The legacy of the education divide
It is often difficult to view South Africa’s realities at any given point without reflecting on the apartheid legacy as the root cause. Skills development is one of them. The democratic government inherited a nation of more than 7.5 million people aged 15 and above who were illiterate or severely undereducated. A further 3 million were completely unschooled and 4.5 million had so little primary education that they were barely literate. The country had an overall illiteracy rate of 29%. A large number of the population had never been exposed to any formal training nor had they received recognition for the skills acquired on the job over the years1.
As if that was not enough, the provision of further education was also a problem. A total of 39 different education systems and respective regulating laws meant there was no nationally accredited and assured qualification framework. This limited the transferability of qualifications across learning institutions and industry sectors. In addition, performance levels varied across institutions, with formerly white education and training institutions being highly resourced while often dysfunctional rural colleges with poor curricula and infrastructure existed in black communities. This pattern extended to workplace and industry training. Training by the employer was mostly in the form of informal, in-house sessions addressing basic skills with a narrow focus, such as health and safety or computer skills, to serve specific employer needs. This training was not externally accredited. The practice of the employer serving as a partner in formal work-based training did not exist in South Africa because there were few incentives to do so.
Skills development and the National Qualifications Framework
The democratic government in 1994 was obviously faced with the challenge to change all of this, and priorities had to be set. The first thing that was done was to embark on a comprehensive reform process for skills development, involving legislation, structures and organisations. The aim was to change the cultural and institutional landscape for skills development and vocational training at all levels. This is when the idea of the National Qualifications Framework (NQF) was born. The main objectives of NQF are as follows:
The NQF vision was manifested through various legislation, such as the South African Qualifications Authority (SAQA) Act, Skills Development Act, Skills Development Levies Act, Further Education and Training Act, Employment Equity Act, and others. Specifically, the Sector Education and Training Authorities (SETAs) were introduced as the key implementation agencies for establishing and maintaining quality in workplace-based training and learning. SETAs are governed by the Skills Development Act and Skills Development Levies Act of 1999. They are responsible for overseeing training and skills development in a specific national economic sector, and developing Sector Skills Plans (SSP) to outline the strengths and challenges of a sector in terms of employment and skills development.
The NQF has not been the perfect solution to the skills development challenge but it has been a huge start and progress has been made. Challenges with the NQF include the time-consuming and costly process of generating and registering a qualification, and the lack of recognition of the diversity of approaches to skills development. There is also a problem of general apathy shown by some employers who seem to be engaging in development programmes only to claim back from the Skills Development Levy, rather than being effective partners in generating a highly skilled workforce for the betterment of the country. These limitations pose a key challenge in our fast-paced, continuously evolving and highly competitive world of work.
The history behind the development of the NQF model should be respected for all its good intentions. However, the model can be modernised to keep pace with and respond to workplace trends in order to future-proof skills development in South Africa.
The unemployment rate in South Africa has been fluctuating but has been on the increase since 2004. It is currently sitting at 27.7%; 36.4% if one includes discouraged job seekers (see Figure 6)3.
The link between education and (un)employment
There appears to be a positive correlation between unemployment and education, with the unemployed consisting largely of individuals with a matric or lower level of education. The more skilled individuals are, the more likely they are to be employed. This is a challenge for South Africa because, owing to the historical reasons painted earlier, a large sector of the population is unskilled4. Given the correlation between education and probability of employment, this suggests a very low likelihood of this sector of the population being employed. This makes the situation highly emotive and political. As a result, it’s often difficult to effectively and objectively deal with the problem because those involved may be either motivated to remain on the ‘politically correct’ side of the story or, in some instances, are simply apathetic.
The skills shortage gap
To exacerbate the situation, the primary sectors of the economy that absorb unskilled labour, such as mining and agriculture, have been shedding jobs in recent years. The economy has been favouring secondary and tertiary sectors, which tend to absorb skilled labour. There is also a massive shortage of intermediate-level skills of the type that are often required by secondary sectors such as manufacturing and services. These are skills obtained at a Further Education and Training (FET) level. The shortage is partly a result of low perceptions of vocational training and education. For historical reasons, South Africans hold a university degree in higher esteem than an FET qualification (for example, a certificate or diploma), which results in fewer students pursuing FET qualifications. And in many cases, the quality of the training obtained at these colleges is insufficient to meet current demand, let alone future demand.
The danger is that South Africa will sit with highly skilled elites at the one end, low employment opportunities for unskilled workers at the other, and a hollowing-out in the middle. We are already seeing, for instance, that manufacturing is underperforming, as reflected by the 4.1% year-on-year decrease in April 20175.
Will upskilling programmes meet the mark?
But is that really the crux of our problem for the future? Google ‘skills development in South Africa’ and you will invariably stumble on the work of Suzanne Hattingh. Hattingh is more than a skills development specialist. She’s someone who has thought long and hard about what South Africa will require to meet the challenges of an interconnected future and compete within a rapidly changing global labour market. Right now, she is deeply concerned. South Africa has been in overdrive in its efforts to address the employment problems of our youth. There has been a massive effort to create a widespread upskilling effort. Her concern is that unless we understand how dramatically the future of work is changing globally, these programmes could fall short of the mark.
We need to talk – industry to policymaker, employer to trainer. We need to think carefully about what it would mean to get us all on the same page.
The impact of automation on skills requirements
We may not know exactly what’s coming but we know what’s almost here because it’s already creating ripples throughout the global work community. Top on the list of concerns is not just a continuation of the rapid rate of automation that has swept the world of work over the last decade, but something that is being heralded as the Fourth Industrial Revolution. Technology has evolved to the point where it can fuse robotics and digital with artificial intelligence, biotechnology, and the Internet. This means we can now do far more than simply automate jobs; we can actually change the way that people and living things organise themselves, regenerate themselves, and interact with the world around them6. With the Fourth Industrial Revolution bearing down on us, we have no choice but to consider how our world of work in South Africa is going to meld with the global world of work.
South Africa, along with Kenya, is probably more exposed to the disruptions of the Fourth Industrial Revolution than other African nations7. Indeed, information and communication technology (ICT) intensity has increased by 26% over the last decade and it’s anticipated that 41% of all work activities in South Africa will be susceptible to automation. At this rate, by 2020, 39% of the core skills required across occupations will have changed8.
What makes this a serious problem is that while South Africa has the highest exposure to this rate of change, it has one of the lowest capacities among the more developed economies in Africa to meet this change (see Figure 7).
By 2020, 39% of the core skills required across occupations will have changed.
The graphs below sum the story up succinctly. The poor quality of our educational system results in an inability to create jobs for our youth.
The question is – are we going in the right direction? And are we going fast enough?
Given the rapid pace of change, business model disruptions are resulting in a near-simultaneous impact on employment and a demand for new skill sets. This is calling for an urgent and concerted effort for adjustment9. The McKinsey Global Institute warns that by 2055 nearly half the jobs performed by humans are likely to be automated. Not only will robots replace manual labour but, through artificial intelligence (AI) and machine learning, the same tasks performed by specialist skilled workers will also be automated10. The McKinsey report indicates that, based on currently known technologies, 60% of all occupations have at least 30% of activities that are technically automatable. Already, studies of the changing world of work in the US have identified that out of 974 jobs, there has been a change of more than 50% in the nature of the work. Since 2000, for example, the job that changed the most was that of photographer. The job that changed the least: economist11.
This implies that most occupations will change, and more people will have to work with technology. Highly skilled workers working with technology will benefit while low-skilled workers working with technology will be more productive and achieve more output. Indeed, the changes to our working world that have led to positive outcomes for workers have actually occurred more in low-skilled than highly skilled jobs. That said, low-skilled workers may experience salary pressures because of the potentially larger supply of similarly low-skilled workers, unless demand for the occupation grows more than the expansion in labour supply. But the more concerning conclusions being debated here are as follows: if the expectation is that automation will result in a 47% upheaval in jobs in developed economies, in emerging economies, that number could be closer to 77%.
Automation of tasks and the demand for ‘uniquely human’ work
Here is where the work by David Autor at the Massachusetts Institute of Technology (MIT) and Joe Davis at the Vanguard Investment Strategy Group perhaps provides a more useful way of looking at the problem. They suggest that the way to gauge these changing demands is to identify exactly which tasks may be embedded in a given job. They make a distinction between basic tasks, repetitive tasks and advanced tasks. In the US, 80% of the tasks that make up many of the current jobs are repetitive. It’s the tasks that are ripe for automation, not necessarily the jobs.
Consider the role of a doctor. Visit a doctor today and no doubt there are any number of diagnostic tests that can be conducted with highly advanced technological equipment. These functions will be automated. But there is a critical role that the doctor’s care and attentiveness play in creating a sense of well-being that automation can’t come close to replacing at this point in time. The placebo effect and its potential to heal in ways no pharmacological intervention can is a very real part of what makes the medical profession one that won’t be entirely automated.
Examine the list of ‘advanced skills’ in Figure 10 carefully. These are the tasks that won’t be easily automated. Note that 99% of future non-automated jobs will require one critical skill: emotional intelligence, or EQ12. This is all about a person’s ability to empathise with others, to perceive and assess others’ emotions, to use emotions to facilitate thinking, and to understand emotional meanings. That’s not a skill that demands advanced degrees from MIT, or years of classroom education. What it requires first and foremost is empathy, imagination, and the ability to engage with other people. Consider the implications this insight has for the way we are currently training our youth! Are we not missing some vital opportunities?
Davis argues that demand for uniquely human work will actually accelerate to the point that it will be a challenge to fill the demand for those jobs. Consider one such advanced skill that South Africans have in abundance: caring for others. Now go straight to our chapter on longevity (Part 2) and ask whether we aren’t missing a trick here.
Now let’s add a further dimension to the whole issue of skills development. This isn’t as much about what skills to develop as it is about how our skills will need to evolve over time to address the increasing reality of a longer working life.
As academics Lynda Gratton and Andrew Scott have pointed out in their book, The 100-Year Life, thanks to significant improvements in medicine and our general lifestyles, many of us will still be highly productive long after a nominal retirement date. This challenges the whole current convention of the three-tiered life: first you learn, then you earn, then you learn to live off of what you have earned. To them, our natural evolution as workers and professionals will be to a multistage life12.
Consider the implications:
South Africa will have to urgently respond to these disruptions and develop skills appropriately.
But perhaps the best news we have seen on this front relates to the way the world of ongoing skills development is being totally reconceptualised. In the Skills development section we describe an exciting concept that we think finally addresses the issue of how to keep employees engaged with their ongoing skills development, irrespective of their current educational level.
According to the 2017 Deloitte Global Human Capital Trends report, acquiring talent and the shortage of skills are two of the global challenges that have become so heightened they are no longer simply an HR professional’s problem. Now they are a C-suite problem. Talent acquisition is rated as the third-highest challenge by business leaders globally. Despite this heightened concern, 35% of organisations in South Africa are currently relooking their talent acquisition strategy, while 15% have no plans to update their talent acquisition strategy. This is problematic because it suggests that organisations are not gearing themselves up for the skills challenge and therefore will not cope in the near future.
Employers at the forefront of skills development
The reality is that it is in the best interest of the employer to have an appropriately skilled workforce and, more importantly, to play an active role in developing those skills, as this insulates the employer from wastage and sets them up for business growth. For instance, studies have shown that better skilled employees are more productive, work faster with fewer mistakes, and therefore contribute to greater profit. Employees who are being developed take more pride in their work because they feel the organisation views them as being important to invest in, and those who feel that the company is investing in them tend to be very loyal to the company.
However one looks at it, employers need to be at the forefront of skills development to prepare for both current and future skills. The South African environment is more challenging because we are dealing with both legacy issues of trying to bring large numbers of the population on par, while the world continues to shift and change exponentially. Therefore, both policymakers and employers need to consider a symbiotic partnership model to respond to the skills shortage and talent acquisition challenge.
Through the Broad-Based Black Economic Empowerment (B-BBEE) codes of conduct and points, companies are incentivised to fund the skills development of their supply chains and communities. Companies can spend on skills development and immediately gain points. This strategy can be leveraged because it has been observed to contribute to the upskilling and improvement of the employability of the African workforce in particular.
However, this strategy will have to be updated because a number of our current qualifications for equipping the workforce are for skills that will no longer be needed in five years’ time, judging by the pace of change. If they will exist, they will be significantly different because, as we’ve seen, the pace of developing qualifications under the NQF model does not keep up with the rapidly changing world of work. In addition, there are unintended consequences to linking the training of people to B-BBEE points because companies are failing to innovate in the training provided to meet core skills of the future. They simply focus on ‘ticking boxes’ of the number of people trained in order to score points. Therefore, such training is often geared towards preparing people for jobs rather than for work, and does not inspire the much-needed entrepreneurial mindset that solves problems of the future and creates entrepreneurs14.
Thanks to the NQF model, employers are already contributing to the Skills Development Levy, which sponsors the National Skills Fund. The National Skills Fund is being used to fund the training of unemployed and other vulnerable people in areas where there is potential for growth and employment. This means the foundation has already been laid. What needs to happen now is to include in the model the flexibility to anticipate the future and the skills that will be required by the world of work in the future.
Central to these skills is the creation of an independent workforce that can think innovatively and solve problems of the future. The Institute for the Future describes 10 skills that will be essential for the workplace of 2020. We believe that these should be the focus of the future for the National Skills Fund:
Given the large population of unskilled workers in South Africa and an economy that cannot absorb them either now or in the near future, it makes sense that skills and development programmes geared towards addressing this challenge should focus on leapfrogging people into the skills of the future rather than trying to catch them up with current skills. This implies that alternative and innovative ways of learning must be sourced and deployed in large quantities.
1 Heitmann, W. 2000. Case Study South Africa. Systems Building and Consulting through Networking with Social Partners. Reforming vocational education and training. In W. Zehender (Ed.), Networking with Partners (pp. 99–123). Eschborn/Germany: Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ) – Division 41: Economic Development and Employment Promotion.
2 Mummenthey, C. 2010. Skills development in South Africa: A reader on South African skills development arena. Johannesburg: German Development Services (DED).
3 Statistics South Africa. 2017. Quarterly labour Force Report. Pretoria: Stats SA.
4 Bhorat, HG. 2013. Changing dynamics in the global labour market: evidence from South Africa. International Labour Office: Geneva.
5 Stats SA.
6 Harari, YN. 2015. Homo Deus: A Brief History of Tomorrow. London: Harvill Secker.
7 World Economic Forum. 2017. The future of jobs and skills in Africa, p. ii.
8 Ibid. p. 3.
9 World Economic Forum. The Future of Jobs and Skills in Africa. p.iii.
10 Ibid p. 3.
11 Davis, J. 2017. The Trends that Will Define Our Lifetime. Vanguard Investment Strategy Group, Global CFA Conference.
12 Gratton, L and Scott, A. 2016. The 100-year life: living and working in an age of longevity. Bloomsbury, p. 5.
13 Gratton, L and Scott, A. 2016. The 100-year life: living and working in an age of longevity. Bloomsbury, p. 10.
14 Hattingh, S. 2016. Skills planning for the unpredictable, disruptive Fourth Industrial Revolution. Johannesburg: Performance Improvement Solutions.