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New Critical Skills List due April 2019
In a recent statement by President Cyril Ramaphosa on economic stimulus and recovery plan for South Africa, he said that Government is decisively and rapidly accelerating the implementation of key reforms that will unlock greater investment in important growth sectors. Following the President’s address, the Minister of Home Affairs, Malusi Gigaba, briefed the media on the amendments to the visa regulations. While some of the changes, such as the visa requirements for highly skilled foreigners being revised, was well-received news, some of the reportedly “new” changes were implemented in South Africa years ago. “Foreigners studying to pursue a critical skill qualification in South Africa have been able to apply for permanent residency since 2016. Similarly, business people from BRICS countries have been able to obtain business visas that are valid for up to 10 years since 2014. These directives work well, but they are not new,” Marisa Jacobs, Director and Head of Immigration and Mobility at Xpatweb, points out. New critical skills list Arguably the most welcome visa regulation revision to promote foreign investment and encourage migration is the changes that are being planned to the critical skills list. Gigaba announced that the Department is currently engaging with respective Government Departments and business sectors for their input. The new critical skills list is expected to be released in April 2019. “Businesses have the opportunity to provide input on the critical skills list. As such, HR professionals, recruiters and business owners are encouraged to ensure they take this opportunity to provide input on the skills that they are most struggling to source locally. This will allow organisations to attract foreign workers to South Africa and compete for talent,” says Jacobs. To aid local businesses and provide a platform for business to collectively give their input to the Department, Xpatweb has launched the 2018 Critical Skills Survey which takes less than 5 minutes to complete. The results will be submitted to Home Affairs and Parliament concerning the White Paper on International Migration and the Department of Higher Education and Training’s National List of Occupations in High Demand. “Now is the time for the private sector to make sure the skills they need are on the list and make use of the opportunity shape law,” adds Jacobs. Some of the skills that Jacobs expects to either stay on the current critical skills list or to be added include highly skilled senior finance executives such as CFO’s, C-suite senior executives as well as a variety of skills in the ICT sector. The Corporate General Manager category is expected to be removed and replaced with more defined roles. “There is a skills shortage in South Africa and we are competing globally for these skills. For the economic stimulus and recovery plan to work, South Africa needs to attract critical skills more easily. Revising the critical skills list, coupled with revised visa requirements for highly skilled foreigners is a vital step to attract knowledgeable and experienced resources to our country,” concludes Jacobs. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on Xpatweb please visit: Website: http://www.xpatweb.com/
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If we are to meet President Ramaphosa’s goal of boosting foreign investment and attracting skilled people to our country, we urgently need to optimise South Africa’s current visa application process, urges Marisa Jacobs, Immigration Specialist at Xpatweb.
She adds that South Africa needs to prioritise creating a more holistic evaluation process for skilled foreign workers and has to make sure their visa applications run smooth and seamless. “There are specific immigration and business challenges that exist for foreign groups within South Africa and I believe these challenges are hampering investment into the country. The long turnaround times and costs related to obtaining work visas for foreign nationals has been raised as a key area of concern for international companies looking to grow their footprints within South Africa, an issue that could have many positive consequences for our economy and people,” says Jacobs. Should foreign workers be forced to surrender their passports? The costs involved in securing employment visas to work in South Africa is high, particularly in certain visa classes that require the application to be made in the applicant’s home country. The costs of obtaining employment visas is further exasperated by the South African Embassy requiring foreign nationals to surrender their passports for the duration of the processing period. “When workers are forced to surrender their passports, they are rendered without a passport for the period that the South African High Commission takes to process the application. These applicants are then unable to travel during this period, which can impede their work commitments or personal travel needs,” explains Jacobs. Visa applicants not only wait long periods for their work visas, but the waiver and appeal application processes that they may need to pursue also regularly lead to prolonged waiting periods. “When comparing the waiting period as well as the requirements for work visas in South Africa to other countries, ours are considered onerous and burdensome. Besides the long waiting periods, visa applicants become frustrated with inconsistencies encountered when dealing with the various foreign embassies,” says Jacobs. Inefficient visa applications deter skilled foreigners Besides impeding foreign investment, these issues also extend to local companies who are looking to hire skilled workers from overseas. South Africa is currently competing with a myriad of other countries to attract and retain critical skills in sectors such as ICT, engineering,skilled trades, executives and medical professions to name a few. Burdensome visa processes could potentially deter skilled workers from taking up a work opportunity in the country. “When the Department of Home Affairs adjudicate visas for foreign nationals who are applying for critical skills positions in South Africa, they in many cases place too much emphasis on qualifications as opposed to experience even though the Act makes a clear distinction” says Jacobs. A person with 30 or 40 years’ experience in a profession may be overlooked if they don’t have the related qualification, which leads to local companies losing out on highly knowledgeable people. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on Xpatweb please visit http://www.xpatweb.com/ Author: Marisa Jacobs, Director and Immigration Specialist at Xpatweb The starting point when bringing in a foreign specialist into your business is the Critical Skills List, which notes the professions where Home Affairs issues Work Permits due to areas where there are shortages of skills. Foreign nationals who therefore have the skills listed on the Critical Skills list may apply for a Critical Skills Work Visa to work in South Africa. The list has been highly criticised, from not including many business skills, to certain categories being “abused” by a wide interpretation. Over the last 18 months there has been talk of refining the list further with the “Corporate General Manager” category top of the chopping block. This new list is highly anticipated with wide spread speculation on what will be included, or perhaps more importantly excluded. Do you need a new Museum Manager, Director of Marketing or IT specialist? The Department of Higher Education and Training (DHET) has published the "National list of occupations in high demand: 2018” listing over 370 high-demand occupations in South Africa. The occupations listed are those that show relatively strong employment growth and/or are experiencing shortages in the labour market or which are expected to be in demand in future. The Critical Skills list published in 2014 was developed in conjunction with the occupations in high demand and the scarce skills lists of the DHET. It is therefore expected that the 2018 list will again be consulted when revising the Critical Skills list and as such may provide a window into what we may expect from revised Critical Skills list. For the first time the DHET list has been divided into three levels of demand, highest demand, higher demand, and high demand. Cross referencing the occupations on the above DHET list to the current Critical Skills list published in 2014, we highlighted below some of the occupations still showing high demand as well as a few new and emerging occupations not on the DHET list before and not on the current Critical Skills list. Please click here for the full list http://www.xpatweb.com/wp-content/uploads/2018/07/National-list-of-occupations-in-high-demand-2018.pdf ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on Xpatweb please visit: http://www.xpatweb.com/   South Africa’s skills shortages in critical sectors remain an obstacle to growth. Renewed efforts to find solutions and to place skills development at the centre of the country’s development agenda are welcomed. However, there are critical gaps which require immediate attention.
Search for critical skills Marisa Jacobs, Head of Immigration and Mobility at Xpatweb, says South Africa should follow the international example: “Import the skills until you have the skills”. The 2017 Critical Skills Survey, done by her firm, shows that 77% of the participants struggled to recruit “critically skilled” individuals locally, but 76% of the participants indicated that they could find the skills internationally. However, 90% found the process of recruiting internationally to be prohibiting. Jacobs says this is largely a “perceived problem”. Although the process may be onerous in terms of the documentary burden and the time to process applications for work visas, it is not preventing firms from importing critical skills. In short supply The survey found that employers and multinational companies found it most difficult to recruit engineers (22%). However, information, communication and technology (15%), financial specialists (10%) and specialised technical skills (9%) also prove to be tough areas to find people with the right skill sets. The Department of Home Affairs published a list of at least 12 sectors where the country is in need of critical skills. This include agriculture, architecture, economics, information communication and technology, engineering and health professionals. This list has remained unchanged since 2014. Migration policy Government’s 2017 White Paper on International Migration sites the lack of strategy in the current international migration policy as contributing to the skills shortage. The result is South Africa’s inability to respond to the shortage issue. The paper further states that the policy is not linked to the skills development and investment priorities of the country and prevents the country from effectively competing for requisite skills in a proactive and flexible manner. Jacobs notes that in times of economic growth there may be specific skills that are immediately needed. There must be flexibility in the immigration system to allow for a quicker turn-around time in acquiring these skills internationally. “Once the projects are off the ground the transferring of skills become critical for sustained growth in the country,” says Jacobs. However, the importance of importing skills until the country have the skills cannot be emphasised enough. The white paper also states that the migration policy “lacks cooperative strategies for attracting and retaining international migrants with skills and capital, and a historic blindness to the retention of international students studying towards occupations that are needed by the economy”. Keeping the skills Jacobs further notes that companies in need of ICT specialists have found the skills they need in India, whilst companies in mining have been successful in attracting talent from Australia. Statistics from the white paper indicate that from June 2014 to January 2016 the country issued permanent residency permits to 2,175 skilled foreigners. This represented 7% of the total permanent residency permits granted in the period. This is a concern since the aim of the policy is to promote economic growth through the granting of business, critical skills, and study visas, government states in its white paper. Jacobs says the importation and retention of critical skills does not take away job opportunities from South Africans, since these skills are not available in the country. However, they help to get the economy going which will, in the absence of specialised knowledge, stagnate. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on Xpatweb please visit http://www.xpatweb.com/ It is now a matter of when and not if companies employing foreign nationals will be audited by the Department of Home Affairs (DHA). The arrest of at least 25 illegal foreign nationals at the beginning of May by the Cape Town Police, accompanied by officials from the Department of Home Affairs (DHA), sparked a scramble among the local business community who are concerned that they may unknowingly be employing foreigners who are working in the country illegally.
Marisa Jacobs, Immigration Specialist at Xpatweb, says that considering recent arrests that have been made, HR professionals, managers, business owners and CEOs need to make sure that systems are in place to ensure that expatriates are legally employed within their business. “The Department of Home Affairs has warned that they will increasing the number of audits and investigations among South African companies that employ foreign nationals. This isn’t an empty threat and they are clamping down on foreign nationals who contravene the act as well as employers who are illegally employing foreigners. Anyone who is deemed responsible for the appointment of the person could face repercussions which means that everyone from HR managers to CEOs could face fines or imprisonment,” says Jacobs. | Pitfall no.1: Employees job titles don’t match work visa job titles Making sure that an employee’s job title matches the title on their work visa is a vital step to ensuring that foreigners are complying with the Act. “It can happen that a company employs a foreign national and that the employee is promoted within the business. When an employee changes jobs and their job title changes, their work contract no longer complies with the conditions of the visa. The process to update the visa so that it is in line with the work contract is relatively simple and straightforward, but it’s a step that many employers overlook, and this can put them at risk to non-compliance,” says Jacobs. Pitfall no.2: Information on permits don’t match DHA system information If a company has employed a foreign national who has been working for a different South African company, their current employer may not know if the worker’s visa is legitimate, whether it was obtained in the correct manner or even if it was issued by the DHA. “In this case, we recommend that employers contact the DHA to check what information is on the system. This additional check beyond looking at a work permit and visa is needed to ensure compliance with the Act,” says Jacobs. Pitfall no.3: No skills transfer plan Another potential pitfall that companies should take note of is the condition relating to the transfer of skills. Certain categories of work visas for foreign nationals stipulate that the skill that is being imported needs to be transferred to local citizens. If a company is audited by the DHA, the company may be asked to present their skills transfer plan. “One of the main reasons South African businesses employ foreign nationals is because we don’t have the skills, knowledge or expertise within our borders. Having a skills transfer plan in place is a great opportunity for local employees to upskill themselves and learn from foreigners so that they can cultivate the skills that are needed within their business as well as the country. Besides requesting a copy of the company’s skills transfer plan, they may also request to interview people who have been earmarked to learn from the foreign nationals,” concludes Jacobs. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on Xpatweb please visit: http://www.xpatweb.com/ Authored by: Marisa Jacobs, Head of Immigration and Mobility at Xpatweb
The work permit process can be time consuming and even painful, depending on your permit categorisation. One question often asked is whether an expatriate should consider a Permanent Residency application sooner, effectively lifting the expatriate’s status above the noise of normal work permit requirements. We found that there can be a significant upside however, depending on the complexities there may also be adverse consequences. Since the release of the White Paper for International Migration in South Africa last year, more and more expatriates are seriously considering applying for Permanent Residency before this category is permanently removed from South African immigration law. Why Permanent Residency? Permanent Residency allows the holder to live and work in South Africa unlimitedly and includes the right to work without restriction, engage in business, own property, study and do all activities a citizen is permitted to do except for voting in the South African elections. You may only do the latter once you have been naturalised as a South African citizen. Permanent Residency in South Africa also allows its holder maximum flexibility with regards to entry and exit through the country’s borders. Where an expatriate and family hold this status, they no longer need to go through the work and residency visa process and for all practical purposes this means that the employer deals with a normal South African employee. What does the Act say? Permanent Residency is granted to a foreigner who can meet the criteria as set out in Sections 26 and 27 of the Immigration Act of 2002, as amended, and Regulations 23 and 24 respectively. Section 26 is applicable to foreigners who have been residing in South Africa based on their work visas for a minimum period of five years and is also applicable to spouses and dependents of South African citizens or Permanent Residency permit holders. Section 27 is applicable to foreigners who are in possession of a permanent work offer in South Africa, have exceptional skills and qualifications, intend to establish a business in South Africa, qualify as refugees, qualify as retired persons, are financially independent, are relatives (biologically or judicially adopted) of a South African citizen or Permanent Residency permit holder or have been in a spousal relationship with a South African citizen for more than 5 years. A word of caution Always keep in mind any adverse tax and exchange control considerations, meaning that whilst Permanent Residency may at first glance appear like a good idea from an entry perspective, from a holistic planning perspective, it may be considered a less favourable choice. This is where holistic consideration becomes important, i.e. the fiscal aspects and tax planning must be considered as part of the service. Useful Facts:
ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on Xpatweb please visit: https://www.xpatweb.co.za/home/ Author: Marisa Jacobs, Director – Head of Immigration and Mobility at Xpatweb (a division of Tax Consulting SA)
A new report compiled by expatriate Xpatweb, titled Critical Skills Survey Results 2017, confirms that local companies are hard pressed to find the right expertise to achieve their corporate goals. It is therefore to every business and professional body’s benefit to engage with government to make work visa applications as easy as possible. Simply stated, South Africa needs access to better skills to prosper and compete in the global market. However, this is not a new revelation. The country’s skills gap - the difference between the professional talents needed by employers and those available among the working public - has been widely discussed and reported on in the media for over a decade. Rather, the study serves as the springboard for a viable solution. The results were obtained from 86 respondents, many of whom represent South Africa’s largest employers and international groups. Recognising the problem 76.74% of those surveyed agreed that there is, in fact, a skills shortage in South Africa. The Critical Skills List published by the Department of Home Affairs contains a catalogue of the country’s most needed competencies. These include the broad categories of business, economics and management; information communication and technology; engineering; health professions and related clinical science; life and earth sciences; professionals and associate professionals; trades; business process outsourcing; and academics and researchers. As can be seen, the demand ranges over a wide set of sectors. Solving the skills problem will take hard work and starts with an honest appraisal of the constraints. The sooner we do this, the faster we can address it. The first admission we must make is that the gap exists now and a primary, immediate solution is required. Yes, formal learning and development programmes will produce a future, technically-competent national workforce - not just adequate but world-beating. Until that day dawns, we need a stopgap. Learning takes too long According to one study (Young, 2010), South Africa’s universities and HEI’s are not able to produce these critical skills fast enough. For example, Young estimated that creating 34,000 additional engineers, technologists, draughtspersons and technicians needed over a 2-year period would take roughly 100 years in terms of current educational capacity. Likewise, learning and development programmes cannot scale to meet the immediate needs of the economy. Neither can businesses afford to wait, so an alternative solution is inevitably required. 75.29% of respondents in the Critical Skills Survey Results 2017 reported that they are better able to find scarce skills when they expand their search to include foreign nationals. This is a perfectly sensible solution - the right skills at the right level of expertise, available immediately to fill a skills gap that cannot otherwise be closed. This is supported by the fact that most of those interviewed asserted that the local market has been fully scouted for critical skills and found lacking. Unfortunately, expatriates are seen by government and occupational stakeholders as a threat to the local workforce, taking jobs from South Africans. However, since the skillsets offered by foreign workers are evidently unavailable here, this couldn’t be further from the truth. Even so, employers will need to evangelise several fundamental changes in thinking to promote their case. First, expats are a resource, not a threat. Importing critical skills into the country is no different from importing any other essential factor of production. Second, not only do they offer the competencies companies desire but also the opportunity to transfer their expertise to many local workers. As such, expatriates do not diminish employment opportunities for South Africans; instead, they create jobs by their very presence. Third, the use of expats is temporary. They are simply a bridge between today’s urgent business needs and tomorrow’s acquired competencies. Rather than replace South African talent, they will hold the fort until the reinforcements arrive. Making it happen 89.53% of those surveyed find the work visa process an obstacle to filling critical skills positions. The procedure is laborious and time consuming. However, not acquiring these vital talents will prove most costly in lost business opportunities and low competitive advantage. The South African workforce of tomorrow will energise the economy. In the meantime, the country needs a concrete way to source the critical skills to compete globally. As our survey reveals, businesses believe that the acquisition of foreign skills is the only sensible response. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on Tax Consulting please visit: Website: http://www.xpatweb.co.za/ LinkedIn: Xpatweb Facebook: Xpatweb  Author: Marisa Jacobs, Director – Head of Immigration and Mobility at Xpatweb
How difficult is it really to obtain a work visa for a foreign skilled employee? In truth, extremely easy if you know what you need and how to go about it, but near impossible if you are inexperienced and make school boy errors. Here are some expert tips to help: Don’t lie When an employee comes to render employment services in South Africa, make sure they get a valid short-term work visa. Do not take a chance and tell the immigration official this is only a business trip, when the purpose is work. It is easy to be compliant and not worth the risk. The process takes ten working days and the short-term visa is issued for three months, while it may be extended in South Africa for a further three months. New foreign boss? Don’t stress Getting a new boss from overseas is stressful enough, let alone making them think you are not competent in sorting out their work permit status and the family’s residency permits. Luckily, the intra-company transfer work visa is one of the quickest and cleanest visas to obtain. Just make sure you understand the rules and requirements upfront as one piece of incorrect guidance or supporting document, can put you back to square one. These take two months to obtain, end-to-end and where done effectively. When you need that critical and rare skilled employee What do you do when your business family just do not have an important skill that you need? There are some in the market, but they are rare and you just do not have the budget to attract and retain them? The critical skill work visa route is a real game changer, mostly misunderstood and provides a brilliant and certain means to building a superior work force. You will be surprised to know the comprehensiveness of the qualifying skills. We have always been able to find a suitable category for a genuinely scarce skill in South Africa. This category is also very attractive for the employer and expatriate. The employer gains a competitive edge on attraction and retention, as the visa is issued for the employer; whilst this category gives the expatriate the right to qualify in time for permanent residency in South Africa. One can rightly call this a win-win. Do not make this crucial mistake Stay away from the general work permit categories, except where you have a very large expatriate programme. This category has been made subject to an initial Department of Labour process, it has become virtually unobtainable. You will be promised an effective process, but after countless deadliness missed with impunity, you will still have no traction. Waiving like a pro The immigration laws of South Africa are very competently drafted legislation. This means that there are numerous special provisions which cater for situations which are unique and fail-safe clauses, which gives discretion where you need help, but need something special for your organisation. These include waiver provisions, which gives the department the right to waive certain legislative requirements. Where you have a large project, or need to otherwise bring a large group of expatriates into South Africa, this is crucial for your expatriate programme. Expatriate Wellness The work visa process should not be an isolated one. The same way that all aspects of your family needs looking after, the fiscal planning for an expatriate cannot be in isolation with the work visa process. This includes contracting correctly as expatriates have different terms and conditions of employment, expert tax planning including international tax planning, exchange control and banking planning; and even catering for their employee benefits, as normal South African benefit programmes are mostly too expensive for them and also seldom suitable. Photo caption: Marisa Jacobs ENDS  Author: Marisa Jacobs, Director – Head of Immigration and Mobility at Xpatweb
When you employ a foreign national in South Africa, the rules and best practice are significantly different for them than normal employees. One can always fit foreign nationals into an existing human resource structure, but there is either a significant and unnecessary cost thereto, or plenty of administration. Here are some pointers to ensure you make the correct start: Expatriate selection and preparation The journey starts with sourcing the correct resource for the job, which is of critical importance and must be given the necessary thought. These considerations would include the emotional and psychological effects on an expatriate employee and their family and whether their family is accompanying the expatriate on the assignment or remaining behind. Psychometric assessment that focuses specifically on a candidate’s ability to adapt to different people and situations as well as their ability to cope with pressures and set-backs can offer significant and useful insight to employers as to the suitability of a candidate and their likelihood to be successful on assignment. Immigration and work visas The work visa process needs to be tackled as soon as possible after a suitable candidate has been chosen. There are several steps to follow, which include identifying the correct category of visa for both the expatriate and their family, determining whether the applicant must apply in their home or host country, and then, most importantly, the process of collecting the necessary documents from both the employee and the employer. This can be quite a lengthy process, especially where poorly managed and the sooner it gets underway the better. Work visas are easy to understand if you know what you need and how to go about it, but near impossible where you are inexperienced. Tax planning and compliance When employing expatriates, specific tax planning is required to ensure that, among other things, a non-residency tax status is secured and solely South African source (as opposed to world-wide) income is taxable and employee benefits such as housing exemptions are optimally structured. Likewise, applying for SARS waivers on items such as home leave exemptions on rotational home leave trips can save companies large amounts of money. Obviously, of utmost importance is to ensure home and host country compliance at all times. Expatriate remuneration Expatriate remuneration can be a highly sensitive and contentious issue. It is therefore crucial that an objective and consistent methodology is used when adjusting an expatriate’s salary to the specific assignment for which they have been selected. Employment contracts or secondment agreements must be setup to ensure correct wording from a work visa perspective, optimal tax planning and compliance as well as addressing standard expatriate items, i.e. aligning your agreement to leading market practice. It is vital that an international mobility policy is formulated, taking into account market best practice, local laws and current business affordability. Companies would often make use of an “Assignment Cost Calculator” calculating the total assignment costs, including home and host country taxes. Outsourced employment Where employers bring in a group of expatriates for a fixed term period project, they often utilise an outsourced vehicle through which to employ professionals. Should it be a business consideration, one of the main benefits of this type of structure is to ensure complete confidentiality of remuneration. It also lessens the administrative burden of, for example, setting up a split payroll and administering offshore payments and Reserve Bank approval processes. Other benefits ensure the correct bank account setup with exchange control, social security clearances and expatriate specific benefits. No expatriate should be forced to contribute to a South African based retirement scheme, as they do not plan to retire in South Africa (if they do, we are in breach of tax and exchange control). Expatriates who are correctly selected and integrated deliver exceptional value to an organisation. However, end up with unhappy employees and there will be layers of frustration, as any human resource administrator who has been through this process can vouch. ENDS |
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