Chapter 10 SUPPLY AND DEMAND OF IT SKILLS
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1 Chapter 10 SUPPLY AND DEMAND OF IT SKILLS 10.1 Overview Some general patterns have emerged about the supply and demand of IT-related jobs and skills in South Africa these emerged during interviews and discussion workshops (See Chapter 3 for details of methodology) as well as from the following sources: JobNavigator JobNavigator is run by Systems Publishing in South Africa ( A monthly report is produced from the JobNavigator database and statistics are calculated using the active jobs that are offered and the CVs of active candidates. The survey focuses on supply/demand analysis, as well as on available skills, and most requested skills. A relative ratio of employment demand to job-seeker supply allows employers to assess the level of difficulty likely to be achieved in finding the right candidate for a position. JobNavigator has been in existence for about three years, and has served about job seekers in the IT and related markets. The results have limitations in that: sample size is not included in the monthly reports; and the results seem skewed towards the lower level positions, with little coverage of management levels. ITWeb ITWeb is an online IT News service which is developed in South Africa ( The ITWeb online survey, the first for this site, was carried out in September/October 1998 and respondents participated in the countrywide survey. Some results are: 86% male:14% female respondents, indicating a gender skewness in the results. If this is compared with the much lower average salaries for female respondents (R versus R for male respondents) this may indicate gender discrimination in the industry. The average salary figure is not very useful since the salaries range from top-of-the-range R to bottom-of-the-range R per annum. 87% of respondents were between 20 and 40 years. 54% have tertiary education, 33% are matriculants. The Website thus attracts a high number of high-level entry candidates. CPL IT Staff Scenario Status Report This was conducted for the CPL (Pty) Ltd. recruitment agency (November 1998) ( was based on data received between May and October SAITIS Baseline Studies 109
2 1998, consulting carried out at a wide range of companies, and data from the PE Corporate Services annual IT survey. It covers an overview of supply and demand in the IT sector, as well as a salary survey. It makes fairly extensive use of the material gathered by P-E Corporate Services. The job categories are broad (programmer, project leader, etc) but what is useful is the additional information provided on salaries against years of experience, and also estimates of total package costs. Interesting comparisons are also given on a geographic basis. The following should be taken into consideration when reviewing the data: sample size is not indicated in the Web-based report; average salaries for IT and other senior managers are not reflected in this survey, nor are such factors as size of company, size of IT department, size of budget, etc taken into consideration. This may explain the generally low salary figures quoted for the CPL survey in this chapter. Vertex Annual Survey (1999) The report made available to this study is a qualitative survey conducted by Vertex Commercial Services, a Human Resource Consultancy. It is based on a skills survey of 175 IT-supplier organisations; 1998 Human Sciences Research Council (HSRC) Telecommunications Study This is an unpublished report produced in September 1998, Investigation into the Demand for and Supply of High-Level Human Resources for the Telecommunications Industry. The survey consists of four parts: a quantitative situation analysis, based on available secondary sources; an industry survey, based on interviews with 35 telecommunications and related organisations, to provide quantitative data on the telecommunications industry; a survey carried out in all tertiary educational institutions throughout South Africa, dealing with telecommunications and related aspects. This was used to complete the analysis of educational opportunities at South African Universities and Technikons; and. a consolidation of the findings Human Sciences Research Council (HSRC) Labour Study, The SA Labour Market: Future Trends and Workforce Needs. Details of this methodology are outlined in Appendix 6. JobNavigator provides a comprehensive breakdown of jobs and skills demand, whereas the ITWeb survey provides more generic information on IT-worker profiles, geographic distribution, remuneration packages and job-seeking practices in the IT and related industries. Additional data from the SAITIS questionnaire survey that was undertaken from August to November 1999, is presented separately in Chapter International recruitment No exact numbers could be found for the number of international recruitments made by companies in South Africa. The Vertex 1999 Annual Survey did show that fewer organisations SAITIS Baseline Studies 110
3 were willing to import skills in 1999, as compared to the 1998 survey. International recruitment is still seen as a short-term solution. International IT skills tend to be prohibitively expensive for the South African employer and international recruits are seldom affordable for an extended or indefinite period. Specialists therefore tend to be brought in to work on specific projects with specific deliverables. The cost of the individual is then factored into the running cost of the project. The easing of work permit requirements in the major countries favoured by South African emigrants, has also exacerbated the brain drain from the country. The highest demand from these countries appears to be for Programmers, Analyst/Programmers and Technical Specialists. There is a pool of potential immigrants with IT skills but the level of bureaucracy in securing work permits has not resulted in any significant inflows of new skills (CPL Survey, 1998) Average length of service On average, staff have spent less than four years with their present companies and have nearly seven years IT experience (ITWeb salary survey, January 1999). The 1998 CPL Survey shows that, between mid-1997 and mid-1998, staff turnover overall in South Africa was estimated at about 24%, with the lowest turnover rates in the Western Cape (19%). No further information was available on length of service Job-finding in the IT sector Of interest in the ITWeb survey is that only about 27% (324) respondents worked in the IT industry. No further indication is given of where the remaining 73% are employed but this may indicate either increased interest from other sectors in looking for IT-related jobs or that many IT skills are placed in other industrial sectors. This survey also analysed the job-finding strategies of respondents: - Newspaper advertisements 48% - Internet 23% - Headhunting 14% - Agency 12% - Personal contacts 3% What would have added value to these statistics, is if the level of job had been linked to mode of job-seeking, particularly since IT management skills do not appear to be well-represented in the sample. This is a significant gap in all the surveys accessed, since very little information is available for skills at the senior levels, nor is there significant available information on marketing and sales staff, or IT trainers Availability of IT professionals According to the CPL survey, very few new people have entered the IT industry between mid and early This means that there is a serious shortage of people with between five and eight years of experience. There has been an increasing demand for systems analysts, project leaders and managers, a finding that has been corroborated from all the sources used in this baseline study. What is also emerging is that black candidates who have been educated at private schools and from the old Model C government schools are more likely to be employed in the IT sector than those from rural or township schools (CPL Survey, 1998). This is ascribed to a better grasp of the English language and easier sociability into the industry. Likewise students from previously advantaged universities are still favoured over those from previously disadvantaged institutions, effectively resulting in a two-tier tertiary education system. SAITIS Baseline Studies 111
4 Figure 14 below, derived from the 1998 HSRC Labour Study, gives an indication of the overall distribution of IT-related occupations in various industrial sectors. IT-related occupations are concentrated in the manufacturing, finance and transport, storage and communications sectors. Figure 14: Sector Distribution by Selected Occupations Other computer sciences Computer systems analyst & related Computer Programmer Electrical & related engineering/technicians Mining & Quarrying Electricity, gas & water supply Trade Finance Manufacturing Construction Transport, storage & communication Services: government & non-government Electrical engineers 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: 1998 HSRC Labour Study 10.2 Current levels of employment in the IT industry - the 1997 October Household Survey Analyses of the 1997 October Household Survey was undertaken to determine whether any relevant data on the jobs and skills base in the IT industry could be determined. The October 1997 Household survey covered in excess of workers across the country (0,96% of total employment). Table 54 below gives an indication of the levels and spread of employment across the various IT industries and in IT related occupations, and shows that about 1% of the sample are employed in IT-related professions. Table 54 also reflects a geographic breakdown of occupations per province. As indicated elsewhere in this report, Gauteng and the Western Cape show the highest numbers of IT-related staff (17% and 40% respectively). Unionisation of IT employees is about 31%, with a predominance in the computer-related professions, as compared to the telecommunications professions. [See also Section 9.3]. SAITIS Baseline Studies 112
5 Table 54: Employment in the IT Industry in South Africa by occupation and sector SIC Code Description African Asian Coloured White Female Male Unionised Gauteng Western Cape Other Province All codes Computer related occupations: All industries All codes Telecommunications occupations: All industries 7200 Computer related industries 6420 Telecommunications , 3220, 3230, 3312, 3313 Manufacture of Telecommunications Equipment 3000 Manufacture of Office, Accounting and Computing Equipment 3130 Manufacture of Insulated Wire and Cable 5150 Wholesale Trade in Machinery, Equipment (incl. Computers) and Supplies 7123 Renting of Machinery and Equipment Financial intermediation, real estate and business services: IT related occupations Total Total Source: 1997 October Household Survey The IT occupations used in the analysis of the 1997 October household Survey are listed below. Computer related occupations Computer programmers Computer systems designers and analysts Designer, systems, computers Analyst computers: database, systems Computer assistant: communications, database analysis, engineering, programming Computer assistant: systems analysis, systems design, user services Clerk, data entry, computer Tele-typist, teller Computer assistants Computer consultant Computer equipment operators Engineer: computer applications, computer systems, electronics, computer hardware design Mechanic, electronics/ computer Operator: computer peripheral equipment Fitter, electronics/computer equipment Technician: computer, electronics, computer hardware design Technician: engineering, systems, computers Telecommunications occupations Chief executive: enterprise, communications Department manager: production and operations, telecommunications Director-general: enterprise, communications Broadcasting and telecommunications equipment operators Electronics and telecommunications engineering technicians Electronics and telecommunications engineers Operator: telecommunications equipment Engineer: telecommunications Fitter: electronics/ telecommunications equipment General manager: communications General managers in transport, storage and communication Managing director: enterprise, communications Production and operations managers/department managers in transport, storage and communications Programmer: communications Technician: engineering, telecommunications Technologist: engineering, telecommunication Technician: engineering, systems, computers Source: 1997 October Household Survey SAITIS Baseline Studies 113
6 10.3 Current and Future Supply/Demand Trends 1998 HSRC Telecommunications and Labour Studies The overall demand for South African professional, semi professional and technical personnel is expected to grow by 15% over the period 1998 to The growth rate, however, varies considerably among occupations in this broad category. A 100% growth rate among systems analysts and information communications technologists is foreseen, while the demand for all types of IT professionals will grow by at least 40% until 2003 (Table 55). Table 55: Current and Forecast Employment for Specified IT-related Professions in the Overall Labour Market, Positions Vacancies arising from Occupation in 1998 Growth in Demand Needing Filling New Demand Need for Replacement Electrical/Electronic % % 45% Engineers Electrical and related % % 48% engineering technologists/technicians Computer programmer % % 12% Computer systems % % 13% analyst & related Other computer science % % 13% (e.g. database administrator, software systems engineer, computer consultant) Source: 1998 HSRC Labour Study The rapid computerisation being experienced across all the industries is expected to result in a massive increase in the demand for IT professionals (programmers, analysts and other computer scientists). The 1998 HSRC Labour study argues that the move towards computerisation is probably the most powerful force shaping the labour market in terms of demand for occupation. IT professionals are the fastest growing class of high level occupations, as they are required to develop, install and maintain the computer systems. Banking Services The highest rate of growth (50%) in professional employment is expected in the banking subsector. This is ascribed to the rapid advance in technology in the industry, the increasing complexity of financial services and the trend towards globalisation, all of which necessitate a large increase in high-level staff. Banking is expected to be the fourth largest contributor to professional employment growth. IT professionals are one of the high-growth professional groups in the sector. Business Services The business services sub-sector, which includes the fast-growing IT industry, is expected to show a high rate (32%) of professional growth. Coupled with the fact that this sector employs such a large number of professionals, it is expected that it will be the second-largest contributor to professional growth (more than 25% of total growth). SAITIS Baseline Studies 114
7 Communications The communications sub-sector is one of the fastest growing sub-sectors of the economy riding on the back of the telecommunications sector. It is expected to be the sixth largest contributor to professional employment growth. The rapid advances in technology of this sector, coupled with the fact that it is probably the fastest growing sector in the economy, means that professional employment is likely to grow by nearly 25% over the period. This sector is expected to account for 2,4% of professional employment growth. Telecommunications The HSRC estimates that more than jobs will be created in the communications industry between 1998 and 2003 (Table 55), while the Statistics SA employment series only estimates The Statistics SA employment series only includes Telkom, the Post Office and the SABC in its communication sector figures, while excluding the non-government telecommunications sector. The latter is probably one of the fastest growing sectors in the economy and the majority of jobs created in the communications sector would arise from these companies. Therefore, the Statistics SA estimates of employment in the sector most likely underestimate real job growth. Table 56: The Telecommunications Sector Forecasts for Employment by Broad Occupation (1998 and 2003) Broad Number of Employees Composition Growth Occupation Professional ,0% 24,9% 15% Managerial ,9% 5,3% 15% Clerical/sales/ ,7% 17,2% 10% service Artisan ,8% 8,5% 3% Semi ,6% 44,1% 1% /unskilled Total % 100% 7% Source: 1998 HSRC Telecommunications Study This sector is highly capital intensive and has limited ability to create employment. Total employment is expected to increase by only about 8% over the entire period 1998 to 2003, from about to Due to the highly technological nature of the industry, rapid growth is expected in the professional category, while low growth is expected at lower skill levels. High growth professional groups include electrical engineers and engineering technologists; telecommunications engineers; and IT professionals. Lower growth professionals include electrical engineering technicians and accountants. The artisans category is dominated by electricians employed in Telkom. Table 57 illustrates that the growth is the highest among the higher-level occupations within the broad category. Exceptionally high rates of growth are expected among electrical/electronic engineers (50%), electrical/electronic technologists (89%) and telecommunications technologists (88%). The first of these occupations requires a four-year degree, while the latter two require a four-year diploma. There is significantly lower expected growth in demand for electrical/electronic engineering technicians (29%) and telecommunications technicians(5%). This may be linked to the implementation of new and more sophisticated technologies by organisations, which require high levels of technical expertise (1998 HSRC Telecommunications Study: p 18). SAITIS Baseline Studies 115
8 Table 57: Current and Forecast Professional Employment 1998 and 2003 in the Telecommunications Industry Occupation Growth Engineering occupations and related Electrical/Electronic engineer % Electronic/Electrical engineering technologist % Telecommunications technologist % Electrical/Electronic engineering technician % Telecommunications technicians % Other engineers % Other engineering technicians/technologists % IT occupations and related Computer Programmers % Computer Systems Analysts and related % Information Communications Technologist % Multimedia Developer / Technologist % Network Designer % Website Developer % Hardware Support % Software Support % Other Computer Science Occupations % Other Professional Occupations % TOTAL % Source: 1998 HSRC Telecommunications Study (adapted) Shortages of engineers were reported by most employing organisations that participated in the 1998 HSRC Telecommunications study with more than 50% of these organisations stating that they were experiencing problems recruiting professional engineers. Electrical (including electronic) engineers were often mentioned but the biggest demand was for more experienced and skilled engineers at a senior level. A quarter of the companies that employed engineering technicians experienced shortages of these skills. The need for more technicians emanates mainly from increased automation in organisations. Highly multi-skilled technicians are in demand to ensure optimum performance of electronic systems and machines. They are also needed for technical support and maintenance of equipment. Shortages in IT professionals were reported in half of the organisations that employ these people. These shortages stem mainly from organisations increased dependency on computer technology as a means to remain competitive. Shortages in certain occupational categories such as computer programmers as well as systems analysts and software systems engineers, already exist. According to the 1998 HSRC Labour report, IT shortages are not only the result of the inability of the education sector to meet the demand for skills, but also of the loss of skills to the international market. In addition, the convergence of information and telecommunication technology has resulted in new skill requirements. Another dimension of the skills problem in the IT field, is the need for experienced people at senior levels. IT is fast developing and dynamic, and most of the employees in this field are relatively young. Although they may be technically skilled, there is currently a need for professionals with more advanced human and managerial skills. This was corroborated in the interviews conducted during this study. SAITIS Baseline Studies 116
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