Generation Y and Z young people born in the 80s and 90s have huge potential to play a positive role in building a much-needed new business environment in South Africa, yet they make up the majority of the unemployed in the country.
Government and business must join together to nurture this crucial segment of our population.
Speaking to a delegation from Utah State University that was in SA to learn more about global HR issues, the work environment in South Africa poses unique challenges and business needs to adapt to these if they want to be successful here.
Many of the challenges we face in this country are global ones. The World Economic Forum annual meeting in Davos last year highlighted these challenges: job creation; growing demand for high-end human capital; growing income disparity between university-graduated white-collar workers and the less fortunate; and the need for strong leadership in building and sustaining human development.
But in South Africa these challenges are intensified by massive political, societal, and economic change, huge income disparities, increasing youth unemployment, and HIV/AIDS in the workplace. Skills shortages, especially in nursing and education where 22.8% and 20.6% more skilled workers are needed respectively, have left 300 000 vacancies across various sectors that require priority skills, suggesting a possible mismatch between supply and demand adding to growing inequality.
The unemployment rate among the black population is at 46.3% with relatively scarce access to employment opportunities, recording the lowest labour absorption rate of 34.6%. By contrast, white South Africans have the highest household annual average income of R365 134 six times more than the black population yet whites make up only 10% of the population. With only an unemployment rate of 10%, this population’s absorption rate into the workplace is as high as 70%.
The groups hardest hit by unemployment are generation Y and Z, and these are the groups that the new business environment desperately needs because they bring technological know-how and fresh thinking to the workplace, and are generally turned on to emerging trends, but they are also the most misunderstood part of the population.
Research by Wits University showed that young people from poor neighbourhoods, having had bad schooling and little support and having grown up in environments where multigenerational unemployment is the norm, are likely to spend their lives unemployed many are resigned to this as a reality for them.
Complicating things, research by the Centre for Development and Enterprise last year shows, is that most of the unemployed Y and Zs will only consider employment that is seen to be gainful in terms of salaries salaries that are high enough to support marriage and household bonds as worthwhile opportunities. This research found that menial work is not an option for these generations.
Opportunity really is everything and access to networks and other platforms for entering into the opportunity market is very important. Research at the University of Cape Town showed that networks and connections play a pivotal role in employment among young people.
Government can also play an important role in addressing the skills shortages and unemployment challenges by focusing on FET colleges in manufacturing, engineering and technology sectors, by reviving apprentice schemes, and by ensuring improved technology roll out as the majority of the population has no access to the internet.
Business, should be aiming to build trust with communities, ensure inclusivity and diversity in the workplace, partner with unions in skills development, and build scarce critical skills.
Both private and public enterprises should bolster their HR practices to help with this, what should be a national mission.
All efforts between government and business should be aligned to see that future generations enter school, finish school, and then enter the necessary networks and the workplace successfully. And all efforts should be made to court, develop and retain generation Y and Z in the workplace.
And once this country has solved the conundrum of how to properly supply to the demand for skills it can will save the ‘lost’ generation while increasing the chances of new ideas surfacing in the economy improving the competitiveness of South African business in the global business environment.
Linda Ronnie is the Organisational Behaviour and People Management lecturer at the UCT GS.