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Taking the gap leaves big holesSOUTH Africa's longstanding shortage of skills is steadily becoming more acute, threatening the country's plans for economic growth and job creation, according to Martin Wetscott, managing director of PE Corporate Services. Shortages of senior, middle and supervisory managers in South Africa has been variously estimated at between 300 000 and 500 000 people, nearly 10% of formal private sector employment. Also evident are dramatic declines in numbers of artisans and technical workers training in recent years; engineering and science graduate numbers which are way behind those in other developed and developing countries, and declining; and rapidly increasing shortages in most professions from medical doctors to information technology. "Many reasons contribute to the erosion of our skills base - including our apartheid legacy and its inevitable impact on levels of training and education within our workforce," says Westcott. "Emigration and relocation are having an inordinate impact, particularly at management level. Crime, corruption and declining standards are promoting a flight from South Africa of essential skills. "These are not limited to white South Africans. Black executives anxious to return home are, tragically, deciding that personal and family safety often carries more sway than sentiment." Staff turnover currently averages 10% a year at managerial level and 8% at lower levels, and costs the economy an estimated R2-billion a year. This estimate is based on the calculated costs of replacing an employee, which can amount to close to one third of annual remuneration. They include severance pay, costs of recruitment, selection and placement of a new employee as well as costs of a new incumbent acquiring the knowledge, skill and expertise to carry out the job. Emigration has increased dramatically as a cause of turnover and now accounts for 13% of reasons for executive terminations, and 11% among all skilled staff. The annual cost from this factor alone exceeds R200-million. In addition, over 60% of turnover at executive and skilled levels is voluntary or employee-initiated. Included in this is the hidden cost of relocations from Gauteng - still the industrial and commercial heart of South Africa - to seemingly safer locations. In all, the proportion of companies experiencing some form of executive turnover has risen dramatically, to 67%, compared with long-term averages of 30%-40% over the past five years. High staff turnover and skills shortages have a serious and significant impact on the management consulting industry. On the one hand, shortages within client companies provide ready opportunities for consulting engagements; on the other, management consultancies have their own difficulties in attracting and retaining staff in a fragmented and competitive industry. Management consultants have always been fair game for client poaching, contractual constraints notwithstanding. Top of page
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