South African graduates struggle to find jobs because they do not have the right skills

There is a vast and growing mismatch between worker qualifications, including the fields of study at university, and the available jobs in South Africa’s labour market. 

This leaves many university graduates unable to find stable employment, which significantly constrains economic growth. 

The mismatch is compounded by a severe lack of university infrastructure and the high cost per student in the country, which prevents many from accessing higher education or further training. 

This is feedback from the Organisation for Economic Co-operation and Development (OECD), which outlined some of the main reasons behind South Africa’s high unemployment rate. 

These analyses were included in the OECD’s latest economic survey of the South African economy, which focused on why economic growth has stagnated and how it can be revived. 

One area of focus for the organisation was the country’s high unemployment rate, particularly the lack of employment among people aged 18 to 35. 

It is said that the labour market in South Africa is characterised by persistent mismatches between workers’ qualifications, fields of study, and available jobs. 

This highlights a shortage of skilled and semi-skilled workers in the country, which ultimately constrains long-term economic growth. 

Skills shortages persistently due to a lack of quality education, despite the significant progress made in recent decades. 

According to the latest data, 45% of men and 46% of women in South Africa between 25 and 64 years old had more than a secondary education. 

In comparison, the average for an OECD country is 79% of men and 81% of women. This emphasises South Africa’s poor educational outcomes. 

The organisation added that this reflects severe inadequacies in technical and vocational education and training programmes. 

This is part of a broader issue within South Africa’s higher education sector – the failure of it to align its programmes with the skills demanded by the labour market. 

The OECD also called for more teachers and university lecturers with real-world industry experience and greater use of internships to better prepare students for the demands of the job market. 

South African universities under pressure

South African universities are coming under increasing pressure, with a substantial lack of infrastructure limiting the number of students they can enrol. 

The decline of the country’s vocational education and training colleges, or technikons, has also led to a significantly greater demand for university education. 

However, universities are unable to meet this demand as there has been little investment in expanding higher education campuses or building new institutions entirely.

The OECD noted that enrollment in higher education and graduation rates are low, which limits the supply of skills and negatively impacts young people’s employment outcomes. 

Its data shows that in 2022, 11% of men and 15% of women aged between 25 and 34 years old had a tertiary education in South Africa. 

Worryingly, this is below the share recorded in 2017. This indicates that proportionately fewer individuals are able to enter and complete higher education. 

These shares of the population also remain well below the OECD average of 41% of men and 54% of women. 

In South Africa, there are clear advantages to having higher education, with an individual who completed high school having a 30% greater chance of employment than those who did not. 

Having a tertiary education gives the average South African a further 25% greater chance of employment. 

The organisation said the supply of graduates is severely constrained by the lack of university infrastructure and the high cost per student in South Africa. 

Public subsidies for low-income students are proportional to tuition fees, creating incentives for universities to set higher fees. 

However, the number of students who qualify for subsidies is higher than the number of seats the government budgets for, creating significant financial constraints. 

It suggested that the government implement formula-based financing where universities can compete for public funding to reduce the cost per student and incentivise universities to expand their infrastructure.