South Africa is the second largest economy on the African continent. As a steadily growing consumer market, it offers plenty of possibilities for Swedish companies to establish local activities.
With its 60 million inhabitants and continuously increasing consumer market, South Africa is a regional hotspot for growth in the south of the continent.
Sweden exports many different products to South Africa, including vehicles, electric and ICT equipment and heavy machinery for mining, but also high volumes of pharmaceuticals and processed food. Thanks to the SADC Economic Partnership Agreement, South Africa has beneficial trade conditions with EU countries. The lower labour costs are also beneficial for growing business in South Africa.
South Africa exports mostly: mineral products (25.1 percent of total exports, including chrome, manganese, vanadium, vermiculite, ilmenite, palladium, rutile and zirconium, crude and coal), precious metals (16.7 %, mainly gold, platinum, diamonds and jewellery), vehicles and aircraft vessels (11.9 %), iron and steel products (11.9 %), machinery (8.1 %), chemicals (6.1 %) and vegetables (5.4 %). Main export partners are: China (9.7 % of total exports), the United States (7.5 %), Germany (7.1 %), India (4.7 %), Japan (4.7 %) and Botswana (4.3 %). Others include Namibia, the UK, Mozambique and Netherlands.
In 2019, the country was the world’s largest producer of platinum the world’s largest producer of chromium the world’s largest producer of manganese the 2nd largest world producer of titanium the world’s 11th largest producer of gold the 3rd worldwide producer of vanadium the 6th largest world producer of iron ore the 11th largest world producer of cobalt and the 15th largest world producer of phosphate. It was also the world’s 12th largest producer of uranium in 2018.
AIMS International South Africa
AIMS International South Africa operates in Cape Town and Johannesburg, often also with assignments in neighboring countries.
AIMS International Sweden and AIMS International South Africa has a history of solving assignments together and apart from more traditional Executive Search assignments we have also collaborated on attracting highly skilled engineers from South Africa to relocate to other parts of the world where there has been a shortage of talent within special niche markets and special expertise.
- 4% of Swedish exports go to Middle East & Africa
- 6% Middle East & Africa represent 6% of global economy
- 7% of global exports originate in Middle East & Africa
Recently I talked to Leonie Pentz about the market in South Africa, its development, the importance of sustainability and how Leonie with her team incorporates sustainability in their way of working as Executive Search-consultants.
Leonie has 20+ years as a recruitment professional in the Sub Sahara African market and since January 2011 as AIMS International’s Managing Partner based in South Africa. She represented the MEA region on the AIMS International Executive Board from 2016 to 2022 and currently holds the international position of VP Sustainability. She is fluent in Afrikaans and English.
What is South Africa’s economy like?
We are a country rich in raw materials. Recently, metal prices have risen after the pandemic and rose extra in connection with the disruptions in supplies from Russia due to the war. To then recoil, but raw material prices are clearly higher than before the pandemic. Our economy is slower at the moment, we are still feeling the after effects of the pandemic and, although there was a slight upswing beginning of this year, only about 500 000 jobs were added in the last quarter amongst the highest ever unemployment figures (around 37%), so not great news. We are also impacted by the effect of the Russia /Ukraine war, for example fruit exports (20% of all SA export pears used to go to Russia) and many other business areas are under strain. As we are far from most of our traditional trade partner markets, global logistic challenges can affect us greatly. I am hoping the African Trade Agreement will promote more inter-Africa trade opportunities, which might spread the risk somewhat.
As always though, opportunities arise out of chaos and disruption and we do see certain niche industries moving forward and specifically privately owned companies who can quickly adapt to opportunities and movements in the markets, are growing.
How would you describe the Executive Search market in South Africa?
Our market is a hybrid of new and old world. We have a small sophisticated market on the one hand with clients who understand the value the executive search process and partnership brings. At the same time, we have a large general success-based recruitment market who also like to call themselves ‘headhunters’. Due to many corporates bringing in a tender system for recruitment services, they forget to look at years of experience and professionalism of the individuals in the service company. A price war ends in a cheap service. In our industry, human capital is key. Service excellence can only come with open communication, active partnership and a market related price. Our service is inexpensive, but it certainly is not cheap.
How specifically do you handle international assignments?
Over the years, we have worked for many international clients, both looking for staff in South Africa for SA operations or our clients needing staff in a different international location. With the SA team’s excellent relationships and close collaboration forged over many years with our AIMS Offices in more than 50 countries, this is just another Tuesday for us. We have especially close ties with Partners in the MEA region and, interestingly enough have done numerous assignments in collaboration with our Finnish and Swedish Partners. We have a similar work ethic and I love that we share a passion for ESG.
What is the most important advice for a foreign company who wish to invest, establish or increase their presence in South Africa?
As mentioned earlier, there are great opportunities in Southern Africa and the African continent. You will need a long-term view, though. If you are prepared to learn and ‘accept’ the local culture and hand pick your staff and support the achievers, you can succeed. We have a young, vibrant work force. If nurtured and supported, this can be your organisations’ biggest strength. People think that South African salaries are low, however it is important to understand that while minimum wages for entry level and blue-collar workers are super low, the difference between professionals’ salaries and the entry level is huge. Engineers in SA do not earn any less than in Sweden, for example. I would advise any investor to ensure they have top quality service providers who can support and advise them on local staffing, benefits, labour law and cultural issues.
I believe you have a generalist approach to working with Executive Search. Any areas where you prefer to work in and what type of assignments do you do?
In short, we like to work with clients who like to work with us. We are our client’s thinking partners when it comes to staffing. We do not ‘just do a job’. We truly become ambassadors for our clients. We fall in love with our client companies. We also particularly enjoy working with international clients who are either expanding or starting up in our region. These clients see the benefit of our value-added service approach. We do a lot of work in the general industrial and also service environments. The best fit for us in the South African context is therefore large or medium sized independently / family-owned organisations where we have access to key decision makers who demand value for money. This way we can make a difference and, no matter how difficult or complex the assignment, we find the right solution for our clients.
You were part of the marketing team in AIMS International for a rather long time and you got a good understanding on marketing and communication internationally. What trends do you see in South Africa and internationally when it comes to marketing of our services?
It is no secret that today’s clients and candidates are better informed than ever before. With a serious leadership crisis and war for talent globally, it is important that a prospective employers’ value proposition is well thought through and in line with their ideal candidates’ personal motivations. Aspects such as mental health, hybrid work opportunities, flexible remuneration and benefits and equality issues are speaking louder than skills vs pay. From professional to executive level, employees have similar needs worldwide, nuanced with their cultural context. A Headhunter needs to be unbiased and inclusive, yet understand the client’s cultural environment and which behaviours will drive the set of values that fits this particular culture. And know where and how to attract and find the talent who will fit this environment.
I know sustainability is something of great importance for you. What trends within sustainability are rising in your region?
Our country’s rich natural resources are its biggest strength and our biggest threat at the same time. We are again slow off the starting blocks here. In a country with the highest wealth disparity in the world, it is tough to keep focus on these topics when 10% of the population goes hungry daily. And this while there are no actual food shortages in South Africa! Money talks and unfortunately short-term money talks the loudest in our political climate. Terrible environmental decisions are being made and ‘allowed’ by institutions who should have our best interests and our country’s longevity at heart. We will no doubt see the devastating impact of these actions in the medium and certainly in the long term, especially related to mining and with the rehabilitation of mining not being enforced by the Government.
How does sustainability affect how you handle Executve Search?
There is an immense drive amongst the younger workforce towards an unbiased and inclusive management style. This is possibly the biggest leadership shift that needs to happen, impacting the success of a company’s workforce. We therefore endeavour to identify and place leaders with a sustainability mindset, building it into our own and our client’s DNA. The answer to successful recruitment and retention strategies, building future human value, and therefore total value in your organization, is sustainability. Recruitment (if done correctly) is a key sustainability driver.
Thank you Leonie, always a pleasure talking to you!