AEI May 2011 

Salient features

• Employment increased slightly, at an annual rate of 1.86%, during April.
• Unlike March, when employment increased across-the-board, employment growth was patchy and uneven during April. Employment grew fastest in the high-skilled occupations (senior management, professionals, and technicians) and continues to decline in the low-skilled occupations (elementary and domestic work).
• Continuing a long-term trend that has been in evidence since 1995, the informal sector grew faster than the formal sector during April, largely driven by small-scale employers opting out of income taxes and labour regulations. The informal sector now employs 6.2 million people – 1.5 million (or 31%) more than in 1995.
• In this month’s analysis, we take a closer look at the shortage of high-skilled workers in South Africa. Using data available to Adcorp (such as recruitment lead times, applicant/job ratios and job fill rates), Adcorp calculates that there are currently 829,800 unfilled positions for high-skilled workers across a wide range of occupations, including senior management, the professions (medicine, engineering, accounting and the law), technical occupations (specialized technicians and artisans), and agriculture. To a great extent, the shortage of high-skilled workers has been artificially induced by the Immigrations Act (2002), which made it exceedingly difficult for foreigners to find work in South Africa. The most recent amendments to the Immigrations Act, promulgated in April 2011, prohibit the use of immigration agents and quota work permits, both of which have historically been widely used by South African companies seeking foreign skills. As a result, South African citizens’ wages in high-skilled occupations have been unduly escalated, in inflation-adjusted terms, by 286.4% since 2000.

Download full report