and technikons). 150 technical colleges became 50 merged technical colleges, and 120 colleges of education eventually became only two colleges of education, with the rest either incorporated into universities or technikons.
Thus, 306 separate institutions for post-school education were radically reduced to 72 remaining institutions. The closure of these technical facilities, coupled with a general decline in the quality of school graduates, has placed the burden on employers to invest heavily in training and upskilling workforces.
It has also seriously impacted the availability of basic skilled labour. Historically, parastatal entities, such as Telkom, SA Railways, SAA and Eskom − to name just some − served as incubators for technical skills development, equipping students with the expertise required for specialised roles in various industries.
Graduates entering the workforce often lack the necessary skills and practical experience, necessitating significant investment by employers.
But even more, they provided a solid foundation of technical expertise that enabled apprentices to seek employment and growth opportunities in a multitude of industries. However, budget constraints, lack of investment, outsourcing and a shift in educational priorities have contributed to their decline.
Additionally, technical high schools in South Africa are not as prevalent as they were previously, to put it mildly. Moreover, the merging of technical colleges/technikons, with the subsequent loss of identity and a decrease in the quality of the training, poured fuel on the skills shortage fire.
Unfortunately, the model where so-called ‘technical colleges’ provide book knowledge with little or no practical skills whatsoever on offer means the students they turn out are incapable of functioning in the field even at the most basic level.
It should be noted there are some excellent private technical institutions doing a sterling job of training candidates, both practically and theoretically, in various disciplines but alas far too few for SA to tackle the technical skills shortfall. These private facilities are where we target our recruitment drives in the absence of a viable alternative.
Stretching business resources even further
The factors I outlined have contributed to the significant shortage of qualified candidates for technical positions. To add to this, graduates entering the workforce often lack the necessary skills and practical experience, necessitating significant investment by employers in training and upskilling initiatives.
This places a considerable burden on businesses, requiring them to allocate additional resources and time to bridge the skills gap.
Moreover, there can be a health and safety (H&S) spinoff with such personnel, as they are more prone to making mistakes that jeopardise these standards in a world where businesses are required to expend significant budget on H&S training, if they are to be compliant. For example, the mining and industrial arena in this country.
Organisations getting new recruits to work in these sectors will acknowledge it takes at least six to 12 weeks to get them up to speed due to the requirement for medical assessments, inductions, H&S training and more.
This is a point to raise the issue of the skills development levy on businesses. The purpose of the Skills Development Levies Act is defined as regulating a compulsory levy scheme to fund education and training in businesses within various sectors in South Africa.
The aim of the Act is said to be to expand the knowledge and competencies of the labour force, and in so doing, increase the supply of skilled labour in South Africa, providing for greater productivity and employability.
Despite the above, private sector businesses are now expected to employ technical apprentices and train them in the field, which is very challenging, with many production-driven companies finding this virtually impossible. Few businesses can afford the time and money necessary to train under-qualified or unqualified technical applicants.
Challenging labour laws and shifting black economic empowerment (BEE) goalposts are compounding issues for entrepreneurial enterprises in SA. Companies face specific targets in nominated demographic groups, which must be met within set timelines, or they face draconian penalties.
BEE goals have been further amended, making it more challenging for businesses to comply. Certainly, it’s arguable that the shift in employment equity policy and BEE rules will negatively impact those they are purported to have been developed to help.
The introduction of substantial fines, compounded by compliance costs, are high enough to drive smaller firms out of operation, resulting in job losses, greater unemployment and deterring entrepreneurship and investment.
In my next article, I will further expand on the skills challenges facing businesses in the telecoms sector and examine potential initiatives that can be undertaken to redress the skills gap.