Fewer people want to work in SA now hiring's picked up in London and New York

There was a time when it looked like South Africa may be slowly but surely bridging the skills gap.

Last year the return from London, New York and elsewhere of many expatriates following the financial crisis and mass lay-offs in the City and on Wall Street was hailed as "the homecoming". The return on the market of people with skills and precious foreign experience, together with a relaxation of limits for foreign workers and the increased number of local bright talents and MBAs raised hopes that South Africa's long-intractable problem could be approaching a solution.

According to a new survey of South African business, such optimism was premature.

The lack of a skilled workforce is still the biggest constraint to growth ahead of over-regulation and red tape, according to 34% of respondents in the survey conducted by Grant Thornton. Last year's percentage was 41%, but the improvement is due to reduced demand rather than the better availability of skills: "Businesses are feeling a little less constrained by a lack of skilled workforce, but this is probably due to the recession causing a slightly reduced demand for skills," says Leonard Brehm, chairman of Grant Thornton SA.

Indeed, the much-hailed 'brain gain' may soon turn into a 'brain drain' again, as the crisis ends, Western financial institutions start hiring again and the City and Wall Street beckon once more.

"The skills issue won't go away," says Allen Smith, Ceo of Continuity SA, a business consultancy in Johannesburg. "Business is in a global fight for skills and South Africa is not in a position to create enough new skills to make up for those being lost. Once recessionary caution vanishes, international opportunities will attract more of our best and brightest away. In the light of this, companies need to ensure that they have sufficient succession planning in place for all key employees."

Because of this constant danger of the best talent being poached by rivals, retention strategies have become crucial for employers, recruitment specialists say. "In such a difficult market you really don't want to lose your top players to competitors," says Phryne Williams, director of Capital Assignments, a financial services recruitment firm. "Banks and companies are finding more and more creative ways to retain staff such as offering lock-ins."