Every region of the globe could see population declines by the end of the century – except Africa. According to projections from the World Economic Forum, Africa’s population is set to triple by 2100 and will account for 83% of global population growth seen from 2015 through 2100. Comparatively, Europe’s population is expected to decrease by over 50%.
Amid population shifts, the Fourth Industrial Revolution will spark more advancements in the next 10 years than we’ve seen in the past 250 years, unleashing critical implications for global labor markets, ways of working, innovation and skill requirements. And as populations decrease elsewhere, Africa will be uniquely positioned to deliver a younger workforce that can help meet new demands. However, the economic prosperity hinges on how well-prepared young workers in Africa are for Industry 4.0. Currently, a disparate skills gap has leaders from companies throughout the continent deeply worried about growth and profitability.
Organizations must prioritize workforce development so they can help build a sustainable pipeline that meets the growing global talent needs of today and tomorrow. The following five principals can help organizations across Africa future-proof their talent strategy and lead the next generation global economy.
Africa is one of the most geographically and socially diverse continents in the world, touting a broad range of cultures, languages, religions, economies, industries, and businesses. This diversity becomes apparent when looking at the World Bank’s Human Capital Index, an international metric that benchmarks the influence factors such as knowledge, skills and health have on workforces around the globe. Countries like Kenya, Zimbabwe and South Africa, for example, rank in the upper half of the world for human capital while many others rank near the bottom. There are also country-to-country disparities in innovation, according to the Global Innovation Index, with South Africa, Tanzania and Kenya tracking “above expectations” in terms of their technology development and financing, whereas others are tracking “below expectations” for innovation such as Nigeria, Zambia and Namibia.
While some of the Sub-Saharan countries currently rank lower in human capital and innovation, they also host some of the youngest workforces in the world. By comparison, South Africa, while still not considered an aging population, has the oldest workforce in the region. As an upper middle-income country, South Africa also has the most industrialized, technologically advanced and diversified economy in Africa – but it also has one of the highest, persistent inequality rates in the world. The rise of digitization could greatly disrupt these standings, with younger workforces comprised of digital natives propelling Africa forward in global rankings for human capital and innovation.
Owing to Africa’s diversity, from country to country (and city to city), it becomes clear that there is no “one size fits all” model for workforce development, rather a plethora of resources that, if tapped correctly, can position the continent to lead the next generation global economy. But to capitalize on these resources, organizations must first understand the capabilities, challenges, and trends specific to their workforce and their unique geography, and then consider upskilling internally or sourcing talent within and beyond their country borders. Why shouldn’t organizations in South Africa look for younger talent pools in other Sub-Saharan countries? Or organizations in Zambia source talent with innovation experience from South Africa?
As the “world of work” transforms, so must the approach to human resources. Our experience shows us that most HR functions in Africa – and in many parts of the world for that matter – tend to operate vertically and in isolation, meaning the people management processes are driven by the company's goals and objectives. Much of this processing, while built on sound principles, traces back to the Ulrich Model of the 1990s. But we’re increasingly observing this approach to be too rigid in today’s rapidly shifting environment, where flexibility and agility are key factors to success.
Amid the many demographic changes occurring, the gaps of traditional models have become even more pronounced. We therefore recommend a horizontal alignment, which ensures that all organizational strategies and processes across departments are in sync and not in unnecessary competition. In this model, HR works alongside the business as a consultant and equal partner, jointly owning all outcomes with other stakeholders. This yields more positive outcomes in recruitment, performance, engagement, succession, reskilling, and professional development.
Amid the pandemic, organizations have been forced to virtualize, practically overnight. While digitally tracking behind most other global regions, Africa could reach parity by 2030 when three quarters of the population are projected to become internet users. And with internet penetration still lower than global average (59.5%) in many parts of the continent, closing this gap will connect businesses with new employees, consumers and bourgeoning economic opportunities. Already, mobile technologies alone have created 1.7 million jobs and generated $144 billion, representing about 8.5% of the continent’s total GDP.
Currently, many organizations in Africa are in the nascent phases of digital transformation. But, regardless of where they are now, the approach to digitization must put workforce skill development front and center and engage their workforces along the transformation journey. To do so, some organizations will want to centralize energy and resources into technology investment, building the capacity to do higher-value work. Others will need to introduce new foundations for HR, advancing areas they haven’t historically invested in, such as recruitment, learning and development (L&D), training, diversity, equity and inclusion (DEI), etc.
To get digital transformation right, organizations must mitigate risks, enhance efficiencies and determine meaningful applications. By prioritizing these key areas, they can develop a strategic plan of attack. Approaching workforce development in this framework empowers decisions about administrating HR processes digitally — at a pivotal time when the race is on for skill development in Africa.
Africa’s unique geography and demography make investment in environment, social and governance (ESG) measures of chief importance, demonstrating the intersection of these areas. For example, many of Africa’s economic hotspots and key industries are particularly exposed to risks. Large cities, such as Lagos, Nigeria and Cape Town, South Africa, are impacted by rising sea levels. With changing rainfall patterns, agriculture-dependent economies suffer risks to food security and individual livelihoods. In some countries, there are hierarchy laws and norms that limit access to work for women.
Forward-thinking organizations in various industries are making strides in embracing ESG. For example, digitization efforts in mining are leveling the playing field for workers and enabling more women to play a greater role in the workforce. In other fields that are plagued by diversity issues, such as the lucrative information and communications technology (ICT) and financial services industries, many organizations are increasingly making purpose-driven investments in ESG. In April of 2021, a coalition of multilateral development banks and development partners led by the African Development Bank Group pledged over US$17 billion to improve access to food across the African continent.
These efforts to invest in and prioritize ESG will play a key role in the workforce development and economic prosperity of cities in Africa. Given the tools to measure and deploy solutions, organizations in Africa have the capacity to not just build profitable businesses – but also play a key role in solving societal problems of today and tomorrow.
The events of 2020 will forever change the way businesses operate and how leaders are held accountable. Now there’s an urgent need for a new type of leader. One that is driven by action to make sustainability, equality and resiliency a top priority – not just for the good of their organization, but for the communities in which they operate, and for the planet overall.
According to Mercer's Global Talent Trends 2020-2021 report, 75% of HR leaders in South Africa expect the pandemic to negatively affect their businesses. Job security concerns are also at an all-time high, ushering in a new paradigm for human resources. Defining future workforce needs and reinventing the approach to HR must be a top priority if organizations are to navigate through the current economic crisis – let alone win the unfolding race to skill and build talent in upcoming decades.
Technology continues to accelerate and the businesses that will be the most successful will be those that can continuously adapt and nurture an agile, forward-thinking culture that moves alongside the pace of innovation – and in many cases, fuels it. To win the skills race in Africa, a new type of leader is needed – one that bridges the gap between management and employees. Putting traditional hierarchy aside, organizations must be restructured to match the new shape of work. Leaders must deeply connect with teams, taking in their feedback and acting accordingly.
But such a shakeup in the world of work requires trust on both sides. By leading with a mix of empathy and economics, business leaders in Africa can cultivate that trust. With a sustainable pipeline of talent, these organizations will outpace competitors and create the value propositions needed to stay ahead and lead the next generation global economy.