JOHANNESBURG, South Africa — March 8, 2023 — SAP Africa today released a new report ‘Africa’s Tech Skills Scarcity Revealed‘ which seeks to unveil the specific challenges and opportunities for African organisations seeking greater tech skills availability.
Cathy Smith, Managing Director at SAP Africa, says there is an urgent need to invest in skills development and training to ensure Africa can capitalise on its youth dividend. “More than half of the world’s population growth between now and 2050 will take place in Africa, where 1.3-billion people are expected to be born by mid-century. With the correct investment in skills development, Africa’s economy could transition away from its reliance on natural resources to build the world’s future tech workforce, bringing untold economic and social benefit to the continent and its citizens. However, as our research reveals, African organisations still face some difficulties with attracting, retaining and upskilling suitably skilled tech workers.”
The research was conducted among organisations in Kenya, Nigeria and South Africa in the fourth quarter of 2022.
Negative impact due to lack of tech skills
The ‘Africa’s Tech Skills Scarcity Revealed‘ report found that a lack of skills is having a negative effect on the continent’s digital transformation efforts.
Four in five organisations surveyed reported some negative effect from a lack of tech skills, with 41% reporting that employees are leaving due to the pressures they experience as a result of understaffing. Other consequences include not being able to meet client needs (reported by 46%), reduced capacity for innovation (53%), and losing customers to competitors (60%).
Nearly all organisations expected to experience a tech skills -related challenge in 2023. More than two-thirds (69%) also said they expect to experience a skills gap in the year ahead. According to the data, the top skills challenge for African organisations is attracting skilled new recruits, although in South Africa the retention of skilled employees narrowly edged out attracting skills as the top challenge.
Co-creating a new world of work
In response to the ongoing tech skills challenges, organisations are taking bold steps to ensure they have access to the correct tech skills. Forty-one percent said that upskilling of existing employees would be a top priority in 2023, while 40% said the same about reskilling employees.
“Companies are also adopting technology tools and flexible work practices to ensure they can attract, retain and mobilise the correct mix of tech skills,” says Smith. “Seven in ten organisations currently use a human capital management or employee experience tool, while nearly half (45%) of companies were open to remote work, although most want employees to be in the office at least some of the time. This new workplace dynamic will require leaders to co-create new models for work, with constant collaboration with employees to ensure alignment with company objectives and culture.”
The ‘Africa’s Tech Skills Scarcity Revealed‘ report further found that the most in-demand skills include cybersecurity and data analytics (63%), developer and industry skills (49%), and digital transformation skills (48%). More than two-thirds (69%) cited technical skills as an important attribute when recruiting, while 66% said industry-specific skills were important to them.
Change management gap persists
The change management skills so essential to successful digital transformation were not highly prized among the companies surveyed, revealing an opportunity for smarter investment in specific skills to improve the outcomes of initiatives. Only 18% of companies cited change management as an in-demand skill.
“Studies have shown that fewer than a third of digital transformation projects succeed, partly due to the fact that only 34% of change management projects are clear successes,” says Smith. “For a continent that is rapidly transforming through the accelerated adoption of digital technologies, ensuring effective change management could greatly improve outcomes and equip organisations with new capabilities to drive growth and innovation.”
Other key findings from the report include:
- Kenyan organisations are more upbeat about their skills prospects than Nigerian or South African organisations:
Only 53% of Kenyan organisations expect to experience a skills gap in the next year, compared to 80% of Nigerian companies and 73% of South African organisations.
- Kenyan organisations are more likely to expect employees to work in the office all the time:
37% of Kenyan organisations want employees in-office full-time, compared to 23% of organisations in Nigeria and only 13% of South African ones.
- The top tech skills challenge for African organisations is attracting sufficiently-skilled new recruits, except in South Africa:
Organisations in Kenya and Nigeria cite attracting skilled new recruits as their top tech skills challenge in 2023, but in South Africa the top challenge is retaining skilled tech workers.
South African organisations place a greater premium on digital transformation skills:
Digital transformation skills were cited by 70% of South African companies as an in-demand skill, compared to only 33% of organisations in Kenya and Nigeria.
- Nigerian companies are experiencing the impact of a lack of tech skills to a greater extent:
All Nigerian companies surveyed said they’d suffered a negative impact due to a lack of tech skills, compared to 60% in Kenya and 78% in South Africa.
SAP’s ‘Africa’s Tech Skills Scarcity Revealed’ report is now available to assist African organisations with understanding the current state of tech skills challenges. For more information and to access the full report, please visit Market Research Project: Africa’s Tech Skills Scarcity Revealed.