Reflections on the List of Occupations in High Demand 14 March 2019 Vijay Reddy Bongiwe Mncwango Michael Rogan Sybil Chabane

Publications: http://www.lmip.org.za/ http://www.dhet.gov.za/

Background: As part of the skills planning mechanism, government, and in particular the Post-School Education and Training (PSET) System, needs to understand, which occupations are currently in shortage, and which occupations will be needed in the future, particularly to enable the rollout of government’s strategic plans. DHET has published OIHD 2014 and OIHD 2016. DHET requested LMIP construct the OIHD 2018 list with a strengthened methodology.

Objectives: Incorporating a multidimensional index of occupations which are in high demand Identify new dimensions and data sources for measuring high demand occupations (NQF3 and above- OFO 4 digit) Identify high, medium and low demand occupations in South Africa Combining a quantitative and qualitative approach Building on: UK’s Migration Advisory Committee (MAC) framework OECD’s Skills for Jobs Indicators

The MAC and OECD approaches: Dimension Indicator Wage pressure Hourly wage growth Employer- based Percentage of skill-shortage vacancies/ employment by occupation Employment pressure Total employment growth Percentage of skill-shortage vacancies/all vacancies Unemployment rate (in previous occupation) Percentage of skill-shortage vacancies/hard-to-fill Growth in hours worked Price-based Percentage change in median hourly pay for all employees Talent pressure Underqualification growth Percentage change in mean hourly pay for all   Relative premium to an occupation, given NQF3, controlling for region and age Volume- based Percentage change in unemployed by sought occupation Percentage change in hours worked for full-time Percentage change in employment Absolute change in proportion of workers in occupation less than one year Administrative data- based Absolute change in median vacancy duration Stock of vacancies/claimant count by sought

Conceptualising four dimensions: • Wage pressure- upwards wage pressure over time is one characteristic of occupations for which demand is high (and is currently or is likely in the future to outstrip supply) • Vacancy pressure- the persistence and/or duration of vacancies over time is often interpreted as a signal of occupational shortage • Employment pressure- on its own, employment growth is a sign of demand being met but, combined with employment intensity and turnover, employment pressure can be a signal of occupational demand • Priority/strategic demand- it is increasingly being acknowledged (see NILS, 2013) that sectoral and governmental priorities and strategic plans should be included in measuring occupational demand

Dimension Data source Indicator Threshold Weight Framework for the 2018 List of Occupations in High Demand (OIHD) Dimension Data source Indicator Threshold Weight Wage pressure QLFS/ LMDS Hourly mean wage growth Change in mean hourly earnings above the median between 2010 and 2015. 1/12   Hourly median wage growth Change in median hourly earnings above the median between 2010 and 2015. Conditional hourly mean wage growth Change in the conditional mean hourly wage above the median between 2010 and 2015. Vacancy pressure JOI/CJ Vacancy growth Change in vacancy growth above the median in the JOI or Career Junction (CJ) listings. 1/8 CJ Vacancy duration Change in vacancy duration above the median in the CJ listings. Employment pressure QLFS Employment growth Change in employment growth above the median between 2010 and 2015. Employment intensity growth Change in employment intensity above the median between 2010 and 2015. (hours worked by full-time workers) Employment tenure Change in proportion of employees with tenure of less than one year above the median between 2010 and 2015. Priority/ Strategic Demand SETA Pivotal List Strategic sectoral priority Occupation appears on the SETA Pivotal List. SIPs list National priority Occupation appears on the SIPs List.

Outcome: 286 occupations with a score above zero. The median value for these occupations was 0.25- in other words, there were 143 occupations with an index score greater than 0.25 (k) (or occupations which reflected demand in more than 25% of the weighted indicators). These 143 occupations were then grouped into three mutually exclusive categories denoting high, higher and highest demand (based on their individual index scores) using a mean clustering analysis

Qualitative: What: national call for evidence, literature review, interviews with industry stakeholders, policy review add context and texture to the quantitative list of 143 OFO 4 digit occupations extend the list to the 6 digit occupational level justify the inclusion and exclusion of occupations

RESULTS

Top 25: Statistical only: OFO  OIHD Index Score 1331. ICT Service Managers 0.7083334 6712. Electrical Mechanics & Fitters 0.6666667 1211. Finance Managers 0.625 1323. Construction Managers 3123. Construction Supervisors 1321. Manufacturing Managers 0.5833334 1349. Professional Services Managers nec 2331. Secondary or Intermediate & Senior Education Teachers 2519. Software & Applications Developers 3118. Draughtspersons 2141. Industrial & Production Engineers 0.5416667 2142. Civil Engineers 3112. Civil Engineering Technicians 3115. Mechanical Engineering Technicians 4221. Travel Consultants & Clerks 6711. Building & Related Electricians 1112. Senior Government Officials 0.5 1219. Business Services & Administration 1311. Agricultural & Forestry Production 2149. Engineering Professionals nec 2341. Primary School or Foundational Phase Teachers 2412. Financial & Investment Advisors 2619. Legal Professionals nec 3512. Information & Communications Technicians 3521. Broadcasting & Audio-visual Technicians

Sources of Occupational Demand for Occupations in the Highest Group

Consolidated list of occupations at 4 and 6 digit level HIGHEST Occupation OFO Code 1112. Senior Government Officials   General Manager Public Service 111202 Senior Government Official 111204 Senior Government Manager 111207 1211. Finance Managers Chief Financial Officer 121101 Finance Manager Management accountant Payroll Manager 121102 Credit Manager 121103 Internal Audit Manager 121104 1219. Business Services & Administration Corporate General Manager 121901 Corporate Services Manager 121902 Physical Asset Manager 121903 Contract Manager 121904 Programme or Project Manager 121905 Labour Recruitment Manager 121907 Quality Systems Manager 121908 Sustainability Manager 121909 1221. Sales & Marketing Managers Sales and Marketing Manager 122101 Sales Executive 122102 Sales Manager Director of Marketing 122103 Interactive and Direct Marketing Strategist 122104 Client Services Advisor 122105

Future directions: More in-depth qualitative research Wider qualitative approach (both private and public sectors) ‘Staggering’ the top-down and bottom-up approaches Reflections: Who uses the list and how? How can participation be improved? What does the list tell us about the current and future needs of the labour market?

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