Brain drain circles the plughole in IT
Digital skills shortage dire as SA workers are lost to global market
● SA is haemorrhaging critical skills, says Innocent Dutiro, CEO of workforce management company Adcorp, which recruits people with IT and digital skills for its clients.
Finding such people is a growing challenge, says Dutiro, who was brought in 18 months ago to bring the ailing company back from the brink.
Adcorp runs one of the largest digital training businesses in SA, dedicated to producing the specialist skills the country requires to be internationally competitive and grow the economy.
Digital and IT skills are what Adcorp's clients, which include the major banks, increasingly need.
“We’ve got an IT contracting business where we struggle to fill the requests that come from our clients because the skills here are in such short supply, and the demand for these skills is global.”
Adcorp has a similar business in Australia, and many of the IT professionals it supplies to Australian companies are from SA.
They’re leaving the country in growing numbers because conditions in SA are pushing them out and their skills are in high demand internationally.
“We have to source IT skills from the global pool. We’re competing for South African skills against countries with stronger currencies,” Dutiro says.
“Our first objective should be to try and retain our own skills because we’re losing those to other markets.”
To do that, the government needs to create a better social environment because the people who are leaving cite this as a major reason.
“We live in an abnormal society,” says Dutiro.
The exodus has a big impact on the salaries his clients have to pay to keep South African skills in SA.
In spite of shelling out big time, it’s a losing battle.
Because of the shortage, they’re having to employ people who don’t have the right level of proficiency to execute on their strategies, he says.
“You probably don’t realise it if you’re in a competitive environment such as a bank because all the banks are facing the same issues, but looked at on a global scale, your ability to roll out digital strategies is constrained by the lack of skills.
“Our recruiters have to know where these people are so we can access them when we need them. And take good care of them, because they’re an endangered species.”
The shortage is compromising the international competitiveness of South African companies, he says.
“Our clients tend to modify their strategies to fit the supply.”
They’re having to compete globally for South African skills in order to remain internationally competitive, and it’s having an impact on the bottom line.
He says government policy makes it “more difficult than it should be” to bring much-needed skills to the country, “but there are much bigger problems than that which need to be addressed”.
“You’re talking about making it easier to bring people into the country in a situation where you’ve got 28% unemployment.
“Which means that the bigger challenge is the skills content within your own population.”
In Australia, where unemployment is at 4%, they also need to import skills — but for very different reasons.
“They have a shortage because almost everyone is employed and they’ve exhausted their skills. They need more. For them, immigration is the only source of extra skills.”
SA’s skills shortage is the result of push factors such as crime, and a dysfunctional education system, both of which speak to a failure of government.
“Our skills shortage goes back to our education
Our skills shortage goes back to our education system. We’re not producing trainable people Innocent Dutiro
Adcorp CEO
system. We’re not producing trainable people. I don’t subscribe to the view that you need to have professional skills on the curriculum in schools. You actually need to have a strong foundation of basic education: maths, science, English, the ability to think, cognitive skills, and so on.”
His favourite example of the way to go is Singapore. “With no resources, the only thing they’ve invested in is education.
“If you get on to the metro in Singapore they’re advertising maths tutors on the train. For them, it’s actually hip to be a maths whiz,” he says.
“That’s where we need to go. Because if you do that your population is able to take decisions, to find skills that would enable them to be more mobile.
“At the moment, we have people who are unemployed, with no skills. They’re just waiting for hand-outs because they can’t do much for themselves because they don’t have an education.”
Dutiro, 55, was educated in Zimbabwe, and has an MSc in mechanical engineering from Manchester University in the UK and an MBA from Wits University.
He has held senior leadership positions at Deloitte, Nedbank and South African Breweries and was chief executive of Africa and India at MMI Holdings before being brought in to Adcorp, where he has implemented a three-phase strategy to fix, stabilise and grow the business.
Last week, Adcorp announced a net profit after tax of R262.1m in the year to end-February, from a loss of R561m the previous year, the first time it has turned a profit in three years.
Dutiro brought in a “completely new” operating model and simplified and integrated the structure.
“We had to do a lot of work on the culture because different brands under Adcorp saw themselves as completely different organisations and did their own thing.
“We now go to market as a group. We had instances where two of our brands would be competing against each other for one client.”
His target is to treble earnings to R1bn by 2022. Earnings have grown from R387m last year to R518m, “so we’re halfway”.
The share price has grown from R18.62 in October 2018 to just under R25. This is down from a high of R45, but Dutiro prefers to look at it as up from a low of R11 when he became CEO.
He says he doesn’t obsess over the share price. “I’m more of the philosophy that if we do the right things and create value, the market will reward us.”