Mercer's 2026 talent report: South African workers face AI skills gap dilemma
The South African findings of Mercer's Global Talent Trends (GTT) 2026 report were released on Tuesday, 14 April, revealing the country's workforce is at a critical juncture.
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The study, which surveyed 500 employees and 50 C-suite executives in South Africa, found that AI is viewed as the primary driver of productivity, while a widening skills gap threatens long-term growth.
“The data shows that South Africa is navigating a complex talent paradox,” says Keletjo Chiloane, career consulting leader, Mercer Africa. “While 68% of local executives expect a high return on investment from AI-driven work redesign this year, the success of these initiatives rests entirely on the human element.
"To unlock exponential growth, businesses must move beyond seeing AI as a tool for mere automation and instead use it as a catalyst for a more sustainable, human-machine teaming model.”
Talent scarcity (52%) and digital acceleration (50%) have emerged as the top two social forces influencing people plans for executives in the region. As organisations rush to integrate AI into their ways of work, the human element is feeling the strain; only 41% of South African employees report they are "thriving" in their current roles, trailing the global average that sits at 44%.
The reskilling mandate
The report identifies a massive shift in workforce requirements. 78% of South African employees trust their organisation to teach them the skills needed if their jobs change due to AI, while 53% worry that their current skills will not remain relevant. This awareness is so acute that 65% of local employees would hypothetically trade a 10% pay increase for opportunities to upskill in AI and digital competencies.
Local executives are aligned on the importance of this transition, with 62% identifying the move toward skills-powered talent practices as the most critical area for leadership focus.
“We are seeing a profound shift in the employee-employer compact,” says Mpho Maponya, market leader, Mercer South Africa. “South African talent is incredibly proactive; they are willing to make financial trade-offs for career longevity. For leaders, the challenge is no longer just identifying the status quo but executing a skills-based strategy that addresses the ‘fear of becoming obsolete’ while building a culture of continuous learning”.
The productivity and trust gap
While 83% of South African employees report being more productive when using AI tools, a "trust gap" is emerging regarding how these tools are deployed. 74% of employees expressed concern about AI being used for workplace surveillance.
Furthermore, while 88% of South African executives believe their organisation places the right amount of trust in employees, only 68% of employees feel that people trust one another within their organisation.
Compensation and retention
The report underscores that the "cost of living" remains a primary driver of South African talent movement. Among those planning to leave their current organisation, 50% cite receiving higher pay elsewhere as the leading reason, followed by lack of flexible working options (41%). Interestingly, while financial incentives remain vital, South African employees highly value non-monetary benefits, with 64% are willing to trade a portion of their salary for higher-quality medical care.
A new blueprint for South African leadership
The GTT 2026 report calls for a new leadership model. South African employees identified communication skills (71%) and empathy (67%) as the most important traits for great leaders - qualities that will be essential as organisations navigate the emotional and psychological impacts of rapid digital transformation.
Chiloane concludes: “To compete globally, South African businesses must close the digital agility gap while ensuring that empathy and economics remain in balance. Success in 2026 requires leaders who can manage these paradoxes - focusing on performance and technology without losing sight of the workforce’s well-being and trust”.