New Employment Equity Amendment Bill May Impact Skilled South Africans

Target-based affirmative action in South Africa’s Employment Equity Amendment Bill may propel certain skilled workers to leave the country to search for other career opportunities, have warned the Bill’s opponents.

Understanding the Employment Equity Amendment Bill

The current Employment Equity Act provides for some affirmative action measures. However, the Department of Employment and Labour has introduced the Bill, that would make these much stricter.

Announced in 2020, the Bill proposes to allow the Minister of Employment and Labour to set numerical targets for the representation of suitably qualified persons from designated groups in specific national economic sectors.

The Congress of South African Trade Unions (Cosatu), the largest trade federation in the country with an estimated membership of 1.8 million workers, welcomed the changes the Bill proposed. While presenting to parliament this month, they said the Bill will “provide badly needed interventions to strengthen the government’s ability to hold employers accountable for their role and failures to adhere to the Employment Equity Act.”

“Cosatu urges parliament to retain these long-overdue provisions and ensure the speedy passage of this progressive Bill,” the unions said.

“It has been shown by countless research that workers who are treated with respect, paid a living wage and who’s rights are respected are the most motivated thus contributing to a more productive workplace and economy.”

Not all groups reacted positively to the Bill. Dr Anthea Jeffery, the head of policy research at the Institute of Race Relations (IRR), presented at parliament this month and warned that businesses would be reluctant to expand at all if they were forced to hire staff on a basis that did not take sufficient account of skills and experience. The new policy could push skilled people to leave South Africa, she said.

“The Bill will stall economic recovery, prompt a further flight of scarce skills and capital, leave more people unemployed, add to poverty and increase inequality,” Jeffery said.

As there has been no socio-economic impact assessment conducted on the proposed amendments, Jeffery pointed out, “We risk businesses closing doors, jobs being lost. South Africa should abandon race as the means to determine who should benefit from empowerment and adopt a means test instead. Given the evidence of what the pursuit of racial quotas has done to the public sector, such as poor service delivery, we should not be doing the same to the private sector because our economy is in a great deal of trouble.”

Skilled South Africans Are Leaving

A recent study by the University of Cape Town’s Liberty Institute of Strategic Marketing that used the National Income Dynamics Survey, which details the number of adults living in households by income band, found that between 2017 and June 2020, the middle-class adult population declined from 6,100,000 to 2,700,000. The three-year period translates to a 55.73 per cent reduction in this sector.

Part of this reduction in the middle-class can be attributed to individuals leaving the country for what they see as greener pastures. However, it is difficult to know precisely how many people have left as the government does not track emigration data. Estimates stand on around 23,000 South Africans leaving per year. However, anecdotal evidence shows that it could be much higher than that.

James Formby, the Chief Executive at Rand Merchant Bank, warns that the post-lockdown economy of South Africa is likely to be set back by a brain drain of skilled people leaving the country.

“South Africa is losing people in their thirties and forties who are qualified and experienced,” said Formby in a recent interview with Business Day newspaper.

“Yet it is extremely difficult to bring new people into the country, so there is a risk that the skills base is eroding, and we see this as one of the long-term threats to the country,” he said.

Critics warn certain skilled South Africans may depart due to Amendment Bill

Detractors are warning the South African Government that the proposed amendments to the current Employment Equity Act may have disastrous effects on the workforce and small businesses.

This may add to  many skilled South Africans feeling the pinch of the pandemic, which brought retrenchments and job insecurity, and highlighted the limitations in their careers. Other factors igniting South Africans’ need to go abroad include safety, global mobility, the falling rand, and the continued increase in living costs.

Go Where Your Skills Are Appreciated

Skilled South Africans, like others, want to contribute to a resilient economy while building their own careers and providing for their families.

In a recent episode of the podcast Plan B, Jane Gordon, the Public Relations and Communications Executive at CS Global Partners, commented on the growing exodus of South African entrepreneurs and businesspeople.

“South Africans, in particular, want more options and more opportunities. They are really looking to become more globally mobile, which is sometimes hard being based in South Africa,” says Gordon.

Traditionally, skilled South Africans look to the UK, Australia, and Canada to build a new life. However, in the past few years, the Caribbean has begun attracting more South Africans with citizenship by investment programmes.

“South Africans are often restricted by obtaining citizenship through ancestry or through a family connection. If you don’t have that option, then it’s very difficult. Being able to invest in a citizenship by investment programme is a relatively easy option which also allows you to choose where you’d like to become a citizen. In South Africa, England or Australia are popular choices, due to family connections, but citizenship by investment can open up a whole wealth of opportunities,” Gordon said.

Investing in second citizenship in the Caribbean comes with a plethora of benefits, which include local incentives that drive investment in particular sectors, a stable currency that is pegged to the US dollar, and visa-free or visa-on-arrival access to countries across the globe. Often, the process for citizenship by investment is much quicker than applying for citizenship via ancestry or through residency.

Explore Benefits of Dual citizenship

Citizenship by Investment

An increasing number of skilled South Africans are looking to broaden their horizons with a second citizenship through citizenship by investment. Successful applicants may then apply for a passport for their new country of citizenship. But what is citizenship by investment?

Citizenship by investment programmes allow reputable individuals and families to acquire citizenship from a country in return for an investment in or contribution to the host country. It is an ideal way to gain security, mobility, and additional business prospects for those looking to expand their global footprint.

Annually, Caribbean citizenship by investment programmes are rated the best in the world by the CBI Index, a comparative ranking system of citizenship by investment programmes globally, published by PWM.

CS Global Partners’ experts can assist skilled South Africans to find the best citizenship by investment programme to suit them and their families. Contact us at [email protected] for a free consultation.