Navigating a skills shortage in a talent tug-of-war

By Claressa Pretorius, Head of Business at Kelly by Adcorp

South Africa’s workforce paradox is stark: employment in the formal sector, which calls for qualified incumbents, decreased by 245,000 jobs in the first quarter of 2025, with businesses struggling to fill critical roles in highly skilled areas including technology, engineering, and healthcare. Tangible consequences include stalled innovation, delayed infrastructure projects, and escalating costs: factors that strain individual companies and throttle national competitiveness and growth.

The drivers of this talent scarcity are multi-layered. Rapid digital transformation is reshaping industries faster than skills can be developed, with a 2025 report warning that South Africa could face a technology skills gap as wide as 73% by the end of 2025, particularly in areas such as emerging tech and sustainable solutions. Bearing witness to this, 78% of companies say they urgently need AI expertise, and 40% anticipate their workforce will require significant upskilling within the next three years.

Education-to-industry misalignment compounds the problem. South Africa has a skills mismatch exceeding 50%, leaving many graduates ill-prepared for the demands of a digital-first economy. Employers are already sounding the alarm: more than 60% of South African companies identify skills shortages as a major barrier to transformation by 2030.

This context has turned the labour market into a tug-of-war for scarce skills. Attracting and retaining talent requires more than traditional recruitment. It demands scalable, tailored strategies that match the volatility of business conditions and go beyond filling a vacancy. Retention, in particular, depends on creating environments where employees can see clear pathways for growth, participate in skills development, and feel connected to a culture that values agility, diversity, and inclusion. The organisations that succeed in keeping scarce talent are those that combine smart recruitment with sustained investment in employee experience.

In an environment where skills are scarce and competition for talent is intensifying, organisations are increasingly requiring specialised recruitment strategies rather than one-size-fits-all approaches. Models such as Recruitment Process Outsourcing (RPO) and Managed Services Provider (MSP) have become central to this shift.

RPO provides a structured framework for managing all or parts of the recruitment lifecycle, this includes sourcing and talent-pooling to screening and workforce analytics. This approach not only streamlines processes and reduces time-to-hire, but also strengthens compliance and transparency, making workforce planning more data-driven.

MSP, on the other hand, broadens the focus on overall workforce management. By integrating recruitment with skills development, wellbeing, governance, and even offboarding, it creates a unified system that improves consistency and resilience. For organisations, this means greater visibility, adaptability, and the ability to align people strategies with shifting business priorities.

The benefit of scalability is central. In a tight talent market, the ability to expand or contract workforce solutions in line with shifting priorities allows organisations to remain agile without incurring unnecessary costs. Scalability brings the agility to adjust quickly, the efficiency to reduce costs, and the depth of expertise to secure talent others cannot reach. It is not a ‘nice to have’; it is a competitive necessity.

The external benefits are clear: faster access to scarce skills, efficiency gains from streamlined processes, and workforce strategies tailored to South Africa’s unique and ever-changing labour market. But the broader lesson is that business-as-usual approaches to recruitment are no longer enough. If the skills gap is widening while unemployment remains high, it signals a deeper structural disconnect between how we educate, how we recruit, and how we grow talent.

South Africa’s economy depends on bridging the disconnects between education and industry, between technology and people, and between strategy and execution. Kelly by Adcorp provides specialist recruitment solutions that aligns workforce models with the realities of our uncertain economy, to enable organisations to unlock growth, foster resilience, and navigate the talent shortage.

Image credit: Freepik