Closing the talent gap
Two friends recently applied for jobs in the private sector. One of them had six interviews, the last of which was six hours long. The other also had several interview rounds. The last round was with the executive team of this international investment firm. By contrast, most jobs at South African universities require a CV and a half-hour interview. The same is true for most government jobs.
The difference between the private and public sectors could not be more different. A job at a university is (basically) for life. The cost of the 'wrong' decision is therefore enormous: it is almost impossible to fire an unproductive worker, someone who is a poor teacher or produces no research. Yet universities spend almost nothing on recruitment: as long as someone with the requisite requirements can be found, all is good. The private sector, in comparison, spend large amounts of their money and time on recruiting the best of the best. The reason is simple: competition. If you make weaker hires than your competitors, you might as well close shop. It is survival of the fittest (and not survival of the fit enough) for a reason.
Entrepreneurs know that the most successful firms are those who attract the best. Elon Musk believed this too, which is why he personally interviewed almost all of the first 3000 hires of SpaceX, his space company. Portfolio managers know that best investments are those that not only have a good businessplan but also a team that can implement it. Venture capitalists often invest more in the founder than in their idea.
To spot exceptional talent is thus a multimillion dollar industry. And the reason why there are so many theories about what makes a great worker. One trait that most would associate with high-performing workers is intelligence. But, of course, not all jobs can be filled by those at the top of the IQ distribution. So a sensible question might be: in which industries should a country's smartest people end up? Some might argue that you want the smartest people in politics, because that is where policy is set and where tax money is spent. Others might argue that you want the smartest people to end up at universities, because it is often there that new technological breakthroughs are made. Or you might argue that the smartest ought to end up in business, because it is there that value is ultimately created for society.
Where the smartest people end up is usually, though, a question of incentives. I remind myself often of the Chicago economist Raul Sanchez de la Sierra's research on rebel groups in the Democratic Republic of the Congo. His finding: that the smartest men in the Congo often end up as leaders of rebel groups. He made a remark in a presentation a few years ago that these men would not be out of place in a Harvard Business School classroom. Answering which incentives pull the smartest in the DRC to rebel groups and the smartest in the US to the HBS may help us get at the root of the differences between rich and poor countries.
Where do the smartest South Africans end up? Our school system perform so poorly that many of the smartest never get the chance to make their mark. Just as in the DRC, they probably end up in settings where the yield on intelligence is high but dangerous, like politics or crime. Those that do end up going to a good school aim for university. But few succeed: of the 100 Grade 1 students that started school this year only 5 will likely end up at university, if things stay the same.
The lucky few that do end up going to varsity must decide what to study. The financial sector is attractive to many, but many have wondered whether finance adds that much value? In South Africa some of the smartest high-school graduates end up studying accounting and spending years auditing company statements. Is this the best use of their talent? The recent outcry over admission requirements for medical students is another case in point. Sure, a medical specialist must be smart, but do we really need the cream of the high-school graduate crop to become a general practitioner? Are there not other traits, like perseverance and empathy, that make for better doctors?
The economist Tyler Cowen and entrepreneur Daniel Gross wrote in their recent book – Talent: How to Identify Energizers, Creatives and Winners – about the undervalued traits of talented individuals. The good news for those of us not in the top 1% IQ distribution is that Cowen and Gross believes that talent scouts often overestimate the importance of intelligence. It's not that it is unimportant, but there are potentially many other traits that are equally or almost equally important. Perhaps we weight intelligence too much because it is pretty easy to measure.
So what are these other traits? Cowen and Gross consider sturdiness, the quality of getting work done every day, one undervalued trait. One small but accurate way to identify such a trait is to see how quickly someone responds to an important email.
They also emphasise the importance of continued learning. One of their favourite questions in interviews is: 'What do you do that is similar to what a pianist does when they practice scales?' Someone who is unsure of what to answer is usually not a great appointment in a job that requires constant learning.
The more important question is of course what a country like South Africa does to develop its talent. The logical answer would be to improve the education system, but that seems a mountain too big to climb at the moment. There are other options though. The most sensible is to allow talented people into jobs where they are required: there are many engineers, doctors and teachers that can add much value but because of unions and legislation are not allowed to do so. That should be an easy fix. Then there are many foreigners who are eager to market their talent in South Africa. Make it easy for them to do so. Thirdly, access to a global labour market (and the work-from-home phenomenon) will give talented South Africans more opportunity to work abroad but reside in South Africa. But then they need access to cheap and reliable energy, internet and a safe environment.
The most successful firms, universities and countries of the future will be those that find talent where others could not – or were unwilling to try. South Africa face great challenges, but there are also great opportunities to close the gap between those with talent and those willing to put that talent to good use.
* An edited version of this post appeared (in Afrikaans) in Rapport on 12 June 2022.