South Africa’s talent crisis - What's working in 2025

South African organisations are navigating a complex and rapidly evolving talent landscape. With global trends reshaping local realities, the battle to attract, engage and retain top talent is intensifying.

“Employers must critically assess the effectiveness of their talent strategies to ensure alignment with the evolving skills landscape,” advises Lindiwe Sebesho, Master Reward Specialist and Executive Committee Member at the South African Reward Association (SARA). “A thorough understanding of skills market dynamics, combined with a strategic approach to remuneration and benefits, will empower organisations to identify optimal practices tailored to their unique needs and drive effective talent management in a highly competitive environment.”

She offers the following advice.

Skills market dynamics in an evolving landscape
South Africa’s economy is being reshaped by post Covid pandemic adaptation, demographic shifts towards a more youthful workforce, energy transitions, digital transformation, as examples. These reference points, together with ongoing economic reforms and policy interventions, are dynamically shaping the skillsets required for South Africa’s workforce to remain competitive and resilient. The most in-demand skills in 2025 include:

●       Technology and data: Data scientists, AI specialists and IT security analysts are critical as businesses digitise operations.
●       Renewable energy: Roles like solar PV technicians and energy project managers are booming due to government and private sector investment in renewable energy solutions.
●       Artisan trades: Skilled electricians, welders and plumbers remain in short supply, driven by ongoing infrastructure development and the urgent need to upgrade and maintain municipal services.
●       Healthcare and biotech: the post covid era has created a growing need for telehealth specialists, given the rapid expansion of remote healthcare delivery, as well as biomedical engineers who can drive innovation in medical technologies in line with the shift towards digital first health solutions.
●       Digital marketing and UX: As businesses expand online, creative and digital roles are surging, driven by the need to craft compelling brand narratives and ensure intuitive and inclusive experiences that attract and retain customers across diverse markets.

What’s working: Lifelong learning, upskilling initiatives and responsible flexibility in pay and benefits—supported by digital platforms, financial education and regulatory changes—are helping workers adapt their skills in response to these shifts.

What’s not working: The pace of skills development and technological adoption is still lagging demand, especially in rural and underserved areas.

Talent management needs evolving strategies
South African businesses must rethink how they attract and manage talent in response to global trends and local challenges.

What’s working
●       Strategic use of HR analytics: Advanced HR analytics are enabling companies to track performance in real time, predict workforce requirements, and refine remuneration strategies. This data-driven approach is helping business and HR teams align skills development as well as pay and benefits strategies with both individual expectations and organisational needs.
●       AI-driven recruitment: Larger firms are using AI to streamline hiring processes, manage bias and meet employment equity targets.
●       Remote work models: Hybrid, remote and flexible work options are helping companies tap into broader talent pools, develop choice-based EVPs and improve retention.
●       Skills-based hiring: Employers are prioritising proven competencies over degrees, opening doors for non-traditional candidates.

What’s not working
●       Slow tech adoption: Smaller businesses struggle to implement advanced recruitment tools due to cost and complexity.
●       Retention challenges: High turnover in critical roles—especially in tech, finance and healthcare—continues to strain business strategy execution.

Pay and benefits are a mixed bag
South African employers are under pressure to offer fair, competitive and flexible remuneration packages amid rising cost of living pressures and talent mobility.

What’s working
●       Skills-based pay: Organisations are increasingly rewarding skills over formal qualifications, aligning pay with market demand for critical skills.
●       Customised and flexible benefits: Static reward structures are being replaced by personalised benefits tailored to employees’ life stages and career aspirations. Organisations are investing in adaptable packages that include flexible retirement contribution options, mental health support, wellness programmes and additional leave benefits. This shift reflects a deeper commitment to employee financial wellbeing and inclusivity.
●       Purpose-driven variable pay: South African companies are increasingly linking variable pay—such as bonuses and incentives—to broader environmental, social and governance (ESG) goals. This approach not only motivates performance but also aligns employee rewards with corporate purpose and societal impact. Short- and long-term incentives are being used to reinforce accountability and drive stewardship.
●       Equity and inclusion: Pay transparency and equity audits are helping address historical disparities and improve employer branding. Wage gap transparency is being driven by regulatory changes, such as Section 30A  and B of the Companies Amendment Act, which will require publicly listed and state-owned companies to disclose various wage gap ratios once effective. Some organisations are embracing this not just as a compliance measure but as a moral imperative, using wage gap analysis to build trust and reinforce commitment to fair and responsible pay.

What’s not working
●       Static salary structures: Many companies still rely on outdated pay and benefits structures that don’t reflect market realities, especially given the diversity of the five generations in today’s workforce.
●       Limited gig worker protections: While platforms like SweepSouth and M4Jam offer flexible work, gig workers often lack access to meaningful benefits and fair pay.
●       Over-reliance on aggressive salary increases: The era of rapid salary growth peaked in 2023. In 2025, companies are pulling back from aggressive pay hikes, opting instead for more sustainable increases. While this stabilisation is necessary, it has led to job hopping challenges into high-demand sectors which offer premium pay.

How remuneration and reward practitioners can support employers
Remuneration and reward practitioners play a pivotal role in helping organisations win the talent war. In South Africa’s evolving labour market, their strategic influence can make the difference between attracting top talent or losing it to more agile competitors. Here’s how they can support organisations effectively:

Align pay with market realities
●       Conduct regular benchmarking: Use up-to-date market data to ensure pay, benefits and incentive structures reflect current skills demand, especially for critical and scarce skills.
●       Implement skills-based pay: Convince employers to move beyond traditional job grading and banding to reward critical skills, competencies and output-based performance.
●       Introduce pay transparency: Build trust and ensure accountability by clearly communicating fair and responsible pay philosophies, remuneration policies and progression paths.

Design flexible and inclusive benefits
●       Customisable benefits packages: Offer modular benefits that employees can responsibly tailor to their needs, for example, flexible retirement contributions, relevant healthcare and medical aid, wellness, skills development, childcare or remote work support.
●       Mental health and wellbeing: Prioritise psychological safety through access to counselling, mental health days, and burnout prevention programmes.
●       Financial wellness: Provide tools and education to help employees understand money, manage debt, save and plan for retirement—especially important in South Africa’s low savings environment.

Support strategic workforce planning
●       Partner with talent teams: Collaborate with HR and talent teams to identify and develop future skills needs and align pay and benefits strategies accordingly.
●       Scenario planning: Use data to model different workforce scenarios—for example, back to office, hybrid work, automation—and adjust talent management strategies proactively.
●       Performance and retention analytics: Monitor performance and turnover trends and use predictive analytics to identify top talent, manage flight risks and intervene with targeted retention strategies.

Promote fairness and equity
●       Conduct pay equity audits: Regularly assess and address pay disparities across jobs, gender, race and other demographics.
●       Support employment equity goals: Align reward strategies with transformation objectives, ensuring fair access to career growth and rewards.
●       Inclusive recognition: Design recognition programmes that celebrate diverse contributions and foster belonging.

Enable agile reward practices
●       Short-term incentives: Use spot strategy aligned bonuses, project-based rewards and impactful recognition to motivate performance in fast-changing environments.
●       Total rewards communication: Clearly articulate the full value proposition, salary, benefits, culture, purpose, learning and growth to attract and retain talent.
●       Digital reward platforms: Leverage technology to personalise, automate and scale pay and benefits delivery.

Champion continuous learning
●       Link rewards to learning: Incentivise upskilling and reskilling through learning stipends, certification bonuses or career development pathways.
●       Support career mobility: Reward internal mobility and cross-functional experience to build a resilient and engaged workforce.

Winning the war requires agility
“To win the talent war in South Africa, organisations must embrace agility in pay structures, benefits design and talent management. Investing in skills development, adopting inclusive and flexible total reward practices, and leveraging technology will be key to staying competitive in 2025 and beyond” says Sebesho. 
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ENDS
 
MEDIA CONTACT: Idele Prinsloo, [email protected], 082 573 9219, www.atthatpoint.co.za 
 
For more information on SARA please visit:
Website: www.sara.co.za 
X: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association

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