South Africa’s unemployment rate reached 32.9% in Q1 2025, marking one of the highest globally. The situation is deteriorating, having risen from 31.9% in the previous quarter. Although university graduates face a significantly lower rate of unemployment—11.7%—this figure has sharply increased from 8.7% in 2024, highlighting a growing gap between qualifications and job opportunities.
Misalignment Between Education and Labour Market Needs
Nkosinathi Mahlangu, Head of Youth Employment at Momentum Group, believes the growing disconnect between the education system and the economy is a key issue being neglected.
“There must be synergy between academic institutions and the sectors driving economic growth. This ensures young people are acquiring the right skills,” Mahlangu said in a conversation with IOL. He emphasized the importance of continuously identifying and monitoring critical and scarce skills.
Dr. Linda Meyer, Managing Director at IIE Rosebank College, agrees that urgent reforms are needed to bridge the divide between tertiary education and real-world employability.
Barriers Graduates Face in the Job Market
Meyer identifies six major obstacles affecting graduate employment. Chief among them is South Africa’s sluggish economic growth, which limits job creation. She suggests that relying on economic growth alone is not enough—students must also be equipped to create their own opportunities.
“An annual growth rate of 3% would be necessary to absorb new graduates effectively, but we can’t afford to wait. Graduates need the skills to generate their own paths,” Meyer said.
Modernizing Curricula for a Changing World
A critical issue is the outdated nature of many university programmes.
“It’s shocking that many degree structures haven’t evolved much since our parents’ time,” Meyer remarked.
She called for curricula to be aligned with fast-growing sectors like artificial intelligence, information technology, and cybersecurity. Moreover, digital literacy, soft skills, and entrepreneurial thinking should be integrated into education to prepare students for both employment and business ownership.
Hands-On Learning is Essential
According to Meyer, integrating real-world experience into academic programmes is crucial.
“Internships and simulated work environments are transformational. Just one year of practical experience can greatly improve a graduate’s job prospects,” she noted.
To address this, institutions should actively seek industry partnerships for internship programmes, build on-campus labs, and develop environments that replicate actual workplaces. Meyer also urged the government to incentivize universities—just as it does with vocational institutions—to support experiential learning.
“The lack of tax incentives at the university level limits collaboration. Sectors like mining, healthcare, and ICT should work closely with universities to ensure graduates are job-ready,” she added.
Entrepreneurship and Micro-Credentials Set Graduates Apart
Meyer advocates for initiatives that support student entrepreneurship, such as mentorship programmes and seed funding. Micro-credentials—short, targeted certifications—also offer a way for graduates to stand out in a crowded job market.
“Employers often sift through hundreds of CVs. Micro-credentials signal initiative and specific skills. When paired with an entrepreneurial mindset, they can turn graduates into problem-solvers and business creators,” she explained.
SMMEs: An Untapped Engine of Opportunity
Meyer believes small, medium, and micro enterprises (SMMEs) hold massive potential for absorbing young talent.
“We focus so much on major corporations, yet SMMEs can be real game-changers. The main issue is access to funding,” she said.
Most young entrepreneurs lack the collateral needed for traditional loans, and many face bureaucratic hurdles when applying for government micro-loans. Meyer argues that streamlining these processes could empower many more graduates to kickstart their businesses.
“Sometimes, success just needs a small capital injection—enough to get started and bring an idea to life,” she concluded.
