Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey

The paper reflects on the findings from a firm survey conducted among twenty of South Africa’s largest firms across a range of sectors. The survey formed part of research conducted by the Development Policy Research Unit on graduate unemployment in South Africa. The firm interviews traversed a range of issues relating, for example, to the schooling and higher education system, the learnership programme and National Skills Development Strategy (NSDS) and the nature of skills shortages and the skills deficit. In turn, a number of detailed long- and short-run policy suggestions emanated from the interviews and background research. In the context of skills shortages the persistence of unemployment among graduates is puzzling. However, the findings here suggest that reported skills shortages, especially in occupations such engineers, technicians and scientists, are most severe at the middle- to senior management level. Graduates do not compete for these positions; in fact, firms generally agree that there are enough graduates available in the economy. Firms do feel,however, that graduates often do not possess the necessary skills and experience to be considered even for entry-level positions. Poor education therefore lies at the heart of the graduate unemployment problem. While on-the-job training in the form of learnerships, implemented in accordance with the NSDS can potentially bridge the skills deficit of graduates, the survey findings rather suggest that this subsidised employment and training programme has not generated above-equilibrium employment in firms. While short-term interventions may help alleviate immediate skills shortages in the economy,it is clear from this research that a longer-term agenda of radically improving education and training in South Africa is the only sustainable solution to skills shortages and, eventually, the graduate unemployment problem.