Angst over Talent
PricewaterhouseCoopers’s 16th Annual Global CEO Survey is a sobering comment on the availability of skills at a time when businesses desperately need to create and sustain growth. More than half of CEOs around the world say a lack of key skills is hampering their growth prospects. They acknowledge the need to refocus their business cultures along more ethical and people-oriented lines, but want governments to make the creation of a skilled workforce their highest priority for business for the year ahead.
Headlined “The Talent Challenge: A Time for Extraordinary Leadership,” PwC’s findings shine light on the dilemma of business leaders trying to navigate the click-and-tap speed of a market landscape dotted with areas of rapid growth and areas of stagnation, where the supply of talent doesn’t meet demand, and where public trust in businesses and their leaders is so low that it exacerbates the migraine task of attracting and retaining the best of a shrunken talent pool. PwC conducted 1,330 interviews with CEOs in 68 countries between Sept. 5 and Dec. 4 in 2012. Of these interviews, 449 were conducted in the Asia Pacific region, 312 in Western Europe, 165 in Latin America, 227 in North America, 95 in Central and Eastern Europe and 82 in the Middle East and Africa.
Nowhere is the skills shortage more acute than in the fast-growing markets of Africa. There, a whopping 82 percent of the CEOs surveyed say availability is a problem. Moreover, 77 percent of CEOs in Africa now label social responsibility, the underpinning of a talent-attracting public image, a priority.
Others have alluded to the skills challenge in Africa, where, by 2040, the world’s largest population of working-age people will reside. Writing last December in T. Rowe Price’s Connections, former U.S. ambassador to Nigeria John Campbell stressed that “an educated workforce” is crucial to sustaining the continent’s consumer revolution and attracting foreign investment. Addressing the problem through good educational policy is not necessarily a problem of money, notes Campbell, who currently is the Ralph Bunche Senior Fellow for Africa Policy Studies at the Council on Foreign Relations in New York. He explains: “In the decade after 1996, South Africa spent almost a quarter of its budget on public education. (In 2012, South Africa budgeted U.S.$24 billion.) Yet it fails to prepare Black youth for entry into a modern workforce; their unemployment rate approaches 40 percent while potential employers complain about skills shortages. In Nigeria, an exploding population is producing a time bomb of unemployable youth in Kano, Kaduna and Maiduguri, where globalization has interacted with domestic factors to collapse the textile industry. Already, some [of these unemployables] support Boko Haram, the radical Islamist group that is destabilizing the Nigerian state, and the Nigerian educational system remains an underfunded mess.”
Even so, while CEOs agree that Latin America and South East Asia are the regions most likely to deliver growth, many are beginning to turn their attention to Africa, with almost three-quarters of them revealing that they expect to pursue opportunities on the continent this year. Of CEOs with key operations in Africa, 74 percent say they expect these operations to grow in the next 12 months, the third-highest percentage after Latin America and Southeast Asia (81 percent each) for all of the regions named in the survey (the above three plus North America, Western Europe, East Asia, CEE/Central Asia, Australia, Middle East and South Asia). Another 20 percent say they expect their key operations in Africa to stay the same in the next 12 months and only 4 percent, the lowest for any region, say they expect their Africa operations to decline in the next 12 months. Meanwhile, 22 percent of CEOs in Western Europe said they expect their key operations in that region to decline during 2013.
And on the question of hiring, 27 percent of CEOs in Africa say they plan to increase headcount this year. That’s not as many as in India (66 percent), China and Hong Kong, (36 percent) Russia (34 percent) and Japan (28 percent), but it’s more than in Brazil, (25 percent), the United States (23 percent), Britain (10 percent).
An abundance of industrial resources and improvements in economic management, institutions, infrastructure, a growing middle class, democracy, the rule of law, poverty levels and disease eradication are the topics that animate the conversation about Africa’s growth prospects and business attractiveness. Often absent from the excitement chatter, however, are the vision, policies, leadership and vehicles of governments and business alike to address the continent’s talent gap.
The angst over this gap should be short-lived, given the continent’s enormous pool of human resources and a largely untapped repository of skills in the Diaspora. It will endure, however, as long as the “extraordinary leadership” that PwC says is needed remains a no-show.