T im Woodall explores the challenges and opportunities for a contingent workforce in an emerging economy
When I am not spending time with IQN customers, partners and prospects, I’m very fortunate to be involved in a small charity called People (www.people.org.uk), which empower communities in Africa to make a difference. In Kenya, this means that we run a scholarship programme for children to attend secondary school.
But thoughts of work are never far away and recent trips, to Kenya and Liberia, got me thinking about what a contingent workforce looks like in an emerging economy.
Despite African countries accounting for 9 of the 15 fastest-growing economies in the world, compared to Europe or the U.S., the African talent market is very immature. For example, recruitment agencies in Kenya largely enlist workers to export into areas such as the hospitality industry in Dubai. Labour is plentiful and inexpensive with far more workers than jobs. Personal previous recruitment experience in Kenya saw over 150 candidates apply for a role in the first week alone.
According to PricewaterhouseCoopers, by 2040 it is estimated that Africa will have the world’s largest labour force. But with currently only 40% of secondary school educated (UNESCO report), there will be a substantial skill shortage. Something that the People charity is looking to change.
Practices are evolving through the use of technology, but the dynamics of the recruitment industry have not changed to the same extent we have seen in Europe and the U.S. This is validated when you look at IQN’s customer base in Africa. The countries and programmes where IQN is deployed are all part of global programmes. As yet, companies with their headquarters in Africa have not come to market with a technology solution.
Different continent, same challenges
Even though the African market is less mature, buyers still face the same challenges. A friend of mine in Nairobi runs his own business producing corporately branded merchandise. Over dinner one evening, he shared the difficulties of workforce management with a business that has significant peaks and troughs.
He keeps a permanent core workforce but, if multiple orders come in at the same time, he quickly needs to increase his workforce with staff familiar with his machinery and a track record of producing good quality work. It is clear that he needs to create his own talent pool that he can draw on at short notice and have the ability to manage this contingent workforce efficiently.
Although the challenges may be similar, there are some unique characteristics that make the use of contingent workers in Africa particularly demanding. These include:
- Ex-pat workers who plug a skill gap or are on assignment within a multi-national organisation. Predominantly being used within the oil or security sectors, these workers are often paid in their home market.
- An increasing number of freelancers working in areas such as the creative industries in music and graphic design.
- By far the most common, casual labourers who work on a contingent basis out of necessity rather than lifestyle choice and are typically paid cash at the end of each working day. This highly transient workforce has limited access to email and internet. With reduced means of communications, sourcing and planning talent becomes extremely difficult.
The contingent workforce market in Africa is still at a very early stage in its development, and I believe it will be several more years before we start to see the true emergence of MSP and VMS programmes.
However, organisations better understand talent management requirements today. The EY Talent Trend Survey 2014 states “… organisations consider talent management and management/leadership development as high priorities—but recognise they lack capacity to deliver in these self-same areas. Workforce planning, performance management and employee engagement have all become higher priorities.”
The pace of development within the African region is rapid. I watch with interest to see how the market matures, with cultural and economic influences shaping the contingent labour market to look very different from that in Europe or the U.S.
If you would like to know more about the work of People, please contact Tim at email@example.com.
Originally posted by Staffing Industry Analysts in Staffing Stream on 30 September 2016