FERDINAND STEENKAMP: Without data, businesses face disaster

SA’s quarterly labour force statistics for April-June 2024 paint a troubling picture of the nation’s employment landscape, highlighting a rather unsettling trend of rising unemployment.

With a 0.6% increase in unemployment from the previous quarter and a 0.9% rise compared to the same period in 2023, the figures reveal that 158,000 more South Africans found themselves jobless between April and June, bringing the total number of unemployed individuals to a staggering 8.3-million. 

While this decline can be partially attributed to broader governance and political challenges, it’s important to recognise that the private sector is also not immune to its own weaknesses. 

Despite the resilience of our economy and an educated workforce (with talent that surpasses international standards), the private sector still faces critical issues that will continue to threaten its competitive edge on the global stage. Chief among these is the slow adoption of data-driven strategies in the retail sector — an issue that is compounded by the alarming exodus of home-grown data and software developers to international markets. 

A study by OfferZen, an SA job marketplace for developers, sheds light on these pressing issues. It delves into the latest trends in the tech industry and highlights the concerns that are close to the hearts of developers in our country today. These insights are not just a wake-up call for the private sector but should be heeded as an urgent call to action for businesses that are yet to embrace data and technology to increase profit and decrease needless expenditure.

This will remain a critical undertaking for two reasons: to prevent further talent loss, and to help retailers safeguard their position in a competitive global economy. 

Among the findings in the State of the Software Developer Nation report for 2024, over 50% of respondents indicated that they still preferred a fully remote working arrangement, while only 3% desired full-time work at the office. Among those who have a fully remote working policy, almost 50% said they had the freedom to work from anywhere in the world, while 26% of them said they had the freedom to work from anywhere in the country.

However, the data still indicates that companies are gradually increasing enforcement of their return to office policies since the end of the lockdown, causing employees to lose the benefits of remote working arrangements, which are not just limited to freedom of residence, but also include cost-saving from not commuting to and from work.

Out of the respondents who confirmed they are working under a remote policy, 64% of them declared that they would leave their job if their employer enforced a return to the office. When surveyed on the reasons developers left previous jobs, seeking a better salary, poor management, and lack of career and growth opportunities topped the list. This was supplemented by only 33% of developers feeling confident that they could develop their career at their present employer.

Amid the backdrop of high unemployment and work arrangement policies, we are also losing vital talent to weakening salaries. Entry-level and junior developers have seen their salaries decrease in 2023 when factoring in inflation. Annual salary increases have also slowed down over the past 12 months.

But this is only one side of a double-edged sword for companies in SA. 

The uptick in companies embracing better data collection strategies and management practices has been underwhelming, leading to anxiety about how companies will continue to thrive in a world that is moving deeper and deeper into the intelligence age. 

In example after example, we see how companies that embrace investment and management of data infrastructure experience rapid scalability in their operations and bottom line.

Data empowers business leaders to measure trends, identify opportunities, and implement profit-augmenting interventions while reducing unnecessary costs. This is particularly relevant in retail, where data can offer improved operational visibility in a manner that supports significant cost savings across the entire value and supply chain.

In fact, if a goods or service-based business has no internal data warehousing or analytics of their own, they would be likely to see their operations collapse when up against competitors who started reading the technological tea leaves yesterday. 

Shoprite is one of several big names that analysed this looming horizon many years ago. Over time, it began to build up its data systems and it now commands one of the largest databases of customer information in the country. In March, Market research firm BrandMapp and consultancy Truth published their 2023/2024 Loyalty Whitepaper, which found that the Checkers Xtra Savings loyalty programme was the most used loyalty programme among retail shoppers.

This is no surprise, considering Shoprite has gone so far as to establish its own in-house retail-focused data consultancy firm, ShopriteX, which is constantly pursuing strategies to save customers time and money through innovation and making shopping experiences more personalised. This is backed by an announcement by the retail giant earlier this year that it is leveraging artificial intelligence to price goods based on demand and timing — enabling Shoprite to increase its profit margin and offer customers more bang for their buck.

If any business wishes to survive the intelligence age, integrating data collection and management at every step of the value chain will be critical.

However, if we cannot retain an immensely talented pool of home-grown developers, SA businesses will soon lose access to these skilled employees. We simply cannot run the risk of having no-one left to build goliath cloud data warehouses for SA, by South Africans. If we do, our retail sector will lose its competitive edge not just locally, but internationally as well.   

SA remains an exceptional country, and the GNU provides all of us with the perfect and necessary opportunity to rebuild, identify the problems and formulate the solutions.

Just like Shoprite makes disciplined data-driven decisions in its operations, the SA business community needs to look at the data contained in reports like the State of the Software Developer Nation and pursue measures that will retain local developers.

A collective pursuit to invest in the digitalisation of businesses in our country will mark a step forward in building exciting opportunities for software and data engineers in SA, while driving value, improved efficiencies and profitability for retail players as well.

• Steenkamp is co-founder of Tregter.