HR Pulse

Strategic HR can improve the lot for new generations

There is a huge potential for generation Y and Z – young people born in the 80s and 90s – to play a positive role in building a much-needed new business environment in South Africa. However, they make up the majority of the unemployed in the country…

Speaking to a delegation from Utah State University that was in SA to learn more about global HR issues, Linda Ronnie, organisational behaviour and people management lecturer at the University of Cape Town’s (UCT) Graduate School of Business (GSB), said that 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,” she said. 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-graduate, 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 change;
• 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. These sectors require priority skills, which suggests a possible mismatch between supply and demand and adds to growing inequality.

There are more unemployed black South Africans than white South Africans

The unemployment rate among the black population is at 46.3% as there is relatively low access to employment opportunities. The black population has the lowest labour absorption rate, among the South African population, of 34.6%. In contrast, white South Africans have the highest household annual average income of R365 134 – six times more than the black population - yet white South Africans 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 generations Y and Z. Unfortunately, these are the groups that the new business environment desperately needs because they bring technological know-how and fresh thinking to the workplace. In addition, they are generally turned on to emerging trends, but they are also the most misunderstood part of the population,” said Ronnie.

Research by Wits University shows that young people from poor neighbourhoods - having had bad schooling and little support, and having grown up in environments where multi-generational unemployment is the norm - are likely to spend their lives unemployed. And the sad truth is that many are resigned to this.

Unemployed youth will only go for high salaries

Complicating things is that research by the Centre for Development and Enterprise last year shows that most of the unemployed Y and Zs will only consider employment they see as having high salaries attached as worthwhile. In other words, they would only consider entering employment which would give them a salary high enough to support marriage and household bonds. 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,” said Ronnie. Research at UCT showed that networks and connections play a pivotal role in employment among young people.

Government can also play an important role in addressing skills shortages and unemployment challenges

It can do this by:

• Focusing on FET colleges in manufacturing, engineering and technology sectors;
• Reviving apprentice schemes; and
• Ensuring improved roll-out of technology 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. This should be a national mission,” Ronnie said.

“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,” said Ronnie. “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 supply to the demand for skills properly, it can save the ‘lost’ generation while increasing the chances of new ideas surfacing in the economy while improving the competitiveness of South African business in the global business environment.”