Stephen van Coller, CEO of JSE-listed tech group EOH, is pleading with corporate South Africa to rethink measures to stave off joblessness in the country, as the current levels of high unemployment are not sustainable.
In an interview with ITWeb, Van Coller says the economy needs more relevant skills to push the country’s productivity levels up, and corporate SA has a role to play by expanding career pathway programmes.
There is a growing number of unemployed people in the country. South Africa’s unemployment rate is 35.3%, with 7.9 million people without jobs, according the latest Quarterly Labour Force Survey released last month.
“We can’t have 35% unemployment; it’s just a bad number if you think that one in every three people aren’t working. It’s such a burden on the economy because you have less people paying tax, which means there is less in terms of what government can do,” says Van Coller.
“We need to get our education levels up and give people the right skills to actually improve their lives and get going. I think this is where we need to focus more on as corporate SA. We really have to get our productivity up; this is why we are doing a lot in the unemployed space to try and give ICT skills.”
Coller also cautions that SA is facing a human capital flight in the technology sector, as local talent has become a target of global firms that offer flexible working hours and foreign currency-denominated remuneration.
“This is an issue and it does mean South Africans can sit on the beach in Cape Town and work for US dollars, but the reverse is also true. We can also get skills from Egypt, Nepal, etc, so this working from anywhere has become more normalised.”
Van Coller is the second tech executive in recent weeks to provide a worrisome assessment of the globalisation of skills in the ICT sector.
4Sight CEO Tertius Zitzke also lamented the brain drain of tech skills from SA, and cautioned that attempts by local companies to meet foreign currency earning potential with rand-denominated resources will escalate operating costs, impacting negatively on businesses.
Van Coller tells ITWeb “there is definitely a global skills shortage”, citing cloud, artificial intelligence and application development as areas with skills that are in demand.
He explains: “Every business is trying to digitise their frontend and the backend, so there is a global demand for these skills. We have an internal reskilling and upskilling project to make sure we stay ahead of the developments.”
Cleaning house continues
Meanwhile, Van Coller says the company’s efforts to recover monies syphoned off are on track.
EOH first announced last June that it was suing a number of former executives, including Asher Bohbot, founder and former CEO; the late John King, former CFO; Jehan Mackay, former head of public sector; and Ebrahim Laher, former head of EOH International, for a total of R6.4 billion in damages.
The company lodged a criminal case against the four former executives, in addition to the R6.4 billion claim it filed in court.
“I cannot do much on the criminal case but to let the process take its course. On the civil claim, the process is going through the normal fact-finding process until we get to a point when they need to respond formally.”
Nonetheless, Van Coller says, all-inclusive, EOH is on a good footing, as it continues to undo the legacy issues created by the previous executive.
Last week, the CEO gave an account of the company’s performance in the six months to January, revealing EOH had set aside a R48 million kitty to be paid out when liability arises from investigations into government legacy contracts awarded to it that are associated with impropriety.
Also, in the six months, the group generated an operating profit of R167 million from continuing and discontinued operations, compared to R76 million generated for the six months ended 31 January 2021.
EOH posted headline earnings per share of 41c, a year-on-year improvement of 214%, and also delivered significant improvement in the gross profit, operating profit and EBITDA margin for the 2022 half-year.
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