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Graduate unemployment in a skills-short economy bedevils growth

South Africa has a glaring disparity between its higher education system and the workplace, an issue that can only further harm an economy struggling to absorb its youth and grow in line with its BRICS – Brazil, Russia, India, China and South Africa – trading bloc partners.

Many graduates cannot find employment – tragically, in an economy facing major problems relating to scarce skills. In short, there is a mismatch between the graduates produced and the skills required to shift South Africa into the next economic gear.

South African Graduates Development Association (SAGDA) CEO Thamsanqa Maqubela said graduate unemployment – defined as that among people with a minimum three-year academic or vocational qualification – had escalated since the global economic recession.

Depending on which statistics are considered, South Africa has between 255,000 (Statistics South Africa Labour Force Survey 2009) and 600,000 (Adcorp labour market analyst Loane Sharp 2011) unemployed graduates.

The SAGDA database reflects that 9.7% of unemployed graduates received their qualifications via universities; 16.2% via universities of technology; 60.3% via private and further education and training colleges; and 13.8% via sector education and training authority learnership programmes.

Maqubela said it hardly mattered which statistic was correct. The key issue was what institutions, business and the government – particularly the Department of Labour – were doing about the situation.

Skills mismatch

Beyond the recession, he acknowledged that there was a skills mismatch driven by a lack of career planning, guidance and management at high school level; poor mathematics and science education in high schools; a lack of employment attraction skills such as interview and job searching skills; and minimal work experience exposure.

According to the SAGDA Graduate Employability Assessment Report 2011, formal employment absorbed only 7.8% of graduates taken on a sample size of 1,000 graduates of whom 98% were black and 2% ‘coloured’ (mixed race). Graduate joblessness is highest among black and ‘coloured’ South Africans.

Another 14.9% embarked on entrepreneurial business paths; 26.8% undertook internships; 12.5% took volunteer positions; 3.6% became stay-at-home family members; 2% travelled abroad; 5.9% undertook postgraduate studies; 9% undertook further studies but towards new qualifications; and 30% were unemployed.

Adcorp analyst Loane Sharp said the key to avoiding graduate unemployment was a careful study choice before university enrolment in courses that had limited demand.

Professionals including accountants, lawyers, medical doctors and engineers had the lowest unemployment rate at 0.4%, while only 3.1% of those holding degrees in commerce, science and accounting science were unemployed.

Sharp said management skills accounted for nearly half of the 829,000 vacancies in corporate South Africa, but graduates with arts degrees, including music and social science, were "far more likely" to battle.

Tertiary institutions were failing to produce enough graduates in business-related fields, despite the demand, but this was only part of the picture. A lack of work experience was also a significant drawback to graduates fulfilling their economic roles.

"Most graduates seeking jobs either lack work experience, on-the-job knowledge and supervisory skills or have degrees irrelevant to the job market," he said.

This meant graduates should choose the right subjects, achieve the highest grades possible, specialise in sought-after honours programmes – including in economics, finance, statistics, accounting, law, mathematics and quantitative methods – and undertake voluntary holiday work to gain an edge over their classmates.

Sharp said professional bodies that restrict entrance to those professions, typically via examinations and other criteria like articles and internships, were also hindering graduates in finding employment.

He said the General Council of the Bar, the law societies, Health Professions Council and Institute of Chartered Accountants had prerequisites for entry, while fields such as physics, finance, engineering, economics and management were not bound to professional body qualifications.

Racial differences

Higher Education Minister Blade Nzimande has taken the argument to another level in stating that black graduates find it more difficult to secure employment than their white counterparts.

He said that 55% of black graduates from Stellenbosch University were unlikely to find jobs in their first year, against only 12% of white students, while statistics for the University of the Witwatersrand were 29% and 7% respectively.

"Most black youngsters do not have the family and other labour market connections generally enjoyed by whites and a few, more affluent blacks," he said in prepared remarks delivered on his behalf at the Walter Sisulu University last month.

He blamed historical inequality and poverty for determining students' access to education and their ability to achieve academically. Historically black universities also remained disadvantaged in terms of resources and the quality of their academic programmes.

Scarce skills problems are not only holding back the economy but also social services.

Nzimande warned the South African Medical Association (SAMA) that the graduate output targets in the human health scarce skills field would not be met by 2014 with the current rate of medical professionals produced by training institutions.

His comments followed calls by SAMA to discuss issues, including South African medical training, the transformation of postgraduate training of medical specialists, medical student funding and the recognition and classification of a postgraduate management qualification.

Fuelling these concerns were comments by Health Minister Aaron Motsoaledi that South African medical schools were only producing 1,000 doctors annually, when the country was facing a critical shortage ahead of launching the National Health Insurance scheme. SAMA added that the failure rate among black students tended to be "particularly high".

Attempts to tackle the problem

However, it is not all doom and gloom, and business is coming to the party to tackle the problem of youth and graduate unemployment.

For instance, earlier this month the Master Builders Association (MBA) of the Western Cape announced it would provide local school-leavers who had passed mathematics in Grade 12 the opportunity to enter the industry, obtain a trade certificate and gain employment.

MBA Western Cape Executive Director Rob Johnson said previously the organisation's annual bursary funding had focused on tertiary education. The 2013 allocation would see a "considerable amount" invested in practical vocational training in a bid to build a pool of skilled, experienced future industry leaders.

All agree that having an economy supporting unemployed graduates was unsustainable.

Maqubela concluded that absorbing graduates into the economy was critical, because they broadened the tax base, promoted interest in higher and further education among peers, reduced the negative perceptions on the effectiveness of education to fight poverty and violent crime, and reduced student indebtedness to the state and the institutions, thus paving the way for more students to access grant funding.

It is also the only way to ensure South Africa can box in its division within BRICS.
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