A recent white paper from payroll services provider Playroll, in collaboration with IT and developer employment marketplace OfferZen and executive recruitment agency Aims International, demonstrates that South Africa’s skills issue is more widespread than industry-specific shortages suggest.
According to the group’s research, over 80% of all business leaders polled perceive talent emigration to be one of the most crucial risk concerns confronting their organisations.
This comes at a time when emigration looks to be increasing, according to the report.
Around 900,000 South Africans have already departed the country, according to the UN Department of Economic and Social Affairs’ 2020 International Migrant Stock report, which was released in 2022.
According to the UN estimate, 914,901 South Africans would be residing in other countries and territories by the end of 2020, up from 786,554 in 2015.
Worryingly, over 128,000 individuals departed from South Africa between 2015 and 2020, more than three times the number that left between 2010 and 2015.
The UK has the highest South African migrant stock, with about a quarter of a million inhabitants claiming RSA as their birth nation. Australia, the United States, and New Zealand follow.
According to Playroll, the issues surrounding the emigration of vital talents are more complex than these figures indicate because young people are increasingly departing.
The organisation highlighted that people between the ages of 25 and 40 are the most likely to leave the nation, and perhaps more concerningly, more than half of South African graduates have the potential to emigrate in the future.
Senior personnel are also more likely to migrate, most likely because they have the financial wherewithal to do so, according to the report.
The most current tax figures from the South African Revenue Service corroborate the trend of younger individuals leaving (SARS). In the absence of official government data on emigration, the number of South African taxpayers who have terminated their tax residence in the nation sheds some light on these patterns.
According to SARS data, approximately 40,500 taxpayers have discontinued their tax residency in the previous five years, with lower-income earners accounting for a larger share of those departing in recent years.
According to Tax Consultancy SA, this is a sign that younger South Africans are electing to renounce their tax residency in order to pursue possibilities abroad.
According to Playroll, emigration is becoming a big issue across business sectors, with organisations with an operational or manufacturing emphasis facing increased pressure to fill jobs that were formerly reserved for the financial and high-tech industries.
“Interestingly, the results of our survey showed that while most companies considered C-Suite and management tiers as the most vulnerable to emigration, tech-focused businesses perceived the threat at an associate level,” it said.
“This suggests that tech and software industries are the bellwethers, not just of employer sentiment, but of actual demographic trends, as they show up in the emigration data. With no respite on the horizon, the South African business community is understandably on alert.”
According to the organisation, the United Kingdom will be the top emigration destination for expats in 2022, followed by Australia and Portugal.
People relocate overseas for a variety of reasons, including improved quality of life, increased earning potential, personal safety, and job advancement.
Closer to home issues
Nevertheless, according to Playroll, the skills shortage is not simply being exacerbated by South Africans departing.
Many experienced and qualified workers who choose to stay in the nation are increasingly taking advantage of remote job options offered by global organisations, according to the report.
According to Simonetta Giuricich, Chief Operating Officer for Playroll, Covid-19-fueled remote work arrangements mean that many skilled South Africans are not available for local employment because they can access high-paying work opportunities with international companies while remaining in the country.
According to the group’s study, an alarming percentage of local software professionals work for foreign corporations while remaining in South Africa. It is believed that 40% of the country’s 120,000 developers work remotely for international corporations.
Hence, while emigration may be reducing in some industries, this does not necessarily bode well for local enterprises.
According to Giuricich, employee emigration not only causes acute gaps in an organization’s essential skills and credentials, but it may also lead to entrenched competitive issues in the long run.
To retain important talent, firms need look beyond merely giving more pay, according to Playroll.
“An attractive job package people are willing to stay for means more than just take-home pay. Make sure to consider non-pay-related factors like work arrangements flexibility, and you could have a winning recipe to retain your best people,” it said.
According to Playroll’s study, there is near agreement among firms in South Africa about the value of flexible work practises for keeping talent.
“A renewed emphasis on retention is likely to accelerate conscious implementation of greater work contract flexibility across the board – not only in tech,” it said. “A majority of those surveyed
acknowledged the gap that remains in satisfying a hunger for greater work flexibility – with one respondent describing the deficit as ‘an elephant in the room’.”
According to the organisation, in order to bridge this gap, South Africa’s business community would need to investigate new talent migration options in addition to existing ones, which are often unscalable.