South Africa stands to lose scarce skilled resources to other African countries as massive foreign direct investment projects in energy, mining, transport, telecommunications and water supply get underway on the African continent.
“SA is a favoured hunting ground for skills,” says Sandra Burmeister, CEO of Landelahni, Africa partner of the global Amrop executive search group. “Some US$150-billion of projects are planned on the Africa continent over the next three years, and many countries are more attractive than SA in terms of their regulatory environment. Research shows that 75% of investors across the globe believe Africa will become even more attractive as an investment option over the next three years.
“South Africa will need to produce significantly more skilled resources as growing numbers begin working cross-border,” says Burmeister. “The challenge becomes: How can we find and retain talent in South Africa and Africa? The African economy cannot create sustainable economic development, if it has to continually import – and pay a premium for – technical ability from the US, Europe and Asia.”
Africa demand for skills takes place within the context of global skills scarcity, as well as a local shortage of an estimated 800 000 engineers and other qualified professionals and technicians.
“We should be investing in technology and technology research as a continent, since technology underpins economic growth and creates competitive advantage,” says Burmeister. “In addition, we need to find ways of winning back migrant students and professionals. Africa is a resource rich continent, and increasing skills will elevate our potential for downstream, value- adding, wealth-creating opportunities.”
Since 2003, investment in Africa has exceeded that of other emerging countries. Ernst & Young forecasts that new African fixed direct investment (FDI) projects will reach US$150-billion by 2015, creating 350 000 new jobs per annum. The countries which will offer most FDI opportunities include SA, Kenya, Nigeria, Ghana and Angola.
Current projects underway in infrastructure (water, electricity, transport) amount to USD 22-billion. Africa GDP growth is expected to average 5% through to 2015.
“As the communications infrastructure has improved in countries like Kenya and Nigeria, international companies are locating their Africa head offices in these countries so as to be closer to their key markets, frequently drawing an already limited South African scarce skills pool for key positions,” says Burmeister.
Diaspora pool: The effect of the brain drain on Africa is enormous. Globalisation has led to the exodus of an estimated 17-million Nigerians (3,5-million in USA and UK alone). There are currently over 300,000 highly qualified Africans in the diaspora, 30,000 of whom have PhDs, according to UNESCO. More African engineers work in the USA than in the whole of Africa.
The annual amount of remittances received from the Africa diaspora is higher than the total foreign aid it gets annually. “This implies a significant impact on each country’s development,” says Burmeister.
“Africa has relied heavily on expatriates over the past 50 years, and organisations spend $4- billion annually to recruit and pay 100 000 expatriates to work on the continent. However a combination of global shortages and changing regulatory environments on the continent may limit this source in the future. In any event, local companies should consider redirecting some funds to training longer-term local skills rather than importing short-term high-cost expatriates.”
Tertiary education qualifications: Africa suffers from low numbers of adults with tertiary education qualifications. Across sub-Saharan Africa, only 0.38% of adults have a tertiary education compared with a South African average of 0.60%. Kenya leads the continent with 2%, against a global average of 3.94% of adults with tertiary education.
Attrition in Africa universities compounds the problem. The estimated university dropout rate across Africa is estimated at 50%, against 60% for SA, 46% for the US and 16% for the UK. “In SA, the pass rate of engineering students is 12.5%, compared to the international average of 25%,” says Burmeister. “If we can increase the graduation rate, we can increase the supply of skills.”
Female graduates: A recent global survey on women in emerging markets reveals that female enrolment in universities and graduate schools has increased dramatically. According to Burmeister, no data is available across the African continent, but female graduates have quadrupled in SA over the past five years, albeit off a low base. Women make up 65% of college graduates in the UAE, 60% in Brazil, and 47% in China – representing an outstanding way of expanding the talent pool.
Strategies for building the talent pipeline
Sustainable development demands that Africa develop its own skills base. Burmeister believes there is no quick fix solution to meeting the challenge of talent shortages and building a leadership pipeline. “Instead,” she says, “multiple, innovative strategies are required to buy, borrow and build the skills needed in core sectors.
“People from different backgrounds, engaged in debating these issues can lead to groundbreaking solutions. Capturing new and expanding markets requires diversity among the leadership team. In any skills short market, effectively employing all available educated and skilled resources is an obvious choice to make. The business case for diversity is clear, whether gender-based or cultural.
“Forward-thinking companies are systematically bridging the generation gap by creating work experiences that build leadership qualities and test resilience. Their models are custom-designed for the next generation, from building flexible career paths to creating compensation that match their values and work preferences..
“Approaches to filling the talent pipeline include increasing bursary spend in core scarce skills areas of the business, increasing graduate hiring and training programmes, using objective assessment tools to assess potential of existing and prospective employees, using secondments for mentoring programmes, using contractors for short-term projects and implementing smart strategies like cross-functional project teams and offshore assignments for exposure and accelerated training.
“These strategies can assist in generating the skills base required by business in South Africa and Africa is to meet the challenges of a sustainable, expanding economy.”