Skills degradation and obsolescence caused by long periods of unemployment need to be addressed

It can take up to 6 months or more to find a job during a period of unemployment. Globally, on average, the unemployed are experiencing longer periods of joblessness than before the financial crisis. Employers are favouring the newly unemployed when jobs do become available. This increases the risk of skills degradation and obsolescence. The resultant skills mismatch has the effect of discouraging work seekers from looking for work. The ILO Global Employment Trends 2014 Report calls for governments to implement active labour market policies to address this inactivity and skills mismatch.
Labour market policies to attract discouraged workers could include:
• Public and private sector matching of discouraged workers with available employment opportunities;
• Incentivize discouraged workers to re-engage in the labour market through investment in their upgrading and re-skilling which includes entrepreneurial skills programmes and vocational training; and
• Promote skills development in order that workers gain skills that are in demand in the labour market.
Research conducted by the Insurance Sector Training Authority (INSETA) shows that many workers in the insurance industry chose to take voluntary packages and resign during the economic downturn. At the same time, increased professional requirements to be FAIS ‘fit and proper’ contributed to the loss of skilled people from the sector. INSETA participated in the Training Layoff initiative spearheaded by the UIF, but was hampered by the fact that there were no large scale retrenchments in the insurance industry. Retrenchments took place in small pockets, and were often anticipated by voluntary resignations. A small number of workers who were identified for retrenchment participated in INSETAs’ retraining initiatives. They were funded on customised insurance skills programmes that were in demand in the labour market. This facilitated their successful re-entry into the labour market.

The most recent Quarterly Labour Force survey shows that there is a 24.1% unemployment rate which excludes discouraged work seekers. Discouraged work seekers make up over 2.2 million of the population. A discouraged work seeker can be defined as an unemployed worker who is not actively looking for employment. They are available to be employed however, they have looked for employment for a year or more and are no longer job hunting because they believe that there are no job opportunities available for them.These discouraged work seekers are a symptom of a labour market that has been deeply scarred by the financial crisis. In today’s rapid changing world most employers do not have the time or will to train unemployed work seekers who have obsolete skills, thereby contributing to the vicious cycle of long term unemployment and other societal ills. In a country like South Africa, this perpetuates inequality as historically disadvantaged work seekers do not have the resources to recover from a long bout of unemployment.
The White Paper for Post-School Education and Training introduces Community colleges, which will be institutions which will primarily target youth and adults who for various reasons did not complete their schooling or who never attended school. These Community colleges will be ideally placed to focus on adult learning. It is proposed in the White Paper that funding for these Community colleges be obtained from government, SETA’s and the NSF. In recognition that the colleges will be catering for the poor and unemployed, fees will be kept to the minimum. It is envisioned that the learners will be fully funded through bursary or skills programme grants. Re – skilling initiatives for the discouraged work seeker must focus on specific skills that are in demand in the workplace and generic soft skills, especially computer technology.
The SETA’s have the labour market intelligence to give guidance on the programmes that can be undertaken to re- skills discouraged work seekers to re- enter the labour market. Work seekers can be incentivized to attend and complete programmes through the payment of a daily stipend which could cover transport and a small daily living allowance. Employers should be incentivized to integrate discouraged work seekers back into the workplaces.
Census 2011 statistics show that over 500 000 of young work seekers do not have primary education while 1.5 million of them have primary education, but have less than grade 10 education. Workplaces are increasingly demanding a matric qualification and some form of tertiary education for entry level positions. Job seekers with relevant post matric qualifications, coupled with experience in their field are easily employable and do not remain unemployed for long periods, even during periods of poor economic growth. Author: Sharon Snell – COO and CSO of the Insurance Sector Training Authority (INSETA)

Author: Sharon Snell from INSETA.
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