The Rise and Fall of the Job Market in South Africa

Whilst a small percentage of South Africa’s larger telecommunications and technology companies have increased their respective staff headcounts in the first half of this year, a recent MyBroadband analysis revealed that close to 11,500 jobs had been lost in this sector alone (see Table below).

MyBroardband’s analysis is in line with a recently released report from PwC, which stated that South Africa had lost something in the order of 1.4 million jobs in 2020. This is an alarming statistic.

“There were some seasonal factors involved, with the first quarter usually seeing the end of temporary holiday jobs in, for example, the retail sector,” said PwC.

“Nonetheless, the official (narrowly defined) unemployment level in South Africa climbed from 32.5% in 2020-Q4 to a new record high of 32.6% in 2021-Q1.”

PwC said that this latest reading of South Africa’s unemployment rate was the second-highest up-to-date unemployment reading in the world after Bosnia & Herzegovina, with both countries recording unemployment rates of 33.4% in 2021-Q1.

As bad as the situation in South Africa is, PwC said that the increase in the unemployment rate was less than economists had feared.

“This is attributed to some 200,000 people who were looking for work in 2020-Q4 shifting to the discouraged workers category — in other words, they have given up on finding a job by 2021-Q1,” it noted.

“These people likely lost their jobs during the strictest levels of lockdown last year and were searching for a new job during the second half of 2020,” said PwC.

“In the absence of success, they have given up on again finding employment — and giving up means you are not included in the unemployment rate calculations.”

As a result, South Africa’s expanded unemployment rate, which includes discouraged workers, increased from 42.6% in 2020-Q4 to a staggering 43.2% in 2021-Q1.

Stated differently - one in twelve jobs were lost compared to a year earlier.

“This will compound the existing challenges seen prior to the pandemic in creating enough value-adding jobs in South Africa,” PwC stated.

PwC commented last year that the country’s key challenges (poverty, unemployment, and inequality) had become more severe as a result of the Covid-19 pandemic, and to address them would require the government to take an entirely new approach. A paradigm shift in the collective thinking I would submit.

It is, however, not all bad news, PwC said.

“Our economic forecasts suggest South Africa will recover 444,710 jobs in 2021,” it said.

However, this number could have been closer to 650,000 had it not been for the impact of load-shedding.

To see how technology jobs in South Africa have been impacted, MyBroadband looked at the latest employee information disclosed in the financial reports of JSE-listed ICT companies and state-owned enterprises (SOEs).

The following table summarises the findings of MyBroadband’s analysis.

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