2010 concerns highlight South Africa's need for skills solution

Reproduced with permission of Professor Frank Horwitz and the GSB UCT 
Author: Professor Frank Horwitz, GSB UCT
Copyright © GSB UCT 2007
Graduate School of Business, University of Cape Town (GSB UCT)
22 November 2007

There has been concern from some local and international quarters that South Africa’s major infrastructural projects may not be completed in time for the 2010 World Cup. 

These concerns stem in part from the much publicised skills shortages and lack of capacity to implement plans that have become commonplace to South Africans in recent years.

South Africa is adversely affected by a shortage of intermediate and certain high level skills – levels consisting of groups such as artisans, technicians, and technical operatives. The result of our skills shortages could cost the country an estimated 1% of GDP, not to mention placing key business and government service delivery strategies at risk of failure.

Dealing with these issues is no easy task, but it is essential that we get the solution right if we hope to be able to achieve key objectives, not only with regards to the 2010 World Cup, but also in achieving a targeted 5 % plus economic growth. 

Understanding the nature of the skills shortage can only occur if we look closely at the range of factors that would form part of such a solution, starting from the ground up – and including the graduate output in key priority skills areas from institutions of higher learning as well as technical and artisan training.

A start would be to take a more thorough look at the extent to which the shortage is due to insufficient output of graduates and technicians from our institutions of higher learning and whether these numbers would be effectively increased by raising the actual outputs of graduates by qualitative improvements in the throughput of students needed in priority skill areas such as engineering and business management.

It over-simplifies the issue to argue that universities need to radically increase their intakes on the assumption that after four of five years the outputs will match this increase.

Rather a stronger focus on the quality of the educational process, improved teaching and learning, and student support may well have a more productive impact on both the quantity and quality of graduates produced by institutions of higher learning.

Another big issue in the skills debate is the employability of graduates.

Modern-day organisations require people who not only have technical and functional skills but also life skills, emotional intelligence (EQ), the ability to adapt to rapidly changing environments, leadership and interpersonal skills.

Crucially young graduates have to be able to engage with diversity and complexity which vocational qualifications are often unable to provide due to other pressing curriculum priorities and not enough time in the programme design.

It may be time for our institutions of higher learning to add to the curriculum these kinds of courses in a range of sectors, not only in humanities and social sciences faculties - where they do provide sound education in critical and independent thinking.

A third area of importance is to closely examine the causes of our high turnover of high-level and intermediate-level skills in organisations, which is being exacerbated by the brain drain from the country. This is a retention rather than a recruitment issue. Retention strategies are equally important as improving the supply side production of graduates, technicians, artisans, and health care professionals.

The retention of skills is particularly critical in certain sectors where the demand for particular skills is more insistent. For example, over R375 billion is planned for infrastructure development over the next few years, placing an emphasis on the need to retain intermediate-level skills, such as artisans and technicians.

South African businesses are called on in particular to look at fresh ways to attract, motivate and retain human capital – especially intellectual capital.

A key facet of this will be differentiation – a unique Human Resources value proposition and employer brand which makes a company both different and more competitive than other firms in its industry. 

The real challenge is to create an employer brand where the labour market will perceive the organisation as an employer of choice. It will therefore be seen to be offering something different that can’t easily be replicated by competitors. In South Africa workplace culture, growth opportunities, flexible employment practices, valuing diversity, reward systems, employment equity, and broad based black economic empowerment are all means to developing this unique value proposition. Allied to this is the notion of talent management, which enables staff to develop within the organisation. 

By creating a unique value proposition and managing talent well, companies will then be in a better position to manage their valuable knowledge and enhance their capacity to execute strategies.

In addition, companies should be taking greater advantage of the incentives offered to them to train and develop people internally, such as the skills levy/grant system – less than 20% of businesses are using the system at present. 

The private sector should also work to build closer working relationships/partnerships with education institutions of higher learning and the Department of Labour. We need to address skills which are needed by key sectors – a social partnership in skills development between government and business is sorely needed and may hopefully have begun through ASGISA and JIPSA. 

This has become a national imperative, which government realises, but which requires a more integrated and co-ordinated planning process as South Africa steps up its planning for 2010 and beyond. 

Ultimately, such an investment in human capital by both the state and private sector can only yield a positive return and sustainable economic growth.

Frank M Horwitz is Professor of Business Administration and Director of the Graduate School of Business (GSB) University of Cape Town. He specialises in human resources management, organisation change and industrial relations. The areas of his expertise include high-performance work practices; Industrial Relations; employment discrimination and diversity; mergers and acquisitions; strategic human resource management; workplace flexibility and organisational restructuring. He has been visiting Professor at the Rotterdam School of Management (RSM) Erasmus University in Holland, Nanyang Business School in Singapore (2001-2002), the Faculty of Management, at the University of Calgary, Canada, and research associate of the Industrial Relations Centre, Griffith University, Brisbane, Australia. He is a former Faculty member of Wits Business School, University of the Witwatersrand. He has some ten years executive experience in these fields with ICI in England and AECI. He has acted as a consultant in organisational change and human capital strategies for companies in Canada, Namibia and South Africa. He has consulted to the governments of Namibia,  Singapore and South Africa. Frank Horwitz was in 2000, Chair of the Commission investigating the effects of sub-contracting on the collective bargaining system in the building industry. He was on the national Council of the Industrial Relations Association (IRASA). He was a (part-time) commissioner on the Commission for Conciliation, Mediation and Arbitration (CCMA), and on Clothing Industry Bargaining Council Dispute Resolution Panel. He is active in community service organisations. Among these, he has served on the executive committee of the South African Institute of Race Relations. He is a past executive committee member and national treasurer of the South African Association for Conflict Intervention (SAACI). He is a regular contributor on radio including Cape Talk radio and SAFM has written for business newspapers such as Business Day and the Financial Times and has appeared on television. He can be contacted at fhorwitz@gsb.uct.ac.za and 021 406 1418 / 9 and runs the short course Building Strategic Readiness through People. Email abrahams@gsb.uct.ac.za for details.

Short summary
Strategic planning and execution in various aspects of the employment cycle would address concerns for South Africa's readiness for the 2010 Soccer World Cup.

Keywords and relevant phrases
attract, brain drain, brand, broad based black economic empowerment, business management, capacity, change management, competition, complexity, corporate culture, critical thinking, development, differentiation, diversity, economic growth, education, emotional intelligence, employability, employment equity,  engineering, EQ, factors, flexibility, functional skills, GDP, goals, graduate output, grants, HR value, human capital, independent thinking, infrastructure, intellectual capital, interpersonal skills, key objectives, knowledge management, motivation, leadership, learning, objectives, planning, project management, recruitment, remuneration, retention, rewards, service delivery, skills levy, skills shortage, strategic management, talent management, technical skills, training, turnover, value, workplace culture,