There are currently 833 000 fewer unskilled and semi-skilled jobs in South Africa compared to the pre-pandemic (2019 Q4) period, according to PwC’s ninth South Africa Economic Outlook report for 2022.
These workers were more likely to lose their jobs during lockdown and less likely to subsequently regain them compared to skilled workers. Put differently, higher-skilled adults were more likely to have and retain a job during Covid-19, the report told.
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The auditing firm has warned that South Africa cannot count on future economic growth to solve the country’s unskilled and semi-skilled unemployment problem.
“While our estimates show that employment could grow by 200 000 per year towards 2030, we expect the labour force to grow by almost 350 000 adults per year over the same period. As a result, the country’s unemployment rate will continue to climb — and could reach 40% by 2030 under our downside economic scenario,” Lullu Krugel, PwC South Africa Chief Economist, reported said.
“The exclusion of millions of unemployed adults from partaking in the country’s economic life is contributing to a decline in South Africa’s social cohesion. This, in turn, is causing an increase in societal breakdown and stability risks associated with protests and unrest. As seen in many countries globally at present, when the general population is not prospering, societies are in deep trouble. Real and felt prosperity are absolute requisites for countries or regions to function effectively,” Krugel said.
The country’s education system is currently not producing in-demand workers with the right skills for the job. Eight out of ten unemployed adults have some secondary schooling or completed matric, while there are also 742 000 unemployed people with tertiary education.
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To improve employability, PwC reckons that South Africa needs a national skills vision that includes roles, responsibilities and expectations for every social stakeholder. This includes the private sector that needs to focus on the upskilling of their employees to remain competitive.
Framework for a Social Compact in South Africa
President Cyril Ramaphosa announced in his 2022 State of the Nation Address (SONA) that stakeholders were working on a comprehensive social compact to grow our economy and create jobs. PwC welcomed the endeavour and commented at the time that this compact needs to encompass a national skills vision that includes roles, responsibilities and expectations for every stakeholder.
The president noted on 31 August 2022, that the ‘Framework for a Social Compact in South Africa’ will seek to “provide skills and opportunities to the millions of South Africans that have been relegated to the margins of the economy”.
Christie Viljoen, PwC South Africa Senior Economist, said: “Private sector organisations should undertake robust workforce planning to understand the impact technology and automation has on jobs in their industry, and what this means for the skills needed by their workers in the future”.
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“Upskilling will be vital to ensuring that local industries are staffed with people who have the know-how to help drive economic growth and development.
“Our international research shows that, at a company level, offering training and development opportunities has a quantifiable positive impact on company financials. Specifically, these opportunities result in fewer resignations and increased profitability,” Viljoen concluded.
Compiled by Devina Haripersad
