Cracking Africa’s Talent Challenge: Why Executive Development is Key

For businesses in every sector, Africa offers exciting prospects. Aggregate annual growth exceeds 6%, amongst the highest of any region, with the continent’s collective GDP forecast at $2.6 trillion by 2020. Africa is blessed with abundant natural resources and is seeing tremendous investment in oil and gas, mining and agriculture. Opportunities in consumer-facing industries are just as promising: Africa’s consumers are expected to buy $1.4 trillion worth of goods and services in 2020. Telecoms companies alone have added over 300 million subscribers since 2000.

But Africa’s rapid growth, combined with historic underinvestment in human capital, is creating a serious shortage of talent – which could hold the continent back from achieving its full potential, and frustrate the expansion plans of many African and international businesses. In the latest United Nations Human Development Index, 38 out of 46 of the world’s lowest-ranking countries are in Africa. This makes investment in education and training absolutely critical.

Fierce competition

Nowhere is this challenge more pressing than in the top ranks of business, where fast-growing companies are competing fiercely for a limited pool of senior management and technical talent. Neither the graduates from local universities nor the steady stream of returning African professionals and expats are sufficient to meet demand. In some of Africa’s most resource-rich countries, such as Angola, it is common for executives to last only months in a role before moving on to another company – at a multiple of their previous salary.

A recent Egon Zehnder event on “Hiring and Managing Talent in Africa”, held in Maputo, capital of Mozambique, shone a spotlight on the challenge. The country’s growth rate is amongst Africa’s highest, underpinned by major foreign direct investment – indeed, on the day of our event, the Chinese oil company CNPC invested $4.2bn in a natural gas field off the coast of Mozambique, one of the largest Chinese investments in Africa to date.

But Mozambique’s human development levels are amongst the lowest in the continent, in part due to a 16-year civil war that ended in 1992. Executives from some 50 companies attended the Egon Zehnder event, and many of them cited the shortage of managerial and technical talent as their number one issue. As in Angola, economic growth and the development of natural resources are driving a “war for talent” that is fast pushing up compensation levels.

Training local talent

What are companies to do? As several successful firms are showing, the answer lies in investing in the development of your own management talent. For example, a leading beverage company in Mozambique has become known for its extensive executive education programme, as well as its culture of mentoring and coaching. It is widely seen as a “corporate MBA”, a training ground for local talent. Other companies, in industries as diverse as mining and banking, are building similar programmes.

Although the education programmes make these companies’ executives more marketable, they usually have the effect of slowing the turnover rate – showing that talented managers are typically motivated as much by personal growth as by compensation. These programmes are also a visible commitment by companies to contribute to African society’s longer-term development; they are usually complemented by investments in schooling systems and universities, and support for talented students. African managers and professionals, who generally feel a strong personal mission to contribute to nation-building and the continent’s regeneration, are more likely to be attracted to companies that make such commitments.

In countries like Mozambique, where burgeoning economic growth comes alongside a shortage of trained talent, HR Directors have their work cut out for them. Those that succeed will deploy a range of tactics, including attracting African professionals working elsewhere in the world to return home, and negotiating restrictive immigration laws to bring in expat talent. But no effort will be more important than assessing and selecting the people with the highest potential and building high-impact programmes for executive education – underpinned by a culture of mentoring, on-the-job learning, and wide-scale people development.

We would like to thank Alexander Wrey for his contributions to this article.

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