Momentum Metropolitan Holdings (MMH), one of SA’s largest financial services conglomerates, has flagged a lack of critical skills in the industry, partly due to emigration, as one of the risks facing the group and one that has necessitated a "war for talent" in the sector.
The R28bn company said in its latest annual report it is engaged in a war for talent, particularly attracting and retaining actuaries, IT and technical skills.
"SA is facing an acute critical skills crisis, especially African, coloured and Indian skills, due to increased local and international competition and emigration," the company said.
"We face the risk of skills shortages, particularly in critical skills such as actuarial, IT and technical talent. This has amplified in the evolving working environment. Talent retention, burnout and fatigue are all concerns, especially in specialist areas, and talent attraction remains challenging."
The company said it has found it difficult to get more people into the system, which puts it at risk of not achieving transformation targets.
"We are committed to creating a diverse, inclusive, transformed and equitable workplace. As a result of the war for talent, we face the risk of not attracting, developing and retaining black SA candidates at all levels. We further risk not achieving a satisfactory pace for targeted change at the senior management level."
The Enterprise Observatory of SA in 2019 highlighted the acceleration of skilled emigration, with about 400,000 professionals having left SA since 2005.
Business Day reported in September that the national payment system, the backbone of the country’s financial system, is grappling with a skills shortage dilemma, worsened by the emigration of skilled personnel, according to the Payment Association of SA.
According to the 2022 Global Talent Competitiveness index, SA had an overall ranking of 77 in the world out of the 133 countries surveyed. The country was ranked 55 when it comes to attracting skills but a lowly 88 in terms of retaining talent.
MMH flagged the uncertain macroeconomic environment as the number one risk facing the business. The macroeconomic growth outlook is dampened by uncertainty over the leadership of the country, energy constraints, pressures on food inflation and the impact on the currency of the rise in global financial stability risks.
It said these factors, combined with high interest rates, are likely to place pressure on new business volumes and new business margins.
"While our earnings outlook has improved, recent pressure on sales volumes is a concern. Disposable income remains under pressure due to rising interest rates and high inflation, as well as the lack of economic growth," CFO Risto Ketola said.
"This is likely to put ongoing affordability pressure on new business volumes, particularly on long-term savings and on protection business. Investment business is negatively affected by other factors, such as low confidence in SA asset classes and by consumer preference to maintain their assets in liquid, low-risk investments."
The company expects the two-pot retirement system to be implemented in March 2024 as planned by the government, despite concerns that have been raised around timing.
"In preparation for the pending change in legislation, a business working group has been established to ensure business readiness for compliance.
"We expect these proposed regulatory changes will lead to a substantial administrative burden and require systems development. We are monitoring these closely to ensure we fully understand the intent of the regulator. We also have concerns around our members’ understanding of these changes and will play our role in ensuring that member education continues to be enhanced."
Business Day reported two weeks ago that the retirement industry and trade unions are at loggerheads over the proposed implementation date for the new two-pot retirement system and the maximum amount that workers can withdraw when the system comes into effect.
The industry wants the two-pot system to be delayed by 12 to 18 months after promulgation of the law so that it has time to prepare. Cosatu is adamant the implementation date should remain March 1 2024.
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