The ‘brain drain’ is becoming a significant challenge for an increasing number of South African companies, as skilled workers and top talent leave the country at an alarming rate. While the exodus of talent can be attributed to a number of factors, the impact on organisations is fairly universal as they struggle to fill their ever-widening skills gaps from a constantly shrinking SA talent pool.
Now, this worrying trend is the subject of a newly released white paper, entitled “South Africa’s Brain Drain: Towards Fresh Conversation for HR Leaders”, produced by innovative global employment solutions provider, Playroll.
According to the UN Department of Economic and Social Affairs, 914 901 South Africans had already settled abroad by the end of 2020, with a significant uptick in the rate of emigration after 2015. This trend has continued – and even accelerated, threatening the national tax base, according to one of the largest banks in the country. And while this outflow of talent is a particular challenge for SA businesses operating in the tech sector, the research found that close to 80% of all South African business leaders surveyed consider the emigration of top talent, particularly C-suite leaders and managers, as a critical risk factor for their organisation.
The research behind the white paper also points to those aged between 25 and 40 years of age being the most likely to leave the country, and possibly more concerning, over half of South Africa’s graduates having the potential to emigrate in the future.
However, it’s not just young people who are joining the exodus or ‘brain drain’. The paper highlights that senior employees are more likely to relocate, probably because they have the financial means to do so.
According to Simonetta Giuricich, Chief Operating Officer for Playroll, the organisational challenge of skills losses due to emigration is exacerbated for many companies by the fact that many skilled and qualified professionals who are choosing to stay in the country are now taking advantage of the remote work opportunities provided by global organisations.
“Not only are corporates losing key individuals to emigration, and struggling to replace them,” Giuricich explains, “but the widespread acceptance of remote work arrangements means many skilled South Africans are not available for local employment because they are able to access high-paying work opportunities with international companies, while still staying in the country.”
She emphasises that the loss of employees to emigration not only creates immediate gaps in the skills and qualifications required by an organisation, but could also lead to entrenched competitive challenges in the longer term,” Giuricich says, “which is why it is imperative that SA businesses embrace effective, scalable ways to retain their top talent.”
And she points out that there are proven ways to do precisely that.
“While the emigration and remote work trends identified in our white paper are concerning for SA businesses, it’s not all doom and gloom,” she says, “in fact, there are ways in which SA companies can put the lessons from these trends to good use in their own organisations to retain their talent and even attract new skills from the global talent pool.”
She explains that, since the reasons given for emigration typically extend far beyond income, simply offering to raise an individual’s salary is unlikely to prevent them from wanting to leave the country. Rather, Playroll’s research points to other non-pay-related incentives – like flexible work policies and greater autonomy – that businesses should consider offering. And even if those aren’t enough to stop people from emigrating, that doesn’t have to mean that a company has to lose them as employees, because they could, in fact, take their job with them when they go.
“It’s important for business leaders and HR executives to realise that there are many instances where they can’t stop a key employee from leaving South Africa, but they can keep him or her on as employees,” she says, “which is a solution that Playroll has become particularly adept at implementing for a growing number of leading SA companies.”
Giuricich explains that Playroll operates as what is known as an ‘employer of record*’, which essentially means that the company partners with its business clients to address the emigration of their key people through innovative talent relocation solutions that leverage the factors that matter most to those employees.
“Partnering with an Employer of Record platform, like Playroll, is a highly effective way of addressing the threat posed by the emigration of skilled workers,” she says, “because an EoR enables the business to effectively retain their experienced South African talent when they leave the country, and possibly even attract foreign talent, all without the need for costly and resource intensive process of establishing a foreign legal business entity.”
“The bottom line is that there is a way for South African businesses to win the global talent mobility game and stop, or at least reduce, the impact of talent relocation,” Simonetta says, “all it takes is the will to do so, and of course a partnership with a forward-thinking employer of record wouldn’t hurt – preferably one that has the global infrastructure and experience to go beyond merely plugging the brain drain, and instead leveraging international talent retention and acquisition opportunities to protect and grow their teams.”
For further information visit www.Playroll.com , or follow us on https://www.linkedin.com/company/playroll-hr/
*What is an Employer of Record?
An employer of Record (EoR) is a company or organisation that assumes responsibility for the management of certain employment-related functions on behalf of another company. This means that the EOR assumes all legal obligations and responsibilities associated with being an employer, such as paying salaries, benefits, and taxes, managing payroll and benefits administration, and ensuring compliance with labour laws and regulations.
EoRs are typically used when a company needs to hire or retain employees in a foreign country, but does not want to establish a legal entity in that country. The EoR can act as the legal employer of the foreign employees, ensuring that the company can avoid having to navigate the legal and administrative complexities of international employment.
