South Africa in the middle of a massive emigration wave as more skilled professionals resign

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South Africa is seeing a massive resignation wave that will impact the country’s post-Covid economic rebound, says Emma Durkin, head of Human Capital at Altron Karabina.

While much of the focus of South Africa’s post-pandemic strategy has been on infrastructure and capital development, a more critical factor is valuable human capital and much-needed skills at South African businesses, she said.

Speaking to Michael Avery in the latest episode of BusinessTalk, Durkin said that while an increase in resignations was first reported in July 2021, what was a trickle in cases has developed into a full-blown wave as more skilled people weigh up their options.

“If we don’t look after people now, the scarce skills bump that we are going through now is going to become a crisis, and that is something we want to avoid,” she said.

While South Africa is not unique in experiencing a brain drain, Durkin said that the Covid-19 pandemic and closure of borders had created 18 months of pent-up demand, with a significant amount of people emigrating in just a few months.

“As industries are opening again and people are becoming a little more confident, they are recruiting aggressively, particularly in the tech area.”

While there is a lot of negativity in South Africa, Durkin said that the key reasons are the same as they have been for more than a decade, including:
Disillusionment with the government;
Load shedding;
High unemployment;
Poverty.

However, Durkin noted that more recent developments have also accelerated the emigration wave. “A big wobble within our employee grouping was the unrest in Durban earlier this year, which touched on Gauteng. That really has instigated quite a big wave in our environment.”

Finances

While the reasons for emigrating from South Africa are well-documented, Durkin said that many skilled South Africans are also quitting their jobs due to finances.

Coming off the back of 18 months of a pandemic, salary cuts, reduced incomes, and increased inflation have all played a part, she said.

“Essentially, people are leaving to get more money – it really is as simple as that. We have a lot of families where a breadwinner or spouse have lost their jobs on the back of Covid-19. So there is an awful lot of people who are under an awful lot of financial pressure at the moment.”

“Resigning for another job, even if it’s at another local company, you are essentially guaranteeing a 10% – 20% increase in your earning power, which is very alluring,” she said.

Durkin said that many companies are now looking at market-related salary bindings to ensure that skilled workers are not lost. However, she noted that the tech sector is seeing something of a ‘feeding frenzy’ at the moment as competing companies offer increasing wages to attract the best workers.

This makes finding ideal salaries quite hard at the moment as there are always people who will pay more for a particular skill, she said.

A number of skilled South Africans are opting to resign from their corporate jobs to freelance as part of a growing ‘great resignation’, according to contracting company Outsized.

While this trend has been reported internationally, South Africa is unique as the pool of available independent skills in South Africa is often criticised as shallow in some fields, it said.

A survey conducted by the group found that 81.5% of skilled professionals are considering resigning to go solo. Although South Africa’s unemployment rate is disconcertingly high, many skills are in short supply and people with experience in those fields will not struggle to find positions, it said.

Johann van Niekerk, managing director of Outsized for Africa, said that skilled professionals are opting to become independent for multiple reasons, including:
Flexibility;
The chance to earn more money and control their destiny;
To work when it suits them and to enjoy more variety.

“For many, what was previously just a thought germinating in their minds has sprouted because of Covid and the constraints and the opportunities it has created. Moreover, if the skills you need are not available locally, another beauty of using contractors is that you can draw from anywhere in the world,” Van Niekerk said.

He said that handling this change requires a different way of thinking because HR departments are set up to deal with long-term hires rather than to dip into a global talent pool on an ad-hoc basis.

“Companies have been able to ignore this trend until now because it was a trickle, not a flood. But the coming weeks and months are likely to see a huge growth in resignations across all sectors as talented individuals opt for freedom, having prepared for the leap and with the security of knowing that their skills are in high demand.

“Even if only a small percentage of your workers resign, for a big business that could mean tens or even hundreds of key workers leaving.”

House sales show emigration trend

FNB’s latest property barometer shows that many South Africans are selling their homes with plans to emigrate.

Emigration-related sales in South Africa increased steadily between 2015 and 2019, rising from 5% of total sales in 2015 to a record-high of 13.4% in Q2 2019, the financial services firm said.

This number subsequently dropped to around the 8% mark in 2021 due to a confluence of factors, including international restrictions and a strong property market. However, this is up a percentage point compared to the Q2 2020 report (7%).

While the emigration-related selling trend has remained stable at 8% across the country for all home sales, the data shows that wealthier South Africans are more likely to sell up to emigrate.

As many as 14% of home sellers in the R3.6 million house price bracket are selling to emigrate, with this figure dropping by a percentage point to 13% in the R2.6 million – R3.6 million house band.

Source: https://businesstech.co.za/news/business-opinion/542614/south-africa-in-the-middle-of-a-massive-emigration-wave-as-more-skilled-professionals-resign/?

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