South Africa facing a skills crisis

South Africa is facing a growing skills deficit, which threatens any meagre economic growth the country may experience and is pushing businesses to spend more on upskilling current employees. 

This is according to PwC’s South Africa Economic Outlook released this week. 

The report focussed on how South African businesses can respond to the five major crises the country is facing at the moment – economic growth, a growing skills deficit, food insecurity, artificial intelligence, and climate change. 

PwC South Africa’s chief economist Lullu Krugel warned that a lack of skills, particularly “green skills”, threatens the economic future of South Africa. 

Green skills refer to those used in renewable energy generation and the associated technologies. 

According to a report by the International Development Corporation and the Development Bank of Southern Africa, transitioning to renewable energy generation has the potential to create 460,000 jobs in South Africa. 

A lack of skills will prevent the country from realising the true potential of that transition. 

South Africa is unique, according to Krugel, in that it simultaneously has high unemployment and scarce skills. 

This potent combination can seriously handicap economic development and growth over the next few years and even decades, as there is no quick solution. 

“We currently do not have the correct mix of skills available to drive economic growth and reduce unemployment”, Krugel said to eNCA. 

South Africa is falling short in high-tech sectors specifically. Solving such a problem would require tremendous changes to education in the country. 

However, these changes are unlikely to occur, so companies have taken it upon themselves to upskill their employees. 

According to PwC, 79% of South African CEOs are looking to invest in upskilling their workforce to protect jobs and worker compensation. 

Compared to their global counterparts, local CEOs are more cautious in their approach to workforce management as they are more likely to want to protect jobs and worker benefits than global CEOs.

Even with these attempts to protect jobs, 15% of CEOs are considering reducing their workforce, 6% are considering a hiring freeze, and 3% are considering reducing compensation.