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South Africa – Adcorp: Government bungling fuelling skills shortage

16 June 2014

The shortage of skilled workers in South Africa is almost entirely due to government bungling and distrust of the private sector, according to Richard Pike, CEO temporary recruitment firm Adcorp, reports bdlive.co.za. Temporary recruitment is known locally as ‘labour broking’.

Public institutions such as the sector education and training authorities, as well as further education and training colleges set up by the government to provide skilled artisans, are failing so dismally to do their job that Adcorp has had to bring Nigerians to South Africa to fill the void.

To meet the demand from a client company for welders, Adcorp had to import workers from Nigeria. Those workers were then trained in South Africa and employed by the state-funded electricity utility to do the skilled jobs South Africans should be doing but are not being trained to do.

"We are training more artisans from Nigeria in South Africa than South Africans in South Africa?" Mr Pike demanded.

He explained: "The Nigerian government is paying for their own guys to come and train here, and so we train them. The South African government is not paying for South Africans to be trained. There is no funding coming out of the Setas (Skills Education Training Authorities) for training South African artisans. Local guys don't have access to funding."

In an ironic twist of fate, with an unemployment rate well over 25%, South African companies are being paid by foreign governments to train their people, who are then snapped up by local employers, including state-owned enterprises. South African companies, however, cannot get money from their own government to train South Africans.

Mr Pike believes there is no excuse for this: "We've got all the ingredients. Money is no object. We've got a ZAR 5 billion (USD 467.8 million) national skills fund."

The problem, according to Mr Pike, is that most of the money is not being spent. And the rest is being channelled into dysfunctional further education and training colleges that are not turning out the quality or the quantity needed.

Adcorp is expanding elsewhere in Africa and in Australia, India, and Asia, where it services multinationals involved in the oil and gas industry. Half its revenue comes from offshore where Mr Pike sees huge potential for a company that he says is ranked closely behind the best in the US and Europe in terms of labour-broking solutions.

This does not mean Adcorp is withdrawing from South Africa. Far from it: business is reportedly booming as never before.

For this, Mr Pike thanks the government. Its attempts to regulate the labour market have made it a place of fear, loathing and bewilderment for local companies that want as little to do with it as possible. And so they are turning to Adcorp.

Mr Pike explained: "We thrive on complexity and uncertainty. The more of all this, the more restrictive the labour market, the more people favour outsourcing, which is our bread and butter. The more turbulent it is the better we do."

Ambiguity in proposed amendments to labour legislation has added to complexity and uncertainty for employers, and to Adcorp's bottom line.

"We help them navigate through these treacherous waters. It is our job to understand the processes, legal interpretations and implications of these laws," Mr Pike concluded. 

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