Talent war intensifies across Africa – Report

A tight competition for professional and technical skills is emerging in Africa with most companies experiencing volatile labour mobility of highly skilled persons, according to a new study by EY, one of the member firms of Ernst & Young Global Limited.

In a report published this month, EY’s Attractiveness Survey Africa 2015 – Making Choices, human resources managers called on African governments to reshape tertiary education to ensure that it meets labour market needs.

“More technical programmes are required to equip African workers with high quality skills that business needs,” said Ajen Sita, chief executive officer of EY Africa.

EY surveyed 300 companies across 23 African countries last year.

According to the report, about 70% of companies whose high-level manpower needs were surveyed were taking longer to fill vacancies and employee turnover was high.

Of great concern was that although by 2040 Africa is expected to have the world’s largest labour force, ahead of India and China, foreign companies investing in the continent will continue to find it hard to get suitable technical and professional staff.

Statistics from UNESCO indicate that education levels remain low in Africa, especially in Sub-Saharan Africa where secondary school enrolment stands at 40% on average and the transition rate to tertiary level at 7%.

UNESCO forecasts that Africa is likely to be home to half of the world’s illiterate people in the coming years – a situation that will clearly limit the number of highly qualified people available to be hired by companies and other organisations.

Rajiv Memani, chair of EY’s global emerging markets committee, advised companies to embark on a strategic process of managing their talent pool as well as being able to move talent efficiently across the continent.

“Besides, companies should start investing in education and training in order to enhance workforce skills,” said Memani.

Skills mismatch

Africa’s talent shortage is complicated by a prevailing mismatch in skills that job seekers offer and those sought by employers.

Drawing heavily on The Global Talent Index Report: The outlook to 2015 produced by the Economist Intelligence Unit, the EY’s survey says another cause for companies concern in Africa is the scarcity of soft skills.

“During our study, corporate managers noted there was limited appreciation of soft skills along with the more traditional hard skills among many new employees in Africa,” said Sita.

Human resource executives interviewed by EY researchers noted that creativity and brainstorming skills were lacking as well as relationship building and team skills.

The crux of the matter is that today’s interlinked business culture is increasingly interested in skilled workers who have the ability to forge relationships with suppliers, outsourcing partners and even customers.

Given that talent is a key component of business competitiveness and companies are pursuing strategies to develop, attract and retain talent in future, human resources managers were reminded to sensibly view Africa’s business options.

According to Aubrey Hruby, a visiting fellow at the Atlantic Council – a Washington-based think-tank on international affairs – companies already in Africa and those looking to explore opportunities for the first time should resist the swing of the pundit’s pendulum between Afro-optimism and Afro-apocalypse.

“Instead they should take a realistic view in that rapid economic growth is neither linear nor smooth, as there will be many detours and bumps on the road to the continent’s prosperity,” said Hruby.

Emerging thinking

Emerging thinking is that for companies to gain competitive advantage in Africa, they need to recruit talented local people with the skills to manage stakeholders and the ability to develop partnerships.

According to the EY report, this has triggered a talent war, given the limited availability of highly skilled people in most African countries.

Despite the narrative of increasing employment opportunities for local specialists, the inherent scarcity of skilled labour on the continent has created demand for expatriates. Over the years, some companies have developed a strong appetite for expatriates as invaluable in providing specialist expertise lacking in Africa.

But hiring expatriates presents growing challenges. According to the EY report, it is taking much longer to hire expatriates in Africa, as most governments – especially in Sub-Saharan Africa – are making it harder to recruit them, as they seek to protect local talent.

To overcome the problem and to reduce overdependence on expatriate workers, companies must foster skills transfer from expatriates to local staff. According to Sita, there is an urgent need for companies to initiate deliberate policies on attracting and retaining staff.

To secure the talent they require, companies will need to make training and career development part of their brand by developing processes to monitor and reward employee performance and ensure management continuity.

African governments and tertiary institutions will have to embark on curriculum reform with the objective of producing graduates with skills required in the labour market.

For now, there is unlikely to be a truce in the ‘war’ for talent in Africa.

According to Sita, as companies gear for growth, the demand for skills to support such ambitions is bound to increase.

There was not a single human resource manager among the 300 companies across 23 African countries that participated in the EY’s business attractiveness survey who expressed optimism about finding a quick solution to the ongoing war on talent.