South African companies are engaged in a war for talent and skilled workers as local professionals are emigrating or are dissatisfied with their jobs.
This is feedback from JSE-listed companies such as Coronation, Momentum Metropolitan, and WBHO, as well as the ‘Big Four’ audit firms of Deloitte, EY, PwC, and KPMG.
Coronation CEO Anton Pillay said one of the significant headwinds facing the asset management industry in the country is a lack of skilled workers.
In the company’s annual report released at the end of December, Pillay said that Coronation is currently engaged in a “talent war” with other financial services providers.
Chairperson of Coronation, Alexandra Watson, echoed Pillay’s concerns. She was specifically concerned about a “skills exodus” from South Africa due to the country’s stagnant economy and better opportunities elsewhere.
In its annual report, Momentum Metropolitan warned that employing more people with the requisite skills is increasingly difficult, putting it at risk of failing to achieve transformation targets.
“Sout Africa is facing an acute critical skills crisis, especially African, coloured and Indian skills, due to increased local and international competition and emigration,” the company said.
“We face the risk of skills shortages, particularly in critical skills such as actuarial, IT and technical talent. This has amplified in the evolving working environment.”
Talent retention, burnout and fatigue are all concerns, especially in specialist areas, and talent attraction remains challenging,” Momentum said.
Independent Regulatory Board for Auditors (Irba) CEO Imre Nagy warned of an auditors shortage in South Africa.
The country’s auditing profession faces a skills shortage due to low mathematics literacy, emigration, and negative industry perception.
The industry has lost its lustre because of high entry requirements to study accounting, high tuition fees, low pay, high work stress, and negative publicity about the auditing profession.
The skills shortage is exacerbated by low maths literacy in South Africa, which significantly reduces the number of students able to study accounting.
In addition, several push-and-pull factors, such as political and socioeconomic instability, drive the emigration of highly skilled professionals.
The increasing lack of skilled workers is not only a significant problem in South Africa’s financial services sector, said WBHO chairman Louwtjie Nel.
In the company’s annual report, Nel said South Africa is facing a significant talent drain across multiple sectors due to the many challenges the country is facing, particularly rising crime and corruption.
“There is an urgent need for South Africa to prioritise upholding the rule of law. The adverse effects of not doing so are becoming increasingly obvious,” Nel said.
“Crime and corruption function as significant deterrents to business and investor confidence, demanding swift and decisive action.”
“We strongly urge the government to combat the growing tide of criminal extortion and corruption that is affecting South African society, particularly within the construction sector.”
One consequence of these challenges in South Africa is a significant talent drain across various sectors.
Finance Minister Enoch Godongwana noted in a May Parliamentary session that 2,700 individuals earning over R500,000 annually and another 1,100 earning over R1 million have left the country.
This departure equates to a loss of R1.3 billion in tax revenue for South Africa.
Of greater concern for Nel is that many young professionals, including engineers and quantity surveyors vital to the construction industry, are departing in search of opportunities abroad.
“This trend does not merely impact the construction sector. It has far-reaching implications for the national economy,” Nel said.