Sometimes we South Africans think we experience unique challenges that the rest of the world doesn’t experience. Certainly, we have nuances and challenges which play out a little differently to the rest of the world, but I was reminded yet again after recent trips to international conferences in San Francisco and Washington, how similar the challenges are around the world. One of the challenges which for me stood out head and shoulders above the rest was the issue of talent. People. Not just any people, but people who have the skills and experience to enable the businesses they own or work in to grow and thrive. We know the small businesses sector – dubbed SGBs (small and growing businesses) by the Aspen Development Network of Entrepreneurs (ANDE) – is a key driver of economic growth and job creation in economies. We also know that typically the 3 key groups of challenges which SGBs face are access to market, access to funding and access to skills, listed in order of what is usually considered most critical and most difficult to access.
But I posit that what we are starting to see is an environment which is becoming more aware of inclusivity on the one hand and more in need of finding the “next big thing” on the other hand, and so the access to market and access to funding are potentially becoming less of an issue. We are starting to see global companies look for ways to develop their supply chains, especially since these supply chains often originate in developing countries, or the global south. We are seeing an increasing amount of capital – even if still relatively small – flowing into less traditional opportunities and spaces like “impact investing”. The truth is, there is a lot of money chasing too few opportunities in economies around the world. So if it isn’t access to market or access to funding that is a primary barrier, what is? Outside of the challenge of money flowing into the early ideation and start up business stages to create a pipeline for investment, a key primary challenge which is becoming more and more universal, is access to skills. Not just for SGBs, but for all manner of organisations, small and large. And while we often think of “access to skills” as being the technical skills required for the core business, and the business skills of the entrepreneur to lead and grow his or her organisation, increasingly “access to skills” means sufficient numbers of people within an organisation that is critical to business performance and to enabling the organisation to solidify its foundation and to scale.
While we can debate the merits of automation and Artificial Intelligence, and ponder the extent to which machines will take over some or most “jobs” that exist today, we are some way off from robots taking over the world and one thing is clear: there are 7 billion people out there, but companies are struggling to find suitably skilled and experienced resources. My observations of the discussions that are happening globally in the new economy, which in some ways is a microcosm of the broader economy, is that this is on the brink of becoming the single biggest challenge facing businesses today.
There are no doubt a wide number of reasons why this is the case. Certainly it is generally observed that the millennial generation graduating from university today overestimates their abilities and unrealistically expects to be in management tomorrow and running the business in 2 years time, which may to some extent cloud the fact that young people coming out of tertiary institutions today are a long way off being what their employers need them to be. Are we asking enough of the right questions about why? Are we considering that most universities that our next generation are attending are more suited to churning out future employees from the Baby Boomer generation, employees whose career spans 40 years working in one to three big corporates? The truth is that with the rise of technology, the pace of change in our economies and our business needs have far outpaced the rate of change in our schools and our universities, leaving us with a crucial gap between the skills that our youth have to offer and what is needed by business. By and large, there seems to be a general consensus that while technical skills may be an issue in certain industries and in certain countries (South Africa being one), it is soft skills, the ability to work in teams, critical thinking and the ability to solve problems which are the real challenge in our new “knowledge economy”.
In the absence of a shift in our primary, secondary and tertiary education systems, which might take decades to evolve, it is up to businesses to learn to better manage talent if they want to achieve expected outcomes. This means moving away from thinking of talent management as being the same as “recruiting”, which is important, but which is not the whole story. Businesses need strategies that focus on sourcing and developing talent, they need to invest time in pre-recruitment planning and while sourcing correctly is critical, it is superfluous if the business does not equally follow through on what to do with talent once recruited. Culture, learning and development, and post hire management systems like performance management, employee engagement and motivation are critical, and while large corporates often have large budgets and entire departments devoted to this activity, innovation and technology are creating affordable, scalable tools and solutions for SGBs. In addition to this is the need to rethink how to develop people. Traditionally, “training” has often meant sitting in a classroom-based environment listening to a presenter impart information, in a manner not to dissimilar to university lectures. But increasingly, indications are that “training” doesn’t really work, because this isn’t how people learn. Learning is based on practice, not content.
In thinking about the talent challenges in South Africa, and the current crises we are facing in the education space, particularly with #feesmustfall, it is clear that there is a critical imperative to the sustainability of our country and economy to find innovative solutions in this space. The Skills Development requirements under the BEE legislation in South Africa, and the compliance-based approach that many companies take to meeting BEE objectives, are creating incentives for money-making, sausage-factory training academies to spring up around our nation, often with very little impact. In my opinion, it is the innovators who develop methodologies that are cost effective and practically implementable and which can be proven to take relatively unskilled and under skilled people, especially youth, and transform them into productive members of the economy, who are not only going to contribute exponentially to society, but also make a financial killing. This will be an example of where “social enterprise” returns match or outstrip those of traditional business, and of the intersection between social enterprise and the “new economy”, which is less extractive, more inclusive, customer-centric and focused on solving economic and societal challenges in a socially and environmentally responsible way.