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South African businesses in a panic over emigration

Staff Writer

$8$ March $2023$

A new white paper from payroll services group Playroll, in partnership with tech and developer jobs marketplace OfferZen

and executive recruitment firm Aims International, shows that South Africa$$s skills crisis runs deeper than industry$-$specific

shortages portray.

The group$$s research found that close to $80\%$ of all business leaders it surveyed consider the emigration of skills one of the

critical risk factors facing their organisations.

This comes at a time when emigration appears to be accelerating, it said.

Playroll noted that over $900,000$ South Africans have already left the country $$ a number that was most recently published

by the UN Department of Economic and Social Affairs$2020$ International Migrant Stock report in $2022[1]$

$.$

According to the UN report, by the end of $2020,914,901$ South Africans were living in other countries and territories, up

from $786,554$ in $2015$ and from $743,807$ in $2010.$

Worryingly, three times as many people emigrated from South Africa between $2015$ and $2020$ over $128,000$ people $$ than

between $2010$ and $2015(43,000$ people$),$ the data showed.

The UK has the most migrant stock from South Africa, with almost a quarter of a million residents listing RSA as their birth

country. This is followed by Australia, the USA, and New Zealand.

Playroll said that the problems around the emigration of critical skills run deeper than even these numbers show because,

increasingly, young people are the ones leaving.

The group noted that those aged between $25$ and $40$ are the most likely to leave the country $$ and possibly more

concerningly, over half of South Africa$$s graduates have the potential to emigrate in the future.

Senior employees are also more likely to relocate, probably because they have the financial means to do so$,$ it said.

The trend of younger people leaving has been supported by the most recent tax data from the South African Revenue

Service $($SARS$).$ In lieu of any official government data on emigration, the number of South African taxpayers who have

ended their tax residency in the country provides some insights into these trends.

SARS$$ data shows that over the last five years, over $40,500$ taxpayers have ended their tax residency, and in more recent

years, lower$-$income earners are making up a bigger proportion of these taxpayers leaving.

Tax experts at Tax Consulting SA said that this is an indication that younger South Africans are deciding to end their tax

residency, likely to seek opportunities abroad.

Playroll said that emigration is becoming a major issue across business sectors$,$ with companies with an operational or

manufacturing focus experiencing increasing pressure to fill roles that were once the preserve of the finance and high$-$tech

sectors$.$

$$Interestingly$,$ the results of our survey showed that while most companies considered C$-$Suite and management tiers as the

most vulnerable to emigration, tech$-$focused businesses perceived the threat at an associate level,$$ it said.

$$This suggests that tech and software industries are the bellwethers, not just of employer sentiment$,$ but of actual

demographic trends, as they show up in the emigration data. With no respite on the horizon, the South African business

community is understandably on alert.$$

The group noted that the UK was the top emigration destination for expats in $2022,$ followed by Australia and Portugal.

The top reasons people leave to move abroad include a better quality of life, earning potential, personal safety, and career

growth.

Problems closer to home

Playroll noted that the skills crisis isn$$t only playing out by South Africans emigrating, however.

Many skilled and qualified professionals who are choosing to stay in the country are now also taking advantage of the

remote work opportunities provided by global organisations, it said.

According to Simonetta Giuricich, Chief Operating Officer for Playroll, remote work arrangements that were fuelled by

Covid$-19$ means that many skilled South Africans are not available for local employment because they can access highpaying work opportunities with international companies while still staying in the country.

For example, the group$$s research showed that an alarming number of local software developers are working for overseas

companies while still being based in South Africa. It estimated that $40\%$ of the $120,000$ developers in the country are

working remotely for foreign companies.

So even though emigration may be slowing down in certain sectors$,$ this doesn$$t necessarily mean good news for local

businesses.

Giuricich said that the loss of employees to emigration not only creates immediate gaps in the skills and qualifications

required by an organisation but could also lead to entrenched competitive challenges in the longer term.

Playroll suggested that businesses look beyond sim