Professionals needed for the renewal of financial services
Increasing shortages of professional skills in the local financial services sector almost guarantees that South Africa will have a sluggish recovery in the financial sector of 2011, despite advances in employment, gender equality and increases in graduate and technical training.
According to the findings of the Landelahni Recruitment Group’s Financial Services Survey 2010, there is a shortage in every area related to skilled and professional staff, with auditing firms estimating an 82% shortage of chartered accountants.
In South Africa, a total of 60 114 accounting students graduated with degrees or diplomas over an 11-year period from 1999 to 2009, averaging 5 465 graduates per year.
Over the same period, banking and finance graduates amounted to 5 618 (511 per year) and insurance and risk graduates amounted to 709 (65 per year). This amounted to a total graduate number of 6 041 per year.
However “this is not enough to meet demand, particularly since the financial services sector is competing for these skills with businesses across the board,” said Sandra Burmeister, Landelahni CEO.
Between 1999 and 2009, the total number of university enrolments in accounting was 504 068, against 60 114 degreed graduates over the same period—an 11,9% pass rate.
Gender and race numbers reaching desired levels
Over the past 10 years, accounting graduates across both universities and technikons were predominantly black, followed by coloureds, Indians and whites. From a gender perspective, female accounting graduates dominated, numbering 5 734 (58%) in 2009, against 4 327 males.
Contrasting sharply with qualified chartered accountants where women accounted for only 23% of the total.
Adding to South Africa’s skill shortage, according to Burmeister, is the high demand for professionals in the sector overseas.
A recent international survey in 17 countries covering 5 000 companies, found that 56% of these countries experienced difficulty in finding skilled financial candidates.
In the UK, one of the largest global financial services markets, some 50% of employers reported shortages of qualified accountants and accounting technicians. And, according to the Association of Chartered Certified Accountants, “The UK is on the brink of a financial professional’s skills crisis”.
“For several years, South Africa has lost accounting professionals, along with auditing, risk management and economics professionals, as well as engineers and information technology specialists, all of whom are in short supply around the world, and subject to offshore poaching by developed and developing economies. These professional skills are highly mobile and in demand across all business sectors globally, not only in financial services,” said Burmeister.
The evidence of this lies in the 30 000 drop of employees in financial services that occurred from June 2008 to June 2009 as shown by Fasset—the accounting and financial services SETA that predicted continued shortages of professional skills in the sector.
Professionals increasingly mobile
According to the World Economic Forum’s 2010 Global Skill Shortage report, skilled professionals are increasingly mobile globally.
The South African Institute of Chartered Accountants (SAICA) experienced its highest number of registrations in 2009, with a total of 29 671 chartered accountants registered with SAICA in 2009, compared to 20 903 in 2002—an increase of 42%.
This total is made up of 18 654 whites, 2 259 Indians, 1 347 blacks and 589 coloureds.
Of these 16 426 are male, and 6 462 are female.
Some 22 888 accountants are working in South Africa, and 6 783 (23%) are working offshore.
Those working outside the country are predominantly white but, since 2002, blacks working offshore increased threefold from 32 to 104.
The only way to move forward
With the current skills shortage likely to become much worse in the next 10 to 15 years, how do employers focus on developing the type of quality leadership that will be responsible for creating and leading a sustainable sector in the long term?
Burmeister said bringing that kind of mobility that young professions long for in-house may be the only way. More and more companies are recognising that and moving in that direction.
“If you are not a global company now then companies can partner with other companies and do skills swaps.”