Early in January 2019, The Enterprise Observatory of South Africa highlighted some alarming findings in the Department of Home Affairs’ 2017 white paper on emigration. According to the research there is an acceleration of skilled emigration with around 400 000 professionals leaving South Africa over the past 14 years.
The trend speaks to a growing recognition that human capital plays a vital role in the knowledge economy, and that a global war for talent has emerged as companies are experiencing a shortage of skilled workers. This is according to Regard Budler, Head of Product Solutions at Momentum Corporate, who believes that many South African companies are not exempt to this challenge “Companies not quick enough to respond to this threat could fall behind, as the global race for the best and brightest gains momentum.”
According to the World Economic Forum Global Challenge Insight Report, highly skilled workers in areas of engineering, as well as humanities, sciences, digital technology and arts are most sought after. The report identifies three key factors that are driving this global tendency, namely the general shift in demographics, the high pay offered by developed economies and limited opportunities for growth in home countries.
“Developed countries are experiencing the negative impact of an ageing population, and are looking to the next generation of highly skilled workers to replace these critical skills. And according to Momentum Corporate research, 76% of the workforce will be younger than 37 by 2020. Employers need to stay ahead of not only current, but also future workforce trends if they want to maximise productivity. This vacuum in expertise is creating an enticing opportunity for a younger, highly skilled workforce – particularly millennials – from less developed economies to gain international exposure while progressing up the corporate ladder,” says Budler.
He admits that in the state of the current economy, it is difficult for South African companies to compete with global salary expectations. Based on an analysis of Momentum Corporate’s client base, 74% of employees earn less than R150 000 per year, while many may have not received annual increases for the last three years. However, he believes it is possible for businesses to counter this by thinking more broadly around their employee value proposition in terms of employee benefits.
“Younger employees are increasingly seeking opportunities for personal growth and career development, including opportunities to travel and work overseas. Companies looking to retain these workers could consider rewarding loyalty by offering workers these alternative opportunities. We’ve noticed more and more companies are using paid sabbaticals, bursaries to study overseas or international role exchanges as a means to drive engagement and keep talent,” continues Budler.
Budler points out that millennials place value on work-life balance and flexibility. The advancement in technology has changed the way employers engage with employees, and how employees engage and collaborate with each other, which can allow workers to work remotely and with greater flexibility. Companies can respond to this trend by acknowledging that millennials value time with family, and recognise that the hours spent in the office don’t necessarily translate to productivity, but rather on getting the task done.
Budler says that with the rise of work place flexibility, highly skilled employees are also looking for more flexibility and choice in the structuring of their formal employee benefits. A good start could be to simply utilise a retirement fund offering that includes member level investment choice or flexibility for employees to adjust their level of cover on group benefits such as critical illness and life cover.
He continues that millennials are also seeking work that is more purposeful. “South African employers can counteract the high salaries offered by global companies by becoming a valued place of work. They can consider doing this by cultivating a workplace culture of shared values, and providing employees with the opportunity to spend part of their time championing causes that are close to their hearts”.
“Partnering with a future-forward employee benefits provider will allow employers to create a compelling employee benefits value proposition that not only resonates with the values and aspirations of highly skilled millennials but one that meets the objectives of the business,” concludes Budler.