Bad news about South Africans looking for IT jobs

Although jobseeker engagement has increased significantly over the past year, employment activity remains low within the IT job sector.

This is according to CareerJunction’s latest Employment Insights report for the third quarter of 2024.

Q3 of 2024 saw a 3% decrease in hiring activity from Q2, which followed a 4% increase from the start of the year.

This meant a 17% year-on-year (YoY) decrease, the highest of all job sectors reported. Those in admin, office and support roles only saw a 1% YoY decrease, whereas overall average employment activity dropped by 3.5%.

However, on the job seeker side of the spectrum, the IT job market saw the biggest change in job seeker engagement, with a 48% YoY increase from 2023.

Overall, South African jobseekers have become more proactive, increasing their engagement with the labour market by 22% YoY.

CareerJunction found that the IT profession has remained the sector with one of the largest skills gaps over the past five years, which could explain the high demand but low employment statistics.

A skills gap refers to the difference between the skills an employer expects an employee to have and what they actually possess.

Technical IT architecture had the highest skills gap in South Africa’s entire job market. As a result, recruiters struggled to find appropriate candidates because of the limited supply of job seekers.

This shortage of skills in technical architecture has remained a problem in IT. It was the second-biggest skills gap in 2019, after software development.

Software development now sits at number two, with database design, development, and administration coming in third.

While skills gaps remain a major problem in the job market, candidates are highly qualified, with 29% having either a bachelor’s, honours, or master’s degree.

The same statistics for the finance sector showed that 31% of candidates had these qualifications.

Looking at where most job candidates come from, Gauteng has just under two-thirds of all candidates in South Africa.

The Western Cape has 14% of candidates, KwaZulu-Natal 9%, the Eastern Cape 3%, and Mpumalanga and Limpopo each have 2%.

Signs of strong growth in software development

While hiring activity in the IT sector has been decreasing, major players in the software development market have said there are signs of strong growth, and developers are popular targets for international markets.

Codehesion CEO and founder Hector Beyers told MyBroadband that although South African developers are popular targets for the European market, demand has reduced slightly due to tight customer budgets.

“We still see the market in Netherlands and Germany looking to insource South African devs but budgets have seen to be tight on the customer front in these countries. We get a sense of tight budgets from Western Europe,” said Beyers.

He added that Codehesion used to get more business from overseas than locally, but this trend has shifted.

“We are seeing the South African development market performing very strongly. The overseas market used to be better for us a year or two ago,” said Beyers.

Entelect told MyBroadband that South African software development firms offer a good value proposition for the European market due to similar time zones and language and cultural similarities.

“Global mobility is high; it is possible to build distributed teams where talent selection is the priority (as opposed to purely location and cost). South Africa is increasing in interest to the European market,” it said.

To this end, Entelect has established operations in the Netherlands, United Kingdom, New Zealand, and Australia.

“Despite the competitive nature of these markets, we are seeing a steadily increasing interest in South African technology capability due to the value proposition above,” it added.

Beyers explained that companies using the services of outsourced software development firms want to expand the accessibility of self-service systems to their customers.

This includes increasing brand loyalty through various rewards programmes, making customers’ lives easier, and forming partnerships with other brands.

“We also see companies innovate through making dashboards accessible to staff or partners that drive more revenue for their organisations,” said Beyers.

“We have also seen an uptick in the code audit market in South Africa where companies want an independent view on their code basis and practices being used by their internal development teams.”

Entelect said customers’ buying decisions are driven by the availability of high-quality software at a competitive price point, meaningful partnerships with vendors capable of providing scale, and flexibility regarding engagement and commercials.

“The one-size-fits-all approach does not work due to the complex nature of enterprise structures,” it said.

Clients also require help with expanding capabilities as they grow and mature internal teams, processes, and practices.

“It helps having experienced teams come into showcase ways of working, architecture and quality practices,” said Entelect.