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Measuring skills shortage

Measuring skills shortage

Used with permission of the author:
Author: Robert Ridout
The Ridout Group
23 May 2007

South Africa, now a global participant in the war on talent shortages, also finds itself as a fertile ground for talent prospecting. International recruiters armed with promising and well organised crime free opportunities overseas, target our top talent with precision .

Television, radio and newspapers have been airing comments and publishing articles on skills shortages almost as if this phenomenon has occurred out of the blue.  

But what is the reality of the situation? How many vacancies exist within the borders of South Africa? How many unemployed graduates walk our streets? What are the trends across industry sectors regarding the skills shortage? Which specific skills are required from our universities and are we training enough graduates to fill the void in these sectors? These are crucial questions that local and international companies as well as job seekers are faced with each day.

The Department of Trade and Industry (DTI) and Statistics South Africa have information that clearly proves the problem exists. Most sectors have experienced between 2.5% to 5% growth in the last quarter with regards to employment, whilst Stats SA tells us approximately four million graduates currently walk our streets in search of vacancies. The brain-drain continues unabated even though government puts in measures to convince graduates and skilled individuals to remain on our shores. Information on vacancies in the marketplace remains unchecked.

We called a local television program to establish from where they had received a figure of one million job vacancies in South Africa after seeing the information on a news crawler. It turns out that this information was sourced from a prominent news website. The website in turn told us they had no source whatsoever.  

Would you as an international investor put money into a country that struggles to understand and measure its own skills shortage?

Most recruiters will tell you that a skills shortage has existed for many years. Of course these warnings are dismissed as sales talk in order to encourage companies to hire externally. The truth is simple, the skills shortage is here to stay.  As an international phenomenon South Africa will need to ensure that we start participating in this very competitive arena. The starting point is to understand the trends and to start creating suitable measurement criteria. 

To understand this problem, the different functions of the skills shortage need to be identified, analysed and understood. The starting point for this debate is looking at the talent that enters the market place and contrasting that figure, as the statistics point out, to the current level of unemployment.  

The fact that there is a positive correlation between the increase in employment and an increase in unemployed graduates, remains puzzling to the most astute economists.  

We contacted several of the top universities to establish how they prepare their graduates for entry into the market and how they market graduates to potential companies. Most universities questioned have impressive programmes, however these courses were all non-credit bearing voluntary courses. Universities were quick to point out  that students needed to be more proactive in attending them.

At the other end of the spectrum recruiters interviewing graduates on a daily basis quickly find that most graduates do not even have a strategy for finding work and that the graduates struggle to sell their own potential to top recruiters and companies at interviews.

Surely the education institutions need to seal the deal to ensure their students acquire top jobs or at least have realistic expectations of what to expect in the market place. Perhaps the success of the education institutions needs to be measured less upon graduates’ distinctions and more on the amount of graduates that find a home in a successful career after graduation.

Students also need to play a part realising that a degree is not going to ensure immediate employment. They also need to understand that the market has complexities such as affirmative action as well as an unequal distribution of job demandthat remain unique to the South African labour market.

But what about the current skilled individuals that populate the job market? This brings us to the second element in the skills shortage question. Every industry sector has its own set of unique challenges. There is the phenomenon of job hopping where pockets of skilled individuals move from company to company to increase their salary (taking advantage of an upward spiral in demand for specialist positions), and in total contrast masses of skilled candidates who cannot find work in their specialist professions.

One solution to the skills shortage would be to emulate how foreign countries deal with the problem. They encourage the movement of skills across industry sectors, ensuring a versatile supply of labour. It is disappointing that jobseekers who market their CV’s with strong transferable skills seem to be ignored by hiring companies opting to recruit the quick employment solution – the ideal fit.

The “ideal fit” refer in recruitment terms to the perfect technical or corporate fit or a combination of both. South African companies within industry sectors remain focused on employing the “ideal fit” from competitors in the same industry sector. This type of candidate is required to start by hitting the ground running, without major time wasted on training or mentorship.

Companies today brief their recruiters on specifications that will require months of talent sifting just to ensure this ideal fit is found - time that could have been used to train and mentor a candidate with good transferable skills from a parallel industry.

In contrast, international companies attach significant value to hiring potentially trainable talent rather than a perfect fit. Universities in Europe reward students with university points for working in foreign companies.

Few people realise how serious this problem is. Certain specialist skilled individuals in South Africa such as clothing buyers will receive calls from headhunters on a daily basis. Surely continuing to poach from a pool of talent with limited numbers only serves to increase the problem in the long run.

Companies need to understand that these specialist skills will ultimately require replenishment from outside the pool of specialist skills in their respective competitor base.  

Besides from an international pool, hiring talent from parallel industry sectors with strong transferable skills remains a very viable option.

Hiring managers and Human Resource practitioners need to become more opportunistic when spotting talent, especially when looking outside of their specific industry sectors. Business leaders need to be warned of the pitfalls associated with continuing to hire staff from competitors and increasing salaries accordingly.

Recruiters are not exempt from this problem. Maybe companies would hire talent from parallel industry sectors if the shortlists that recruiters presented had higher quality candidates from parallel industries - candidates with relevant transferable skills. Either way Human Resource managers in certain industry sectors will need to start becoming much more open-minded when hiring none-industry specific talent.

This will certainly go some way to solving the imbalance that exists within the labour market across industry sectors.

The challenges that large and small companies face when managing this skills shortage problem are very different. Larger companies are in the fortunate position to buy their talent using expensive sourcing techniques and consultants to attract talent. Small businesses require more innovative techniques focusing on spotting rising talent, with the emphasis being on the retention of that talent. The gap however is starting to narrow with business leaders in blue chip companies realising that their pool of top talent requires constant attention. Small businesses are also starting to offer equity to ensure long term sustainability within their talent pools.

Information is vital - how can we predict fluctuations in the skills market if we have no information on past trends? Companies now more than ever before require information to make decisions on their recruitment strategies. 

The information seems to be amiss. None of the statistics of the spreadsheets we received on this important topic proved viable. Nor do any of the stakeholders consolidate this information in any informative manner for businesses to predict trends. The question needs to answered, how do students know which courses to choose and how do education institutions know what courses to offer to satisfy future labour demands?  Surely we need to provide our graduates with a running start when launching them into the market, especially in a market that is as unforgivable as ours.

Business and government need to start assessing these statistics to ensure that companies investing in South Africa are confident enough to invest, knowing that not only does infrastructure exist but so does talent.

Understanding where industry sector shortages occur will assist business to manage their recruitment strategy in a more proactive manner.

The government needs to address the fact that industry sectors that require mass skills infusion will need to be addressed from international market places in the short term, and rather than looking overseas, we need to first form partnerships with the rest of the African continent.

Where do we start? APSO (the Association of Personnel Service Organisations of South Africa)  the association that manages the recruitment industry, does not keep any statistics on vacancies at present even though their membership base includes the majority of recruitment companies in South Africa .

Most recruitment companies keep information on vacancies at hand. Surely this should be the starting point to measure vacancies and even employment that exist in the market place. One of the stakeholders will also need to step forward to consolidate this information because in its current format it does not provide clues to any future trends.

South Africa has a completely unique set of rules regarding the skills problem and therefore the participants need to establish unique measurement techniques to assist all stakeholders in solving this problem. Companies need to understand that the skills shortage challenge is here to stay and requires a competitive and proactive strategy.

Teamwork between all the stakeholders is the only solution as we all stand to benefit in the long run from solving the problem.

Born in Cape Town 1972, Robert Ridout began his recruitment career in the fast paced medical recruitment industry in London after studying a diploma in Marketing Management. After returning to South Africa, Robert joined Don Gray in Cape Town as search consultant. Thereafter Renwick International approached him to start a Search Business called Speedsearch and after relocating to Johannesburg Robert grew the business to a competitive force in Johannesburg.  Whilst with Renwick, Robert was involved on various projects in web recruitment and recruitment software. Robert then joined Paracon and managed a team of project mangers before returning toCape Town to start a search business for the Laser Group. In 2001 Robert finally decided to start Ridout and Associates, his own search consultancy. Working from home the business grew into offices in Claremont to eventually open its doors in Johannesburg in 2005. With over twenty staff strong at the moment Robert continues to lead the business as CEO with his capable team of executives. Robert has dedicated his career to the advancement of Search inSouth Africa promoting this specialist form of recruitment as the preferred form of talent acquisition. The Ridout Group is testament to the passion that he has for his trade. Robert Ridout can be contacted at www.ridout.co.za or 011 465 2800.


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