Labour, government and industry need to drive skills development

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Labour, government and industry need to drive skills development

The focus of organised labour, as well as the public and private sector needs to shift towards developing the proficiencies of the vast number of unskilled workers in the country. Instilling a culture of lifelong learning in the workplace, especially among low-skilled and unskilled employees, will help companies to bolster productivity and efficiency so that they can compete effectively at a global level. This approach will also empower and motivate employees to play a more meaningful role in the growth and development of the economy, as opposed to only performing mundane jobs that do not pay decent living wages and are not secure in an economy that is relying heavily on advanced skills.

South Africa has the lowest productivity rates among emerging economies. This is due to the high cost of doing business, which includes the impact of increasingly frequent industry strikes; lack of competition in many markets; and a dire shortage of skilled labour. Many citizens of working age do not possess sound workplace literacy skills. This is the ability of employees to deploy basic literacy and mathematics skills to perform their jobs productively, efficiently, accurately and safely. While this is also a legacy of the past that deprived many South Africans of a basic education, the situation has been exacerbated by the significant deterioration of the country’s school system over the years. The outcome is students who have average skills and a vast majority of young learners who are performing poorly in a very unequal education system. Worryingly, young learners in the top 200 schools still achieve more distinctions in critical science, technology, engineering and mathematics subjects than pupils in the next 6 600 schools combined. Meanwhile, more than 90% of nine-year old learners in Limpopo and 85% in the Eastern Cape cannot read for meaning. There is a strong likelihood that they will not be able to close this wide learning gap and, therefore, struggle to complete their schooling or join the many South African citizens who have chosen to forego their education. Out of a group of 100 young learners who start their learning journey, only between 50 and 60 will complete their basic education and just 14 will obtain a university degree. In 2017, there were about 2-million unskilled workers in the labour force who only attained a primary or lower education. This group made up 12,5% of employed South Africans in 2017 compared to 16,6% in 2010. While there has been an improvement in upskilling South Africans, the rate of change has been very slow. Clearly, significantly more will have to be done to make a substantial impact.

“The onus lies on government, the private sector and organised labour to collectively work towards a sustainable solution, which entails developing the skills the country needs to compete in this new digital era that focuses on high productivity and efficiency. Instead, the focus of labour across both the private and public sectors, to date, has mainly been on paying higher wages for less work produced. This is simply unsustainable, especially in current economic conditions, and will only lead to further retrenchments.

These inefficiencies manifest in both the public and the private sectors through declines in service delivery and productivity, respectively. A severely bloated government intends restructuring its public-sector wage bill which poses a serious risk to the national fiscus. At the same time, 60 000 public-sector jobs are at risk in the foreseeable future, and this will only compound our already-high unemployment rate. It is unlikely that the private sector will be able to compensate for this as it is also shedding jobs. Some companies are relying increasingly on advanced technologies to survive the challenging economic climate. Meanwhile, some low skilled positions are simply being made redundant because they are no longer relevant in an economy that is preparing to undergo the Fourth Industrial Revolution to compete effectively at an international level. Rather, both government and the private sectors should be focusing on developing the skills that they need and then retaining them as part of a long-term solution,” Marco Maree, Expert Training and Development Advisor of Triple E Training, says. Triple E Training is a leading accredited provider of adult literacy training and adult numeracy training solutions that are helping companies to enhance the proficiencies of their low skilled employees. Employees who have completed the company’s training programmes have been primed for further learning so that they can continue adding value, while also growing and developing as individuals inside and outside the world of work.

In this way, skills development and training also help to address rising inequality, which is at the heart of these strikes that are crippling the economy. The private sector continues to grapple with increased disruptions to business due to prolonged strikes from a smaller workforce. This is, in turn, thwarting productivity and leading to further job losses. One protracted strike, for example, cost a mining company about R400-million a day in lost revenue. These incidences also lead to a reduction in business confidence and increased risk of economic stagflation

Labour status and education levels are among the lead drivers of the stubbornly high levels of inequality in the country, combined with lasting legacies of the previous system, including race and geo-spatial factors. Skilled South African employees currently earn almost five times the average wage that their unskilled counterparts do. Yet, skilled employees make up less than a fifth of the total population. This has led to a so-called “missing middle”, in terms of skills supply. Companies, therefore, have to pay a premium for scarce skills, which hinders their ability to compete effectively at a global level – and they are still not nearly as productive as their international counterparts.

Wage inequality in South Africa has been an ongoing trend since 1995. Between then and 2014, the real wage Gini coefficient increased from 58 to 69. This was mainly due to an increase in capital and skills intensity in most local industries since the advent of democracy in 1994. The shift from labour to capital and the change in the skills composition of the local workforce could be evidenced by the decline in formal unskilled and semi-skilled job prospects between 1994 and 2015. This is despite growth in gross domestic product. Therefore, increasing employment, alone, will not necessarily have the desired impact on inequality in the country. For example, creating a million jobs would only reduce the Gini coefficient by between 0,8 and 1,5 points, depending on the industry in which these employment opportunities have emerged. This is considering that these job opportunities will mainly be geared at individuals with high skills sets and not necessarily for the poorest job seekers.

“To help fight rising inequality, the public sector recently launched a national minimum wage and there are even plans to introduce a basic income grant. No one can argue the humanitarian benefits of such initiatives, which already showed to be very effective during the lockdown that was implemented to contain the spread of the Covid-19 virus. However, such initiatives do carry a high potential risk to our very weak economy. Another major concern is that they will further entrench low skilled labour when we should rather be focusing all of our efforts on building a robust pipeline of skills that we need to grow and develop our economy. This includes equipping employees with the basic skills that they need to embark on a journey of continuous learning so that they can sustain their jobs and improve their employability,” Maree concludes.

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