South Africa is known all over the world for its natural beauty, its mineral resources and (sometimes) its sporting prowess. Now we are also becoming known as the place to go for cost-effective skills.
Netflix is the latest multinational investing in a South African skills base, joining giants like Amazon and Microsoft who have advertised hundreds of posts this year alone.
One international recruitment agency has placed South Africans at more than 150 US and British companies. With multinationals increasingly tapping into South Africa’s talent pool, why are so many South African companies overlooking or undervaluing local talent?
South Africa’s skills base is made up of highly educated, English-speaking, adaptable professionals, many of whom are a far more cost-effective hire for international companies than their counterparts in the US or Europe.
Some organisations looking for cost efficiency have also set up shop in South Africa, where our time zone makes it easy to service a large part of the world, and where operational costs are lower than in many other countries.
Unfortunately, the regulatory landscape is making it much easier for multinationals to move South African skills overseas than it is to invest in them locally, resulting in the growing skills gaps we are seeing in sectors from technology to finance and professional services.
This situation is a symptom of a larger problem, where skills, money and investment are streaming out of the country instead of into it.
Blind spot
South African companies are no strangers to building external capabilities instead of strengthening local pipelines, particularly when it comes to technology. Most local organisations have invested a great deal of their IT spend into international solutions rather than homegrown ones, and many have started moving their operations overseas.
Dollarising their expenses in this way leads to long-term losses for the South African economy. Not only does it result in a shrinking tax base, it adds risk to business operations through political and exchange rate uncertainty on a very high expense base item, technology spend.
We need to ask why global players are recognising value in South African skills and services where local corporates do not. Multinationals are increasingly hiring South African talent, building delivery hubs and leveraging our cost advantage to strengthen their competitiveness, and we are doing the same, just in other countries.
Read: Warning that AI could hit first-time jobseekers hardest
These challenges can be turned into opportunities. South African companies have a chance to de-risk their businesses, reduce costs and build resilience by investing in homegrown talent and solutions. In doing so, they’ll not only strengthen their own competitiveness but also contribute to a more robust and inclusive economy. In other words, it’s time to see – and invest in – South Africa before global players outpace us in recognising the value sitting in our own front yard.
- The author, Richard Firth, is CEO of MIP Holdings
