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Media Info
 Job losses may work in South Africa's favour
7 April 2009
… but government has to do more to help new business develop and existing companies to access loans to create new jobs
Job losses and immigration freezes in the developed world may work in South Africa's favour, as head-hunters say they are suddenly finding favourable responses to their search for talented foreigners to come and work here. And too, those South Africans looking for jobs in other countries suddenly find that nations like Australia have closed their doors.
But very highly skilled people like engineers and doctors are still leaving South Africa.
Andre Snyman CEO of Consumer Assist South Africa's largest debt counselling organisation said. He was critical of banks for "hiding behind the National Credit Act to use it as an excuse not to grant credit, their ultra-strict policies are stifling the economy and creating job losses. Sensible lending helps economies grow without rampant debt." He and a number of professional organisations say difficult access to credit is creating a worse brain drain now than crime.
"The people being recruited overseas are those in scarce fields where South Africa's gaps in talent are slowing our economic growth," Snyman said. "If you look at the fact that we only have 75% of our skills need in the information technology field, along with acute shortages of accountants, doctors and nurses, the massive job losses in Europe and the USA - where almost 700 000 jobs were shed last month alone, could work in our favour if government speedily processes work visas. These are not people that will take SA jobs, there are simply not enough qualified South Africans in key economic areas."
Neil Eriksson, development manager for cellphone payment system, Pocit, said: "In 1999, there was an oversupply of IT graduates, but there are too few now. They are being snapped up and paid huge salaries. In our Cape Town operation alone we need to boost our staff complement by 30%, without that it impedes our ability to innovate, develop and grow as fast as we would like too." But he said they could find no staff. He said that increasingly they were looking for talented self-taught IT fundis who did not necessarily have a university degree. "Some are brilliant, but it makes recruitment a long and very difficult process."
Harder to leave
Snyman said too that stricter entry requirements from the US, Britain and a no-entry bar for new workers from Australia would also help to keep talented professionals within South Africa. "These are not the times to job hop or emigrate." But he said too, that an overly conservative hold on monetary policy by the South African Reserve Bank and a sharp contraction in lending by banks was giving an incentive to those that had scarce resource talents to leave South Africa.
"There are some professions that every country in the world needs, these include medical staff and engineers and South Africa needs to remove barriers to entrepreneurs starting up businesses to keep them and encourage economic growth and employment creation."
Last week, Michael Hosking, the chief executive of the International Society for Professional Engineers claimed that each day up to five engineers were leaving South Africa because: "The drain of liquidity from the economy by the Reserve Bank and the commercial banks has not only placed us in a serious recession … (but) We have had many complaints from engineers about the inability to obtain project finance, vehicle finance, practice loans (and) bridging finance from our commercial banks and other financial service providers."
Engineers are in short-supply globally and South Africa has one of the world's most acute shortages of qualified engineers. Hosking said membership of the society had fallen from 14 000 to 6 000 in eight years. "In the past six months there has been acceleration in professional engineers leaving the country and the lack of finance has surpassed crime as the main reason."
A study by the National Science Foundation showed that South Africa produces 0,5 students in engineering and the natural sciences for every 100 000 of the population, compared with Finland's 13,2, which is the world's highest.
The NSF stated that if the outflow of engineers emigrating was taken into account, the 0,5 engineers for every 100 000 probably dropped to about 0,4 or less. South Africa is currently probably producing the smallest number of engineers in the world apart from Lesotho. At this rate: "South Africa will never become a technological or economic world leader. To achieve this, we would have to produce ten times more engineers than at present."
Snyman said: "Government needs to remove the many obstacles to opening a new business in South Africa; it is a consistent complaint from domestic and foreign investors. Small and medium enterprises employ 75% of workers. We have an associate who is in good financial standing but is in her fourth month of trying to get VAT registration for her new company - that is an unacceptably long delay."
He said low financial awareness and poor numeracy skills were adding to South Africa's rapidly growing debt crisis and an inability on the part of many consumers to successfully manage their finances. "Last year, almost 600 000 learners sat for the Grade 12 examination, but less than two percent, or 10 000, obtained the minimum admission requirement for engineering. Medical schools are complaining about the declining standards among students and fewer specialists being trained. All of this has serious consequences for economic recovery and job creation."
FOR FURTHER INFORMATION www.consumerassist.co.za 0861 21 22 23 debt counselling call centre
Andre Snyman - CEO - Consumer Assist
aurelia.espag@consumerassist.co.za / 011 654 6018 (Languages: English, Afrikaans)
Source: MediaOnLine
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