The latest Quarterly Employment Statistics (QES) report for first quarter (Q1:2025) landed not as a routine economic release, but as a sharp and painful reminder of SA's struggle with job creation.

A net loss of 74,000 jobs in just three months, followed by a year-on-year decline of 95,000 jobs, is a reflection of structural weakness, a faltering national strategy, and a crisis of opportunity for millions of South Africans. This is more than job losses. It is families losing security, communities losing hope, and a country gradually losing its capacity to harness its demographic potential.

The decline cuts across key economic sectors: trade shed 52,000 jobs, community services lost 17,000, and even mining, once the cornerstone of our industrial growth, retrenched another 4,000 workers.

The reality is that SA is grappling with a deep structural misalignment between the skills our workforce possesses and the demands of an evolving economy. Our education and training institutions are producing graduates for jobs that no longer exist while high-potential sectors such as digital technology, green energy, and advanced manufacturing continue to face shortages in qualified labour.

SA's youth unemployment rate, as measured in Q1:2025, remains stubbornly above 40% and among the highest in the world. We cannot claim to be building a future-ready economy if the very generation that is meant to inherit it remains jobless and disengaged.

SA’s post-apartheid employment architecture was built on a foundation of equity, growth and transformation, but those ambitions have been repeatedly undermined by poor implementation, policy fragmentation, and weak institutional coordination.

For instance, Sector Education and Training Authorities (SETAs), while well-intentioned, have largely failed to anticipate future labour market shifts. Their training output remains focused on static industries, instead of rapidly emerging sectors like artificial intelligence, fintech, data science, and green energy.

What is needed is a comprehensive recalibration of the skills pipeline. SA must adopt an anticipatory skills development model, one that uses big data, AI-driven labour market forecasting, and direct employer engagement to forecast demand five to 10 years ahead. It is time to stop producing for yesterday’s economy. We need to embed practical training, work-integrated learning, and entrepreneurship development in every qualification.

Every learner and/or student in a public or private institution must spend a significant portion of their education in real-world environments – from construction sites to software development hubs.

Moreover, we must address the informal economy not as a nuisance but as a frontier of opportunity. With more than 2.9-million South Africans employed informally, this sector contributes about 6.4% to the GDP. Yet policy continues to overlook it.

The state should formalise informal trade through micro-licensing, digitised payment platforms, and microcredit funding models. If every township entrepreneur was given access to structured business development support and simplified compliance, the ripple effect on employment would be exponential.

The private sector, too, must step up. We need binding employment compacts that measure the impact of business beyond profits, and look at how many jobs have been created, what investment has been made in training, how inclusive is their workforce, and how deep are their local supplier linkages. Government should consider linking tax incentives to verified job creation and youth absorption.

Equally, the public sector must not be exempt from scrutiny. Despite being one of the largest employers in the economy, government departments and state-owned entities have outsourced far too much of their functions, failed to fill funded vacancies, and neglected skills development. Public procurement, which is responsible for over R1-trillion in annual spending, should be leveraged for employment impact. Contracts should come with social conditions. Employment should be the primary metric of success across government departments, not just economic growth, not just fiscal stability, but how many lives we’ve improved by putting people to work in dignified, sustainable ways.

Dr Malapane is a researcher and independent economic analyst.