Sholina Durga, Managing Director: Distance Learning & MBA at Richfield
South African companies are feeling the strain of a growing skills gap. The pressing question for most leaders is whether to continue competing for scarce talent or start building it themselves. In a market that evolves faster than job descriptions can, true competitive advantage lies in how quickly a company’s people can learn, adapt, and grow.
Building skills
The evidence points in one direction: upskilling—the strategic development of an existing workforce—is more sustainable, cost-effective, and loyalty-building than external hiring1. Recruiting in-demand talent is becoming increasingly competitive, expensive, and unpredictable, particularly in technical and digital roles.
Despite one of the world’s highest unemployment rates2, local employers still struggle to fill critical positions. As of November 2025, South Africa’s official unemployment rate is approximately 31.9%, according to the Statistics South Africa (Stats SA) Quarterly Labour Force Survey (QLFS) for Q3 2025. The challenge lies in the mismatch between current qualifications and the skills demanded by fast-changing industries. Companies across sectors report persistent shortages of data analysts, software developers, and AI specialists—skills that must constantly evolve as technology advances.
The limits of buying talent
Capitec’s former CEO once warned of a growing “war for skills” as banks and retailers chase the same small talent pool. Remote work has intensified this, with international firms hiring South Africans directly and paying in stronger currencies.
The instinct to “buy” skills is understandable. Hiring seems faster. Need a data scientist? Recruit one. But when the market is thin and salaries keep rising, that logic breaks down. Recruitment can take months, and new hires may take a year or more to reach full productivity.
By contrast, employees who already understand your business context can learn new technical or leadership skills faster. They’re motivated by visible career opportunities and are less likely to leave once they see a clear growth path. Over time, training programmes expand the pool of internal mentors who cascade knowledge, strengthening organisational learning cultures.
The financial case for upskilling
From a financial perspective, the case is equally strong. Between recruitment fees, onboarding delays, and salary premiums, external hiring often costs several times as much as a well-designed training investment.
South Africa’s skills development incentives further strengthen this argument. Employers with payrolls above R500,000 must pay a 1% Skills Development Levy3. However, those who engage actively can reclaim up to 20% through the relevant SETA by submitting a Workplace Skills Plan and an Annual Training Report4.
Although administrative processes can be slow, companies that leverage these incentives and partner with accredited providers can transform compliance into a competitive advantage. The key lies in purpose-driven training, starting with a skills audit and moving to modular, blended, and project-based learning that converts costs into capability.
Training in an AI-driven world
A critical question remains: are corporate training models keeping pace with AI and emerging technologies? Too often, the answer is no. Many programmes still teach outdated frameworks. Recent SAP research shows that 85% of African organisations prioritise AI development skills, while 83% emphasise the need for Generative AI expertise5. Yet, many companies are investing in tools their employees cannot fully utilise.
Closing this gap requires closer collaboration between tertiary institutions, corporate academies, and industry experts who work hands-on with data and automation. It also demands a culture of continuous learning that evolves alongside technology.
Forecasting future skills
HR and learning leaders now face a new imperative: anticipate the skills their organisations will need in two years and start building them today. This means designing clear learning pathways, stacking short courses into formal qualifications, and measuring success through business outcomes rather than attendance numbers.
At Richfield, we specialise in creating accredited, flexible learning programmes that blend technology, business, and people skills, helping organisations grow their digital capability while developing their people.
The smarter strategy
In a labour market defined by scarcity and disruption, external hiring will always have its place, especially for specialised or frontier roles. But sustainable success lies in building internal capability. Upskilling saves time, money, and institutional knowledge while deepening loyalty and organisational resilience.
The organisations that will outpace their competitors are those that see learning not as a compliance exercise, but as the most powerful form of strategy they have.
1https://www.thehrdirector.com/business-news/workforce-planning/upskilling-vs-hiring-theres-clear-winner-cost/
2https://tradingeconomics.com/country-list/unemployment-rate\
3https://www.sage.com/en-za/blog/skills-development-levy/
4https://www.mict.org.za/seta-funding/
5https://news.sap.com/africa/2025/05/ai-skills-development-in-africa-new-report-findings-revealed/
