More than 18 months into the global pandemic one can find hundreds of analyses about how Covid-19 has affected the country’s economy.
By Emma Durkin, head of human capital at Altron Karabina
Most of these focus on specific economic sectors such as tourism, hospitality, corporate real estate, construction and others, with ideas or wish lists for what will be required by both the government and the private sector to help them bounce back to pre-Covid levels and grow.
Amidst this stock-taking, it is vital that we talk about arguably the most important resource in our economy – human capital.
The job market faces a crisis in the form of a talent tsunami and we must arrest it now before it causes too much damage. This is not a uniquely South African phenomenon, but South Africa is hit especially hard because of the existing brain drain.
Let’s start at the beginning. What is the talent tsunami? Globally, we are in the midst of a great resignation wave. One of the biggest reasons is pandemic burnout. In a climate where hundreds of thousands were losing jobs, thousands more taking pay cuts, many people simply grit their teeth and took on even more responsibility with longer working hours in a payoff between job satisfaction and income security.
Beyond this, remote working has left many employees feeling disconnected and unappreciated. Many businesses have struggled to keep the company culture and values alive in a disparate workforce.
As things slowly edge towards a sense of stability, many of these people now feel comfortable enough to start looking elsewhere because as sectors and economies come back online, opportunities abound.
The result is a massive wave of resignations worldwide. The cost for businesses is profound – just consider for a moment not only the resources that go into training a new employee, but couple that with the cost of losing years’ worth of institutional knowledge.
Locally, it is even more challenging. From a South African perspective, foreign offers are especially concerning and a threat to our economy because US or EU-based companies are able to offer dollar or euro-based packages that are especially alluring in a post-pandemic reality where the cost of living has increased.
The pandemic proved that geography is no longer an obstacle, which means that by fishing in the gig economy, foreign entities can offer South Africans the opportunity to deliver on projects in Europe or the US but work from home without having to uproot their families.
While in many instances, the standard of living or the “real remuneration” that people enjoy abroad is quite comparable to what South Africans get in this country – when you take the cost of living abroad into account – the idea of being able to earn in pounds (at roughly 20:1) and spend in rands, is alluring.
Beyond this, the brain drain has been well-documented. Many South Africans, though they may feel a deep sense of patriotism, are actively looking to relocate abroad. Job offers such as these could open a door for potential emigration.
The elephant in the room is money. Let’s be honest – the primary reason people enter into work contracts is to earn money. Companies are also in business to make money.
This is not to suggest that businesses and people don’t have a purpose, as many do. It means that the remuneration for fulfilling this purpose is important – and this is where most South African organisations just cannot compete with international companies, because there’s a line where HR expenses can affect a business’s ability to produce a profit.
South African IT skills are renowned and in demand all around the world and while the country is likely to continue moulding and developing young talented people, there is a very real risk that we won’t be able to plug the gaps indefinitely.
Are South African companies doing enough to keep their bright minds? If they are outbid by foreign firms, what can they do to hold onto their human capital and arrest the talent tsunami?
Many organisations have fantastic employee support programmes and skills and career development opportunities that create an environment where employees feel valued and have a clear growth path. For example, Altron Karabina has a strong focus on employee mental wellness and it would be our responsibility to make this known in the marketplace so that if this is important to someone they know where to find an employer that feels the same.
Companies must invest in building their brand and then make it known widely. This happens through cooperation with marketing but also in how it treats its employees – people talk. There needs to be a mindset shift from throwing a net out into the industry and trying to catch the best talent, to one where the real strengths of a business – which in Altron Karabina’s case would be the approach to people management and mental health, for example – become common knowledge.
Transparency and honesty means that an organisation communicates with its employees – asking them what they want, what they need and where they’d like to be. In an environment where so many have felt overstretched and undervalued, the simple gesture of engagement and responding to needs, goes a long way to becoming an employer of choice.
However, a business chooses to increase its engagement is up to the team involved – but it must be authentic and conducted against a very clear picture of what’s happening in the broader industry and the trends that are either at their height now, or about to take off.
Failure to arrest the talent tsunami could plunge many businesses into crisis, and eventually hurt the economy. There is still very powerful talent in the county, with thousands of bright young people about to enter the workforce.
Wouldn’t it be wonderful if one of the legacies of the pandemic is a workforce that feels appreciated, engaged, involved and well-remunerated in a country and company with real career prospects. This is how we compete with dollars.