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Business needs to contribute to the development of South Africa’s human capital

As the full horror of the Haitian earthquake becomes apparent to people around the world, questions are being asked about the status of this failed nation.

Prior to the natural disaster, Haiti’s infrastructure was not able to support its citizens in any way resembling the comfort and safety that other Western nations enjoy. This poorest of countries has been plagued by civil unrest, low life expectancy and a daily struggle for survival of the island’s nine million inhabitants.

One of the contributing factors to Haiti’s status as the poorest nation in the western hemisphere is an extremely low rate of literacy. According to the internationally respected CIA World Factbook, 52.9% of people over the age of 15 in the country can neither read nor write.

In today’s technology-driven global economic environment, this figure is startling and gives a good indication of the vicious cycle of failure and crisis which has characterised the ongoing development of this Caribbean nation.

The inequality between the moneyed class and the uneducated lower class is striking. In Haiti, there is no middle class – you are either wealthy or live a life of poverty.

“The situation in South Africa is not as dire,” says Eduloan chief executive officer Johan Wasserfall, “but there are similarities that are striking. The effect of 40 years of Bantu education has contributed to the development of a generation without the basic literacy skills and further education opportunities required to successfully develop our nation.”

According to research done by the United Nations Educational, Scientific and Cultural Organization (Unesco) Institute for Statistics (UIS) in April 2007, approximately 17% of South African adults are functionally illiterate.

The effects of years of educational neglect still are being felt at every level of society – and business is no exception.

Research published in the Grant Thornton’s 2009 International Business Report indicates that a shortage of skilled labour is of greater concern for privately held businesses in South Africa (17%) than it is globally (5%); and that 41% of private businesses in South Africa view lack of skills in the workforce as the greatest inhibitor to business growth.

Wasserfall adds, “Business is clearly concerned about the skills shortage in South Africa and it is of the utmost urgency that we facilitate access to education and skills development if this country is to remain globally competitive.”

This is a view that is not exclusive to corporate South Africa.

A shortage of skills has been recognised by the South African government as one of the primary obstacles to achieving its goal of 6% growth per annum, essential if South Africa is to eradicate the inequalities and social divides completely and provide its citizens with the skills that will drive this economy forward.

It has become apparent that the government alone cannot correct the massive skills deficit in South Africa; it simply does not have adequate resources.

Although the investment in education has tripled since 1994, and 90% of children are in school, there is still a massive deficit in the skills the country requires in order to achieve its goals in infrastructure development and private investment.

The answer is, of course, that the private sector must assume some of the responsibility for education, training and development.

“If business does not contribute meaningfully to the development of South Africa’s human capital, then this country is going to fall short of providing its people with the opportunities for human dignity that are enshrined in our Constitution,” says Wasserfall.

The current global economic downturn makes the contribution of business to the educational and economic upliftment of South African citizens even more urgent.

As the macro-economic pressures build, so does the urgency of ensuring that the shock absorber of education is in place. Only through an educated and committed workforce can South Africa hope to thrive in these troubled times.

The positive implications of a skilled workforce are well known. A skilled workforce is more productive, it is more loyal to the company, employee morale is improved, employee absenteeism is reduced and employees enjoy a better work/life balance.

Wasserfall adds, “The fact of the matter is that by investing in the education of its employees, business lays the foundations for its own success. An educated populace is one that is able to access more resources, and the sale of more resources domestically can to some extent offset the turmoil of the global recession.”

However, perhaps the most pressing reason that business needs to become involved in upskilling South Africa’s workforce is the fact that education is a social imperative. Without skills that contribute meaningfully in such areas as engineering and science, South Africa will continue to occupy that space between the first and third world; and the middle – as any military strategist will tell you – is a very dangerous place to be, indeed.

In the middle, economic pressure mounts as poorer nations, where goods can be produced at lower prices, flood the market with cheap goods and there is competition from more developed nations for the supply of value-added or intellectual property goods and services.

The contributions of business can narrow the gap between the rich and the poor and the skilled and unskilled, contributing to South Africa’s achieving first-world status.

Aside from the positive economic impacts of education, the narrowing of this skills gap is believed by many sociologists to be the key to reducing crime and solving many of the social ills that currently plague South Africa, such as violence toward women and children and the impact that Aids is having on communities across the nation.

“South Africa simply cannot continue its approach of business as usual. All our businesses need to start programmes of upskilling our workforce before the snowball effect comes into play. We’re fast approaching a tipping point where intervention is going to be less and less effective.

“Business owes it to South Africa to become actively involved in the upliftment of skills and making access to education for both employees and their children a priority,” concludes Wasserfall.

A number of South African businesses are heeding this call. These businesses have chosen to prioritise education and are funding and rolling out Adult Basic Education and Training programmes to ensure that the issue of illiteracy is addressed, but they also are making funds available to employees to further their studies in a wide variety of fields.

Companies are either paying outright for studies or are making funds available on a contingency basis, writing off loans when employees achieve certain grades.

Sensitive to the work/life balance, companies also are enabling employees to study during business hours and are becoming more open to the idea of flexi time, which makes further study much easier.

Furthermore, companies are assisting learners in obtaining loans for themselves or their children, such as those offered by Eduloan.

If the current commitment toward upskilling and further education by business in South Africa continues, there is more than a glimmer of hope that illiteracy will become a thing of the past within a generation and that South Africa will be producing the engineers, artisans and scientists that will allow the country to take its rightful place on the world stage and avoid the social, political and economic fate of a country such as Haiti.

“The symbiotic relationship between business, the government and community is one that needs to be nurtured if South Africa is to deliver on its mandate to its people, which is a better life for all,” concludes Eduloan’s Wasserfall.

About Eduloan

Through partnerships forged with the government, corporates and South Africa’s tertiary education institutions, Eduloan facilitates the automatic deduction of study-loan repayments directly from the salary of its students or their sponsors, over to their institution of learning.

Eduloan is focused on empowering South Africans through learning, and in so doing, building a globally competitive nation by creating access to further education.

Jessica Wheeler

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