How does text analysis of online job advertisements lend insight to graduate unemployment in South Africa?

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71point4 > Blog archive > 2020 > December > 01 > How does text analysis of online job advertisements lend insight to graduate unemployment in South Africa?

How does text analysis of online job advertisements lend insight to graduate unemployment in South Africa?

Posted by: Abri de Beer
Category: Data analytics, Education, Employment, Youth employment

In this blog, Abri de Beer and James Scott analyse online job ads to understand graduate unemployment.

Young graduates (defined as being under 35 years old and possessing at least a bachelor’s degree) enjoy an unemployment rate significantly below the national unemployment rate. However, the graduate unemployment rate has shown an upward trend in recent years and is increasing at a more rapid rate than the unemployment rate in general. Between 2008 and 2019 the young graduate unemployment rate doubled from 8% to 16%, with a very noticeable uptick in most recent data as shown in figure 1 below.

Figure 1: National and graduate narrow unemployment rates

Over the past five years, the economy has only grown by 3.4%, while the number of young graduates in the workforce expanded by 15% [1]. Going forward it is unlikely that the labour market during a post-COVID-19 recovery will favour young graduates. As austerity measures kick in, the State, which currently employs 33% of young graduates, is likely to hire less. And in the Private sector employers may be less inclined to hire for youthful enthusiasm when, thanks to Covid, there is so much experienced labour on offer.

This trend has not gone unnoticed by graduates themselves as shown by the formation of the Unemployed Graduates Movement (UGM). During an August demonstration in Pretoria, members of the UGM called on parliament to consider the plight of unemployed graduates and accommodate them in labour market policy development [2].

Why is graduate unemployment important?

While the unemployment crisis in South Africa is understandably a priority, unemployment among young graduates is worthy of specific attention. There is a widely referenced skills deficit in South Africa at the same time as an increasing graduate unemployment rate. Clearly, the very significant investment in young South Africans, critical to building the future of the economy, is not yielding returns for graduates or the economy. Given that longer term employment trajectories are shaped at early stages of a career, the inability to find employment is likely to lead to inefficient utilisation in the future [3].

There are also important socio-political dimensions to consider. A recent Economist [4] article cites a prediction in 2010 by scientist Peter Turchin of current populist and radical leanings in Europe and the United States based on his observation of the underemployment of highly skilled university graduates. According to Dr Turchin, political and social cohesion can be stretched dangerously when economic inequality manifests in significant disparities between those who have, and those who deserve and expect more. Resentment simmers when many young people are burdened by student debt and high property prices, and are unable to achieve the living standards of previous generations.

South Africa has already witnessed how effective a relatively small group of articulate, well-organised students can be: after years of #FeesMustFall protests sweeping across institutions of higher education, President Zuma announced the conversion of NSFAS loans into grants for poor and working class students, contrary to the recommendations of his own commission of inquiry [5, 6]. The emergence of the EFF and BLF have added a radical tinge to South African politics; add in growing graduate grievances towards the system that has denied them what they deserve, and we have a dangerous mix.

How can alternative data help to understand graduate unemployment?

Traditional sources of data such as the Quarterly Labour Force Survey can offer insight into the key characteristics of young graduates and why they may be unemployed. However, these data sources often lag far behind the pace of labour market movements.

Alternative data sources such as online job advertisements can provide a more up-to-date picture of the graduate job market. 71point4 used a sample of over 78,000 unique online job advertisements collected from one of South Africa’s leading online job posting platforms between December 2019 and July 2020 to assess key trends in the supply of jobs for qualified, highly skilled workers. The utilisation of online job advert data is a functional complement to the traditional data sources used in labour market analysis and can provide timely and granular information about demand-side details in the labour market.

An analysis of text in the adverts found that ‘experience’ is the most common word used (besides common English words) as indicated in figure 2 below. The word ‘experience’ occurs more than 160,000 times, or on average twice per advert, indicating how important it is to potential employers. Interestingly, words referring to hard skills such as proficiency with Microsoft Office or other computer literacies that one may expect to occur frequently, are not commonly referenced. It seems rather that the focus is on soft skills: ‘management’ is the next most frequently occurring word in the job adverts.

Words that might indicate an advert targeted towards entry-level graduate positions such as ‘academic’, ‘junior’ and ‘graduate’ appear in adverts only infrequently, and the words ‘willingness’, ‘ambitious’ and ‘curious’, which could indicate that a position would offer opportunities for growth, seldom appear.

Figure 2: Words appearing frequently in job adverts

Using word association, it is possible to more clearly infer the context of these frequently used words by identifying which other words appear near them. For example, when examining the words associated with ‘required’, the two most common occurrences are ‘years’ and ‘experience’.

Using a vectorisation technique, analysing some of the descriptors of ‘experience’ reinforces the evidence for a preference for work experience in new hires. The words that most commonly occur in the context of ‘experience’ are ‘years’, ‘essential’, ‘previous’, ‘advantageous’ and ‘similar’.

The word ‘skill’ also provides further evidence of a preference for soft skills in a workplace, by the strength of the associations with ‘environment’, ‘management’, ‘team’, ‘working’ and ‘understanding’. The two words most commonly associated with ‘skills’ are ‘communication’ and ‘interpersonal’, indicating the emphasis employers place on soft skills. Some so-called hard skills such as verbal and writing skills are also mentioned, but to a lesser extent. Likewise, words associated with ‘ability’ also tend to refer to softer skills including ‘interpersonal’, ‘team’, ‘pressure’, and ‘effectively’.

These results should not be interpreted as indicating that tertiary qualifications are irrelevant. While there is a preference from employers to hire graduates, the preference seems overwhelmingly for experienced graduates. This suggests that young unemployed graduates are not held back by a lack of hard skills and qualifications, but by a lack of practical experience which in turn hinders the development of soft skills valued by employers.

The insight provided by the online adverts suggests that employers do not feel that newly-qualified graduates are sufficiently prepared for the workplace. If South Africa hopes to combat rising graduate unemployment it is important for employers and institutions of higher education to work together to more adequately prepare graduates to enter the labour market.

Authors: Abri de Beer, Hanjo Odendaal & James Scott

References

[1] 71point4 and South African Graduate Employers Association (SAGEA). Young graduates: unemployment indicators Q1 report. Available: https://www.71point4.com/young-graduates-unemployment-indicators-q1-report/  (Accessed 1 December 2020).

[2] eNCA. 15 August 2020. No jobs for graduates in struggling economy. Available:  https://www.enca.com/news/no-jobs-graduates-struggling-economy (Accessed 1 December 2020).

[3] Olawajodu, F., Blaauw, D., Greyling, L., & Kleynhans, E.P.J. 2015. Graduate unemployment in South Africa: Perspectives from the banking sector. South African Journal of Human Resource Management. 13(1). Available: https://www.researchgate.net/publication/277187227_Graduate_unemployment_in_South_Africa_Perspectives_from_the_banking_sector (Accessed 1 December 2020).

[4] The Economist. 24 October 2020. Can too many brainy people be a dangerous thing? Available: https://www.economist.com/finance-and-economics/2020/10/24/can-too-many-brainy-people-be-a-dangerous-thing (Accessed 1 December 2020).

[5] BusinessTech. 16 December 2017. Zuma announces free higher education for poor and working class students. Available: https://businesstech.co.za/news/government/216987/zuma-announces-free-higher-education-for-poor-and-working-class-students/ (Accessed 1 December 2020).

[6] Eyewitness News. 2017. 4 key recommendations of the fees commission. Available: https://ewn.co.za/2017/11/13/4-key-recommendations-of-the-fees-commission (Accessed 1 December 2020).

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Author: Abri de Beer

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