HR 2030: Launch of South Africa’s first labour market scenarios report
by Marius Meyer
The South African labour market has been criticised for various reasons over the last ten years. The SA Board for People Practices (SABPP) therefore decided to work with top scenario planning guru, Clem Sunter in developing labour market scenarios for South Africa. Adopting a strategic view in line with the aims of the National Development Plan (NDP), the labour market scenarios provide four possible routes for South Africa. A group of 50 senior HR professionals, together with senior HR academics convened under the leadership of Clem Sunter to develop the four labour market scenarios. In essence, the Labour Market 2030 Scenarios will provide us with a picture of HR in the year 2030. The following is the result of the working group in March 2016:
A set of Rules of the Game and Key Uncertainties for the SA Labour Market emerged from the discussions:
The items identified in the figure above derive in large part from a “changing world of work”. The next section describes some of the features of this new world.
What do we mean by “the new world of work”?
However, a clear picture of possible labour market will be incomplete without taking consideration of the new world of work. There are many publications on the nature of the new world of work and the drivers which will shape that new world. Three of these are highlighted here to illustrate the general agreement on key features of that world of work.
In the 2010 book The 2020 Workplace the authors identified three major drivers as follows:
 J.C. Meister & K. Willyerd. 2010. HarperCollins.
The UK’s Chartered Institute for Personnel and Development (CIPD), in their 2013 publication “Megatrends – the trends shaping work and working lives” identify important trends affecting the work itself, the workforce and the workplace as below:
The major shifts in the demand for well-educated people are illustrated in the 1997 book Workforce 2020 : Work and Workers in the 21st Century which uses data from the United States.
 R. W. Judy & C d’Amico, 1997. Hudson Institute
Changes in the workplace since 1997 would most probably change the demand percentages (the right hand column in the above figure) so that the 4 year college degree requirement would be higher.
Clearly, the supply situation in South Africa (the left hand column in the above figure) would be different. The White Paper of the Department of Higher Education and Training has set a target of 1.6 million students at university (from 937 000 in 2011) and 2.5 million students in TVET colleges by 2030 (from 345 000 in 2010 and estimated 650 000 in 2013). These figures represent 25% and 39% respectively. Assuming a demand situation which is less knowledge intensive than the US, it can still be seen that the gap will be extremely high.
Research by the Oxford Martin Programme on Technology and Employment has identified that new technologies are not creating many jobs; that technology has increased the range of tasks skilled workers can perform; that new “high touch” (as opposed to “high tech”) jobs are being created; and that many new personal service jobs are being created.
“With falling prices of computing, problem-solving skills are becoming relatively productive, explaining the substantial employment growth in occupations involving cognitive tasks where skilled labour has a comparative advantage, as well as the persistent increase in returns to education. The current trend is towards labour market polarisation, with growing employment in high-income cognitive jobs and low-income manual occupations, accompanied by a hollowing-out of middle-income routine jobs. However, our model predicts a truncation in the current trend towards labour market polarisation, with computerisation being principally confined to low-skill and low-wage occupations. Our findings thus imply that as technology races ahead, low-skill workers will reallocate to tasks that are non-susceptible to computerisation – i.e., tasks requiring creative and social intelligence. For workers to win the race, however, they will have to acquire creative and social skills.”
The trends identified by the CIPD imply that employees in the future will be (even) more pressurised and the workplace climate will be less supportive.
More positive qualitative aspects of the future world of work are identified by Meister and Willyerd in 2010 as below. Some of these factors are already evident in South African workplaces, whilst others are possibly less likely to emerge.
|1. You will be hired and promoted based upon your reputational capital.|
|2. Your mobile device will be your office.|
|3. Recruiting will be done on social networking sites.|
|4. Web commuters will force corporate offices to reinvent themselves.|
|5. Companies will hire entire teams.|
|6. Job requirements for CEOs will include blogging.|
|7. Your corporate curriculum will use video games, simulations and other reality games as key modes of delivery.|
|8. The world will be networked and you will need a networked mindset.|
|9. Outsourcing will be replaced by crowdsourcing.|
|10. Corporate social networks will flourish and grow inside companies.|
|11. You will elect your leader.|
|12. Work-life flexibility will replace work-life balance.|
|13. Corporate social responsibility will be a key business driver and used to attract
|14. Diversity will be a business imperative.|
|15. The lines between marketing, communication and learning will blur.|
|16. Social media literacy will be required for all employees.|
|17. Building a portfolio of contract jobs will be the path to obtaining full-time employment.|
|18. Corporate app stores will offer ways to manage work and personal life better.|
These aspects apply more to knowledge workers than other workers, for whom the new world of work could be less attractive if it is characterised also by a lack of job security and fluctuating incomes.
Whilst the actual work and workplace will change, as outlined above, the nature of the workforce itself will change, as the CIPD points out. Popular descriptions of the attributes of the so-called “millennials” concentrate on their values (civic-minded, family-focused, favour lifestyle and experience over money and prestige) and wants (being able to express themselves, constant challenge) as well as their education level. However, one aspect not often covered is their financial situation – as the result of their higher education level, millennials often start their careers carrying debt from their student days. They also face a shortage of jobs and as a result, their ability to save and buy their homes is very constrained. They are used to cheap credit. They understand that their financial long-term future is uncertain, especially as governments will be unable to fund their retirement. Hence there is often a preference to spend today rather than save for tomorrow.
Additional material on the future world of work will be sourced, developed and published by the SABPP over the coming periods.
The National Development Plan
Policy goals of the National Development plan are to:
- Maintain fiscal discipline and macro-economic stability;
- Achieve sustained GDP growth of 5.4%;
- Reduce unemployment to 14% by 2020 and to 6% by 2030;
- Overhaul the civil service to improve efficiency and implementation;
- Promote market competitiveness;
- Reduce the cost of living;
- Reduce impediments to investment;
- Create jobs via entrepreneurship and reduced regulation as well as a public works programme.
The “new world of work” trends outline above will challenge the achievement of these goals considerably, demonstrating that some creative solutions will need to be found by all stakeholders. Against the backdrop of the above discussion on the new world of work, four labour market scenarios were developed for South Africa. These scenarios will be launched at the 4th Annual HR Standards Conference of SABPP on 28 July 2016 at Vodacom World in Midrand. I want to thank all the HR leaders for the inputs into the Labour Market 2030 Scenarios Report. I am proud to launch the outcome of the working group and I trust that the document will be used as a key framework for increased levels of stakeholder engagement in considering clear options for labour market reform.
Marius Meyer is CEO of SABPP. In 2014 he launched the world’s first National HR Audit Unit to audit organisations against the National HR Standards developed by SABPP. More information about the SABPP HR Standards is available on their website www.sabpp.co.za and their blog hrtoday.me
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