South Africa is on the verge of a massive human capital flight in the technology sector, as local talent has become a target of global firms that offer flexible working hours and foreign currency-denominated remuneration.
This is according to 4Sight CEO Tertius Zitzke, who cautions that attempts by local companies to meet foreign currency earning potential with rand-denominated resources will escalate operating costs, impacting negatively on businesses.
Yesterday, Zitzke reported his group’s financial performance for 2021, lamenting the impact of the brain drain his company faced during the year, calling upon the sector to re-think the hybrid working model.
“The hybrid workplace is a big challenge for businesses in Africa. ‘Semigration’ is a fact; we have people that we lost to Australia but they stay here, they get double pay. They work from 4am until 12 and then play with their kids,” says Zitzke.
“So getting the culture of bringing the workplace back is part of the solution for technology people, to get them out of their caves.
“The challenge for companies is to mix this new technology modern workplace with this new digital culture and create the type of events that will keep these young people here. There is also a move to reskill the older people as they will not easily semigrate.”
Eric van der Merwe, 4Sight CFO, adds: “The company posted a slight improvement in normalised earnings, despite the tough trading conditions experienced during the period under review, which includes spend on talent management initiatives focused on retention and training of skilled and scarce human resources.
“Countering the brain drain in South Africa to retain industry and domain skills and expertise remains a key focus for the group. Our learning programmes will help solve the skills gaps in our industry, and 4Sight will become the first place people will turn to learn more about careers, develop new skills, retrain for new positions and sharpen their skills.”
Turning to 4Sight’s financial performance in the year, Zitzke says the three-year business strategy the company established in 2020 continues to deliver strong results, with the group reporting a second straight year of double-digit growth in revenue.
“The continued commitment from the board of directors and the executive committee in the execution of our strategy has sustained top line growth during 2021,” says Zitzke.
In the period under review, 4Sight achieved a 12.9% year-on-year increase in revenue and 3.6% in gross profit.
Basic earnings per share increased from 1 329 cents to 1 695 cents per share.
Zitzke adds that a further improvement was the notable increase in the debt-to-equity ratio to 36.4% and net asset value climbed by 3.5%.
Other key metrics for the year included strong performance of the new 4Sight Business Environment Cluster, which grew revenue by 16% and delivered a R2.6 million profit from a loss of R2.7 million during the corresponding period in 2020.
The Information Technologies Cluster grew revenue by 13%, with the group saying this was despite encountering resource challenges, which resulted in a reduction in profit.
In the period under review, 4Sight’s Operational Technologies Cluster was unable to grow top-line revenue but managed to improve profit by 39%, which the company says represents the strongest pipeline within the group moving forward in 2022.
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