How One Tech CEO is Responding to SA’s Digital Skills Gap

Updated on 18 November 2019

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“One of SA’s fast-growing fintechs is hiring but can’t find skills,” reads the headline of a press release from the Ikhokha team.

iKhokha helps SMEs in South Africa to process card and digital payments. The company would like to fill more than 50 positions in the next year, and it is trying do so with great difficulty.

South Africa lacks the technical skills that fintech companies need to develop new solutions, ensure ongoing innovation and expand their businesses, the press release states.

“To challenge entrenched market players, digital businesses need to innovate, but at times battle to find the technical expertise to do so. It’s ironic that in South Africa, with a 29% rate of unemployment, the situation is even more challenging.

“Not only does the number of jobs far outweigh the number of skilled applicants, but because we are behind first-world countries when it comes to digital proficiency, so is our talent pool,” says Matt Putman, Ikhokha CEO.

“Candidates often lack the technical know-how and experience required to develop globally competitive solutions.

“We have to adopt a new mindset when thinking about education and learning in this new digital world. Continuous self-learning through multiple mediums is being driven internationally,” Putman adds.

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Matt Putman, Ikhokha CEO.

The hiring drive is to support the company’s growth. “iKhokha has quickly grown from a small team to more than 100 staff members, but to support our growth, we need to grow our staff complement by 50% in the next year,” he says.

The 50 plus vacancies at iKhokha include mobile and full-stack developers, risk analysts and software engineers through to creative, HR and finance roles.

In demand

Not surprisingly, because of the digital skills gap, talent is in high demand. “Our Umhlanga based business in Durban needs top calibre people, but the best talent is in high demand and we are competing for placements with other growing digital companies in SA and other countries,” says Putman.

The 2019 State of South Africa’s Software Developers Nation report compiled by tech talent marketplace, OfferZen, confirms South African senior software developers working in the fintech and cloud services sectors are the mostly highly paid developers, earning an average of R65 000 to R70 000 per month.

Hiring strategy

To attract top calibre staff, iKhokha has focused on creating a business that has an informal, casual and collaborative culture. Putman adds that, “Our development team has an average age of 26.”

Stephanie Brown, head of talent at iKhokha, explains, “We are guided by what international digital companies are doing around talent management. They are upgrading skills using innovative learning methods while creating strong company cultures that combine people, purpose, profit and the planet. Young people are looking for new-age work cultures, less red tape, more room for growth, flexibility and exposure to leading technologies. They also want to work for mission-lead companies. Because the market is so constrained, retaining the great people you have is as important as bringing in new talent.

“Our talent acquisition strategy has already attracted top talent from FNB, Standard Bank, Accenture, Deloitte and RCL FOODS. These staff are thriving in a scale-up environment, while enjoying the relaxed Umhlanga lifestyle,” she says.

Puttman shares more about the implications of SA’s digital skills gap and wanting to build a successful tech company outside the usual tech centres of Cape Town and Johannesburg. 

1. What strategies have you implemented to attract the kind of talent you need?

We have developed a work culture and way of working that is tailored for what millennials are attracted to from a career perspective. Key themes being – informal environment, flexible work hours, collaborative teams, flat hierarchy, a purpose driven mission (to democratise entrepreneurship through mobile innovation).

From a talent acquisition perspective – our recruitment process is swift, we are always building on our employer brand using mediums like LinkedIn, Facebook, a well-crafted About Us page, public visibility of our tech stack, employee interviews on our iKhokha Life Blog.

2. The scarcity of tech talent, what cost implications does this have for startups?

The cost of tech talent has definitely increased substantially over the last 2-3 years and this means that startups need to be very deliberate and forward thinking in their employee choices when making key technical hires.

At iKhokha we have invested in creative strategies to try create some level of cost efficiency. For example we have built an internal talent acquisition team, that has been a key way that we can keep recruitment costs down. Driving a healthy internal employee referral program is another key strategy. Finding candidates that are more interested in joining a purpose lead business with room for growth rather than short term financial gratification also plays a role. Finally making sure that we up skill junior or mid-level people, and help them develop into senior resources.

3. Has the lack of talent had any impact on Ikhokha’s growth?

It has at times meant that we take longer than we would like to, to deliver additional features or grow or strengthen parts of the business. But it has also caused us to be innovative in how we tackle problems, we use AI and automation to solve certain resource challenges and we work with outsourced international talent to help us solve big challenges. Internally we then develop additional skill sets and experience from these collaborative projects.

4. Do you think the choice of location (Durban) has an impact on your ability to find talent compared to Cape Town or Johannesburg?

Yes. It is a challenge as many of the experienced people move to Cape Town or Johannesburg to fast-track their careers, but we are hoping to reverse that trend over time by building a meaningful success story in Durban.

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