The latest research findings from Oxford Economics reveal that companies in South Africa face a looming talent crisis despite an ongoing business climate of economic uncertainty.
The worldwide survey was supported by SAP and entitled, “Workforce 2020.” Its findings are based on feedback from executives and employees encompassing C-level, mid-level, and line-of-business managers, as well as front-line employees from a variety of industries. South African businesses are struggling with many of the same issues as organizations in other parts of the world. Executives cite the following top five labor market shifts: millennials entering the workforce (59 percent), the globalization of the labor supply (54 percent), changing work models (43 percent), difficulty recruiting employees with base-level skills (40 percent), and increasing numbers of contingent employees (40 percent). This summary of the findings reveals the numerous gaps that could impact company growth.
Millennials are not as different as we think
Similar to their counterparts worldwide, South African executives may be out of touch with what millennials think. Thirty-eight percent of executives think that millennials are frustrated with manager quality, but only two percent of Millennials say they are. Fifty-three percent of executives think millennials have considered leaving their jobs due to a lack of learning and development, but only 2 percent of millennials say that they have
Companies lag in understanding changing workplace dynamics
Eighty percent of South African companies say they are increasingly using contingent, intermittent, seasonal, or consultant employees. Yet only 27 percent say that this requires changing HR policy. The report also spotlights significant roadblocks to positioning human resources (HR) as a strategic part of the business. For example, just 28 percent of South African companies use quantifiable metrics and benchmarking for workforce development and 38 percent know how to extract meaningful insights from that data. Shani Naidoo, Human Resources Director at The Foschini Group, a South African-based retail clothing company, summed up the chicken-and-egg situation around making a business case for HR investment like this:
“The return on investment in terms of doing learning more dynamically is not obvious yet. The way we want to do that is not obvious yet. So, the board will not provide us with funds for something that’s not clear. It’s always tough to motivate for HR money in any business. And I don’t think our HR strategy has been fully annunciated to allow for a very strong commitment from the board.”
Companies not delivering on what employees really want
Although 53% of South African employees are satisfied or very satisfied with their jobs, companies may not be providing the rewards that matter. The most important benefits and incentives to South African employees are bonuses and merit-based rewards (63%) and competitive compensation (62%). But just 39 percent of organizations say they provide these. This is the kind of chasm that could impact a company’s ability to attract and retain top talent.
Poised at the edge of a leadership cliff
One thing that executives and employees agreed upon was that leadership is lacking – and companies are not focused enough on developing future leaders. Only 40 percent of South African executives say their company plans for succession and continuity in key roles, and just 37 percent report there is talent available in leadership positions to drive global growth. Similarly, 35 percent of employees say leadership at their company is equipped to lead the company to success.
Widening talent gap puts companies’ competitive edge at risk
Based on this report, companies and workers in South Africa are unprepared to take full advantage of advanced technologies. The need for skills such as analytics and cloud-based computing will grow, but few employees expect to gain proficiency in most of these areas – 14 percent of surveyed South African workers expect to be proficient in cloud in three years, and 35 percent expect to be proficient in analytics. Additionally, while 53 percent of South African executives say their company widely offers supplemental training programs to develop new skills, only 30 percent of employees say their company provides the right tools to help them grow and improve job performance.
Connecting HR to the business
Although executives in South Africa may realize they need to manage diverse, mobile, multi-generational employees, this report shows they don’t have the structure, strategy, culture, and resources to do so. The gaps between workforce needs and company capabilities are tremendous. For example, while survey respondents agree on the importance of training and education to organizational growth, companies still need clear metrics to justify investments. Similarly, a significant percentage of companies offer the rewards and compensation that employees actually value. Using evidence-based insights, HR has an unprecedented opportunity to strengthen its strategic role company-wide.
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