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There has been an exodus of SA’s skilled workers

If professionals are to be persuaded to stay, ‘policymakers need to be very careful’ in what they do, how they roll out certain things, reckons PPS CEO Izak Smit.

FIFI PETERS: South Africa is losing quite a number of highly skilled professionals. I suppose this is not bad if these professionals are finding better opportunities or perhaps a greener pastures elsewhere – but it’s not so great for the economy because this is a loss of individuals who could have otherwise contributed more to Sars’s kitty, and it has a potential impact on jobs.

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But we’re going to speak about the reasons further with Izak Smit, CEO of the Professional Provident Society, or PPS. Izak, thanks so much for your time. I recall the skills flight from South Africa – in fact, from the African continent – being a problem for some time, but would you say that things have become better or are things getting worse?

IZAK SMIT: Hi Fifi, thanks for inviting me to join you tonight. Look, it has its moments, sometimes more, sometimes less. At PPS perspective our members are all professionals with professional qualifications, and we are always quite interested in why they might leave us. We are very interested in how we can keep our members on board. When we ask them the reason for leaving, what we’ve seen actually fairly consistently over time is it’s about one in five cite emigration as a reason. So about 20%, 25% say ‘I cannot stay a member any more because I’m going overseas. I’m leaving the country’.

FIFI PETERS: Why are they leaving the country? Is this greener postures or have they lost hope in the opportunities here?

IZAK SMIT: We don’t go deeper. But I don’t think it takes a lot of rocket science to figure out why people look. Sometimes it’s for positive reasons. They’re not running away from something; maybe it’s a smart career move – and some of them do come back, I must just add. So it’s not only one-way traffic.

But there are reasons, unfortunately, negative reasons – for example taxation. What is important to professionals over the years that we’ve worked, are things close to them like education, education of their children. Also personal safety and security and health. Those are the things that sometimes from a social perspective are the reason. But then for many of them obviously it’s about careers and it’s sometimes also about lifestyle.

What we also find is professionals don’t necessarily say where they are going. They often choose cities, not even countries. It’s opportunities in a particular city that they might move to.

FIFI PETERS: Which cities stand out the most?

IZAK SMIT: Traditional South African expat places, some of the Anglo-Saxon countries – the UK, Canada; and Australia is a big one. We also a good few years ago started a business, PPS in Australia. That’s a very big one for South African professionals. New Zealand as well. These days the world is their oyster. It’s sometimes the far East, it can be the Americas. I think it’s perhaps fair to say the Western traditional Anglo-Saxon countries these days. It’s often interesting places everywhere.

FIFI PETERS: Would you say that the exits of late could have also been boosted by the fact that in 2020 most people would have had to put their emigration plans on ice because of the lockdowns, everyone being brought to a standstill; and when there was some sort of easing of the restrictions people could go out again. Would you say that the pandemic and the lockdown has had an impact on the exits?

IZAK SMIT: Gosh, we saw that in our statistics as well – 2020 was slower and then it picked up again this year. But, Fifi, talking about the pandemic, the one thing all of us have experienced is just this whole digitalisation. These days many professionals in their professions, I always say, ‘ship’. But it’s not assets. They can basically work from anywhere.

What we start to see more and more is professionals in South Africa doing work for overseas businesses, but also people working overseas doing work for South African businesses. You can basically base yourself not necessarily in South Africa, but still work for a South African business.

FIFI PETERS: Izak, you said around 25% of your members have cited emigration as the reason for leaving the Professional Provident Society. What about the other 75%? What have their reasons for exiting been?

IZAK SMIT: There are a couple. Sometimes it’s just the change in a particular need. That’s also where our financial advisors come in. Maybe they might not need the cover any more – that’s often a reason. Obviously people closer to retirement might not need certain protection any more. Sometimes, sadly, for financial reasons. Even professionals are not immune to economic forces, and a lack of funds is a result of that. There are also various other reasons why the cover gets cancelled.

FIFI PETERS: What then is the potential impact for the economy and jobs?

IZAK SMIT: Yeah, that is a very sad one. If you’ve got emigration, particularly of your professionals, that’s very bad for the economy. It’s bad for the tax base. As we know, we’ve got a very skewed Gini coefficient in South Africa; very few people pay income tax. We don’t want to lose those people who would go and pay their tax elsewhere.

But the impact is wider. It’s job creation. You don’t lose only that particular job; remember professionals create jobs all around themselves. There are people in their practices, people at home, there are gardeners. They always say they pay a portion of so many other people’s income. A typical professional might need a dentist at times, a GP, a mechanic, a tax advisor, and so forth. There’s a portion of those people who are going to lose all that income. So it’s not only that single job that you lose, it’s the multiplier effect of other jobs that’s also impacted.

FIFI PETERS: Izak, I wonder if there’s an opportunity to take the survey further and find out exactly why people are choosing to emigrate, because maybe, when we understand the reasons why, we can bring a call to action to help offset this, and help reduce the leakages in the tax base that you have just described.

IZAK SMIT: Yes, Fifi, we from time to time do have these surveys. In fact, we did quite a big survey in 2019 among our members around the NHI (national health insurance). Also our message here to policymakers is to be very careful in what you do, how you roll out certain things. In that particular survey astonishingly about 70% – it went to more than 3 000 people – said the ‘why’ is something like the NHI, the way it’s implemented that might impact decisions where to work, which country to emigrate to, that kind of thing.

FIFI PETERS: Izak, we’ll have to leave it there for now. But thanks for bringing our attention to something that is quite important. I hope the decision-makers are listening and thinking about how they can make it more conducive for some of these skilled professionals to stay and contribute more to the economy, to the tax base and also to job creation.

That was Izak Smit, CEO of the Professional Provident Society.

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…i.e. I can conclude that South African “policyholders have NOT BEEN very careful in what they did…”

And this plays into the hands of foreign consulting firms, for example Andrew Henderson from (https://nomadcapitalist.com) has a slogan that rings so true:

“GO WHERE YOU’RE TREATED BEST”

I left SA with just a matric and R200 in my pocket.
My skills further developed because i am a not BS hard working employee.

My questions is why are people staying when the world both developing and developed are willing to pay you a fair wage and let you live a decent life, make no mistake there is a skill shortage.

Some advice:
Do not doubt yourself regardless of your age and experience
Make a decent CV
and Reach out the many Saffa communities aboard.

Its not easy at first but as South Africans we do understand that and adapt.

I will keep fighting for SA, that is to get rid of the scum who have rid me of my home.

Very true PurgeCoin. Thumbs-up to you, my friend!

Who would have thought that – by making the lives difficult for the skilled professionals who have the resources (money, skills and drive) to go live in another country – that many of those professionals will pack up and leave?

The world wonders…

It is very simple. A recent survey reported that 5,2% of the population pays 92% of the income tax and 85% of the VAT. But then we have 16 million people on social grants, free health care, free school education, free university education and free RDP houses. Add to that free electricity, free water and free refuse collection because people simply don’t pay. We also have a gigantic parliament with 400 members, hundreds of traditional leaders and 2,1 million civil servants who clearly don’t work a lot. And then they ask why people emigrate.

Well that is due to inequality. You don’t want to deal with that but you do want to whine about paying taxes for everyone else.

Very simple solutions. Quit your job or immigrate.

I’m totally up for a progressive tax system and would be happily paying my tax if it was actually spent on addressing inequality. Instead it’s blown on useless cadres their associates, who in the worst case steal the money to buy Range Rovers, or in the best case are simply incompetent and inefficient. This grand scale looting and waste of tax money is however allowed by the ANC’s constituency who do not punish them at the polls, and who are largely the beneficiaries of the crumbs thrown at them. It’s a toxic system where the “unequal” empowers the corrupt in exchange for a pittance. I for one feel I have paid my dues and the poor in this country are simply harvesting the fruit of their vote – crying inequality means nothing unless the state is held accountable.

Hahaaa.

Yaaa. Where will “equality” come from when some (if not most) go in full anc regalia to protest against the very anc they support????

“Inequality” between the ears seem to be the problem here.

Obvious if everyone has nothing there is perfect equality.

Again, you need to do something about it and whining both ways doesn’t help.

If you don’t want equality and don’t want to pay for everyone then leave. If you don’t want to pay for everyone then quit your job. Simple.

I wonder why you need to put the words “Big Time Exec” in your name? I read your comment it seems quite a personal attack on a very valid comment.

I also spent time in Bloemfontein, was proud of it, currently it is quite a dirty place, and not due to inequality, no due to laziness. Taxes get paid but the streets do not get cleaned. Some big time executives not doing their jobs I say.

Inequality is a natural phenomenon. Some trees arre large and thick such as a Giant Sequoia but they need lots of water to feed off and then you get trees such as the acacia that lives in very water scarce areas.

So now if you want to force equality in a resource scarce situation you get a lot of big fat lazy executives living off scarce tax resources.

Margaret Thatchers words ring very true. “The only thing wrong with socialism is that sometimes you run out of other peoples money.”

Your mind/thinking is abit clogged.
Your standards are declining by the day!

Your cadres in the ANC have had 3 decades to resolve poverty and inequality…. and they worsened it by STEALING FROM THE STATE / CAPTURING THE STATE.

A matter of time before everyone leaves…. then you will have WORLD BANK / IMF bailouts and a SA riddled in Debt…. As it is the Debt to GDP ration is at a all time high.

Thanks. Is that not obvious? What are you going to do? Apart from preaching to the converted? There are two options to avoid paying for everyone. Pick one or keep quiet.

No Mr Bloemfontein – its quite simply the unemployable breeding like rabbits and perpetuating their own cycle of illiteracy, poverty and inequality. That is 100% their doing

@Big Time Lootfreely House Shill:

Immigration means coming to SA. You meant “emigrate.”

Again, whatever Lootfreely House is paying you, it’s too much.

People are taking your advice seriously – they are quitting their jobs and leaving as the article indicates. However, by leaving it does not solve any inequality issues but in fact aggravates them because the people leaving are the people who create employment.

@FokkolinBloem:

You meant “emigrate” (not immigrate).

Glad that you want to pay tax for everyone. Your type are getting fewer as people emigrate…starting with an “e”.

Why are so many Africa countries people want to come to South Africa if there is inequality. The want to come to South Africa because they will have a better life which the hardworking people must pay for – people leave because the” inequality” is affecting them. It is simple common sense, people want a better life, that is why the poor Africans want to move here – it is a positive for them, and a negative for the people keeping the economy alive, leave if you can, the country is going one way, we all know it, but SA it is still a better place for the rest of Africa.

Many of those who emigrate have taken a view on the probable economic as well as security future of South Africa and the impact it would have on their families and offspring’s.

So we have established it is easy to leave SA if you have skills.

Therefore, those who are able to predict the certain doom and failure of SA but who don’t actually do anything about it to protect themselves (no, writing essays to preach to the converted) must be lacking something….

no, it’s not that easy to leave. if you’re over 40 it’s hard. regardless of age, you leave your family, friends and country of birth; uprooting your entire life. those who stay pay taxes and vote; hoping for a miracle. However, the small economically active part of the population is milked dry by a failed democracy: a subservient majority who simply will not vote for governance, but rather race-based populism and nationalism

If you more of a liability than an asset to a proper country, then perhaps you are in the right place.

If the pain of ‘uprooting your family’ outweighs the risks of doom, then you clearly don’t believe your own prophecies. Sorry.

your arrogance is only matched by the stupidity of your inferences. if I was younger I would have left; simply not an option anymore. so i stay and do my best, like most people. and we will not shut up like you so self-assuredly tells us to; we will speak out against what we see; and we will fight where we can. but unless disenfranchised south africans take ownership of their democracy and vote out the useless and corrupt, the noose will only tighten around their necks.

Too old to take a flight even when feeling the noose around your neck. Must be a comfy noose. Interesting.

what a pity MW is not doing more to keep trolls like this off the comments section. Most readers come to MW to be informed and up to now the comments section has been a really invaluable resource to add info and debate. It’s been a wonderful place to learn. We have really astute folk like sensei, johan buys, pwgg and others who are clearly clever people and conrtibute to discourse. Inane and silly comments from guys like this don’t belong here. It detracts from the quality of the site IMHO. Please cull these types MW.

This is his fourth alias/handle in the last two months, that I’m aware of anyway.

“Bib”/”Bibby” was a two-for-one special.
Then “Aonk”.
And now he appeared as “Bloemfontein big time exec”.

He’s definitely on a mission.

If I were Suren I’d block his IP address.

Not how IP addresses work. Ask the IT teacher.

Wow, you’re so ignorant.

Seeing that MW is running WordPress, and if I had access to the admin area, it would take me less than 10 seconds to block your IP address from ever leaving a comment here again.

But keep spewing your bile. You’re going to need a fifth alias soon.

Taxes and EVERYTHING will keep going up as this country builds a dependent culture of people reliant on government grants. Grants that are paid by my tax money. Just remember the president voted 3X for confidence in Zuma?? Do you think he knew what was happening?? Well if not that is quite an inept person!

I just got a 40% raise. 44% of it went to sars. guess who my number one enemy is now.

and I pay 7.5k after tax for curro for one child and 5k for med insur. Better add useless govt to that list as well.

lol, you must have a LOT of kids because who would pay that much for curro!

I see why folks find it cheaper to emmigrate to access public school than stay and pay private in SA. Public schooling and health are an issue in SA

But all will come right. The Corrupt ANC is “fighting corruption” on all fronts and introducing new “structural reforms” every month (or so they say).

Another option is to retire earlier – my situation. Why struggle with SARS and cANCer? It is nice to receive extra money every month but it is nicer to work with (intelligent) people on interesting projects. However, the continuous theft of tax money by ego-inflated politicians is disheartening. The plus points are that I will pay significant less tax as an ex-professional living on a reduced income (non-Rand) and I will have reduced stress levels.

Why is your income reduced as a retired ‘professional’? Did you forget to save for retirement?

It is exactly this poverty of intellect that you and the cadres display that has reduced the RSA to the state it is now. You set remarkably low goals for yourselves and consistently fail to achieve them.
You had a fantastic opportunity to prove the oom’s wrong, but you have failed miserably. At least you score 10 out 10 for something though.

I say this to everyone that wants to leave go, do not be absent in our struggles and turn up in our success. Everyone blames the government, blame taxes being paid, blame failed policies, blame unemployment, blame corruption, blame racism, blame BEE, blame not enough of this and that. It is this ideology of self that creates inequality in South Africa, do not preach to me about property rights, do not preach to me about corporate taxes, do not preach to me about skilled people leaving etc when none of what is being said falls squarely on yourself. What is happening and what has happened we all played a part in it directly or indirectly. It is easy to ridicule when you are not facing what those undernourished underprivileged people face. it is easy to read reports on excel and sit behind a keyboard and pull up fancy numbers to make a statement. It is easy to not go to bed hungry and still complain while everyone is starving at your peril. It is so convenient and easy to blame everything happening on the government front and yet we as individuals do nothing about it. I am educated and do I give a heck about private corporations and the government for stuffing up and aiding inequality,, no I do not, I will keep paying my taxes and adding value to single lives one by one. If you want to complain and have the resources and means then leave. We that are remaining loyal and faithful will do our best to correct build and renew what is left of SA. A house is always the best built from the ground up.

Lucienne, you say ‘do not preach’, but if nobody ever preached about apartheid, would that have been right? If nobody preached about racism, would that be acceptable? Would that have been a good strategy during the apartheid years, or was it better to shine a light on what was wrong? (And bear in mind that more was accomplished by words, than by guns or violent protests.) You do not change what is wrong by being silent. Let people complain, for the more they do, the more politicians and the uninformed majority stand a chance of getting the message that we can’t persist with what we’re doing. After all, you can’t use your right to freedom of speech to tell other people to be silent. Freedom of speech works both ways (even the chap from Bloem has the right to voice his opinion, even if his delivery sucks big time.) The same applies to telling people, who complain, to leave. Wouldn’t it be better to have people here who complain (preferably if their complaints aren’t baseless, but backed up by facts) than to send all the complainers away? Did everybody who complained about apartheid leave? No. We needed dissenters in the country to get things changed around. Today we still need people to know who, what and where the mess was created and that can only be accomplished by spreading the truth. Something like the Zondo commission is a start, but we need ordinary people to complain en masse. My question to you is this; why do you really find it so offensive that people complain? Is it that you are frustrated by your own impotence to make change come about? Is it that you find the truth inconvenient? Is it, perhaps, because of shame, knowing that things have dramatically become unstuck under a democratically elected government, of whom we all expected so much? Is it because the complainers remind you of the depth of the rot, which reminds us all that it will take decades to sort out? Is it that your loyalty and faithfulness is to a lost cause?

Why are so many Africa countries people want to come to South Africa if there is inequality. The want to come to South Africa because they will have a better life which the hardworking people must pay for – people leave SA because the” inequality” is affecting them. It is simple common sense, people want a better life, that is why the poor Africans want to move here – it is a positive for them, and a negative for the SA people keeping the economy alive, leave if you can, the country is going one way, we all know it, but SA it is still a better place for the rest of Africa.

You won’t attract people if you do these things:

1. Overtax
2. Over-regulate
3. Discriminate against minorities and who pay the most tax
4. Threaten more taxes
5. Threaten to take away property rights
6. Make the country ungovernable
7. Make crime pay handsomely

Start working on those things and maybe people won’t leave

End of comments.

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