The Covid pandemic is sweeping around the world in various mutations, each hitting us with different strengths and symptoms. All of them combined have triggered a ‘Great Resignation’ in its wake as people re-evaluate their lives and opt for a different future of employment.
pandemic is sweeping around the world in various mutations, each hitting us
with different strengths and symptoms. All of them combined have triggered a
‘Great Resignation’ in its wake as people re-evaluate their lives and opt for a
different future of employment. Like the pandemic itself, the Great Resignation
will come in various formats, with the South African variant more of a ‘Great
Reset’ affecting a small number of highly skilled and experienced workers; but
they are the ones who keep our companies and economy going.
Denialists claim that South Africa is immune to this outbreak in the working world because our crippling unemployment rate means people are afraid to quit their jobs. But just as with Covid itself, no population is immune.
The shift has already begun, with numerous industries losing key professionals who are confident that there is enough demand for their skills and experience to lead more fulfilling lives as independent contractors.
Small numbers, massive impact
While their numbers may not be great, it doesn’t take a mass exodus to have a massive impact. These are the accountants and actuaries, lawyers and analysts, project managers and engineers, and experts in a host of other crucial positions.
In many companies a small percentage of workers have a disproportionate impact on financial outcomes. It is precisely these people who have the ability to move - and imagine the fallout if those top echelon professionals capitalise on their skills and scarcity to seek work that matches the new mindset triggered by Covid.
The pandemic has given people plenty of time to contemplate their futures. Some have seen the fragility of life and want to be more purposeful with their remaining time, or work for more meaningful companies. Others are feeling burned out and need to step back from the corporate treadmill. Some will simply not want to return to office as long as Covid, and the resulting employer requirements, persist.
Women, it should be recognised, have led the way for years by opting for contract work rather than permanent employment. Often that is the only way they can achieve a successful career as well as a fulfilling family life. Now more men are following that path, with Covid as the catalyst.
To put a figure on it, a survey we conducted late last year found that 81.5% of skilled professionals are considering resigning in the near future. These professionals can make that transition easier and more secure by finding work through a platform like Outsized.
Internally we have seen our global database of consultants double compared to end of 2020. In South Africa, freelancer registration has grown at least 5 times in some of the top skills like project management, while change management and data analytics saw 4 times and 3 times growth, respectively. This shows that The Great Reset is already happening here.
Even in a country with high unemployment, going solo is not such an enormous risk for people with strong skills and experience, especially those with a moderate financial safety net. It is naïve to think that our professional segment will relinquish the flexibility and empowerment experienced over the last almost two years to return to the daily commute and rigid hours once businesses recall them to the office.
Becoming an independent contractor isn’t only about shedding what you no longer want in life. It’s also the start of a new adventure with exciting possibilities. It can deliver a wish-list of more flexible or shorter hours, a wider variety of work, the chance to gain broader experience with different companies, to earn more money and control your own destiny.
This personal reset will not only have a serious effect on companies, it also has ramifications for the entire economy. PwC estimates that 80% of all personal income tax comes from just 25% of taxpayers, and has warned that the government is too reliant on a declining base of taxpayers.
The National Income Dynamics Survey, which tracks the number of adults living in households by income, shows that the middle and upper classes are shrinking rapidly. Between 2017 and 2021, those segments more than halved from 6,1 million to just 2,7 million people. The decline is matched by a disastrous loss in income tax, and much of it has been blamed on the brain drain.
The country cannot afford to lose any more of these professionals whose skills and taxes keep the county afloat. But unlike previous brain drains, this Great Reset means that our brightest brains don’t need to leave the country to achieve a more satisfying working life.
In the last three months Outsized has been contacted by companies in the UK, Germany and Australia specifically asking us to source South African contractors to work remotely for them. Those contracts will still see our home-grown talents remain here and continue to pay their taxes, while gaining the experience of working for a global player without the need to emigrate. The downside is that the local market will, for a period, not benefit from their skills, as they will be helping foreign companies to grow instead.
Retain the Brains
Since every skilled worker that we lose has a disproportionate impact on our economy, local businesses need to help South Africa retain its brains. The Covid epiphany that is making individuals move also needs to happen among employers, who must recognise that if you want the best, you must follow them where they go.
To do that they must adapt their hiring practices to tap into these freelance workers before that talent is lured offshore. Fortunately, that is also happening, as the number of clients using Outsized to source specific skills for them has doubled in each of the last two years. Companies may lose some key workers to the consulting talent pool, but they can rehire them on an ad hoc basis, or find other people with skills that better match their specific needs.
Smart companies are realising that if they handle this Great Reset well, they can benefit enormously. They can hire exactly the right skills to boost their performance, inject fresh knowledge and enthusiasm into their existing teams, and eliminate some of the carrying costs of permanent staff.
Hiring contractors can be quicker and less onerous than recruiting permanent staff, and they hit the ground running because they are actively seeking and accustomed to this kind of fixed-term or project-specific work.
Once a company makes the mind shift to adopt this way of working, they must adapt their practices to implement it. That need not require any major restructuring of the HR department or processes if they work with a partner that already has a strong database of curated consulting talent. The partner can then identify experienced and vetted individuals who best fit the position and deploy them rapidly.
The corporate world faces an inevitable change as top tier workers capitalise on their skills and their scarcity to find fresh and more fulfilling opportunities. The companies that welcome this new mindset will also come through the pandemic stronger than they went into it.
Johann van Niekerk, MD of Outsized for Africa