SHORTAGE OF SKILLS IN CRITICAL SECTORS IN SOUTH AFRICA
South Africa faces a continuing shortage of essential skills, according to Adcorp, a publicly traded workforce solutions company, particularly in the areas of nursing and information technology.
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The group released its financial results for the full year ended February 2022, noting a tense operating environment in South Africa, exacerbated by the Covid-19 pandemic, power outages and social unrest.
Revenue for the year fell 1.7% to R11.5 billion (2021: R11.7 billion), although gross profit from continuing operations increased 7.0% to reach 1.2 billion rand.
Total aggregate earnings per share increased to 99.4 cents per share (2021: 34.2 cents per share), and the company declared a dividend of 47.0 cents per share (2021: 0).
Adcorp offers recruitment and staffing services in various sectors in South Africa and Australia. Its operations are divided into 15 different divisions to manage each sector. In addition, it offers industrial and professional staffing solutions, as well as training.
“At the start of fiscal 2022, the business environment remained constrained due to customer pressure to cut costs and streamline employees due to the ongoing Covid-19 pandemic,” he said. he declares.
“Slow economic growth and persistent electricity supply and infrastructure issues in South Africa have had a negative impact on economic growth and, therefore, the demand for casual labour. Demand was further negatively affected by the July unrest in KwaZulu-Natal and parts of Gauteng.
These issues have impacted the group’s casual labor operations as well as its functional outsourcing division, although it expects them to recover as it pivots its products to be more in tune with the changing environment.
For example, the group’s engineering, construction and energy brand, Cynergy, has been repositioned to serve the emerging renewable energy sector – but the full effect of this decision will not be seen until fiscal year 2023, he said.
Its professional services have also been hit hard, Adcorp said, with revenue falling as South Africa’s economic recovery stalled and demand for its services fell. Many client projects remained on hold, he said, resulting in lower contingent and contract resource requirements.
Notably, Adcorp said skills shortages in critical areas continued, particularly among nursing and IT resources, affecting its medical brand, Charisma, and its IT brand, Paracon.
“Nursing shortages have had a negative impact on the Charisma business, although a focus on nurse retention and a pivot to contract Covid-19 and vaccine services has helped to mitigate the effect,” said he declared.
Looking ahead, the group said it expects much the same for fiscal 2023, but with at least some recovery.
“Adcorp expects the slow recovery in South Africa to continue through fiscal 2023 and remains concerned about rising inflation, high unemployment and continued failures in infrastructure and service delivery. services. We have seen the first signs of some recovery in permanent and contingent demand,” he said.
Skills shortage
Adcorp’s reports are linked to the findings of several recruitment firms and the government itself.
Data from specialist expat company Xpatweb showed that engineering skills are among the most in-demand skills in South Africa. Employers are looking for highly qualified engineers with many years of experience.
Also included are technologists and technicians in specific fields of engineering. However, these professions will need to register as professionals in their field with the Engineering Council of South Africa (ECSA), which is the statutory professional body regulating this industry, he said.
According to Altron, emerging technologies such as artificial intelligence and automation are rapidly changing the business landscape, and cybersecurity and cloud migration are more urgent than ever. Yet the pool of professionals in this field is limited and employers struggle to fill IT skills. gap, with demand exceeding supply.
The group noted that the most in-demand skills among IT professionals in South Africa include everything related to cloud, data engineers, DevOps engineers and Java developers.
On the nursing front, Adcorp’s data reflects the critical shortage of medical professionals recently raised by Health Minister Joe Phaahla.
The minister noted that the country has a doctor-to-patient ratio of 1:3,198 (0.32:1,000), which is extremely low. Medical group Life Healthcare, meanwhile, said the country needed at least 26,000 more nurses to meet growing demand.
