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By Daniel Orelowitz, Managing Director at Training Force

 

Despite being Africa’s most industrialised nation, South Africa has one of the highest unemployment rates in the world and is currently struggling with low GDP growth in the thick of global market uncertainty. Economic recovery and growth are desperately needed, but this requires job creation and skills development to meet our country’s current and future needs. One of the most effective ways to achieve skills development and job creation is through learnerships. An integrated skills development intervention, learnerships are aimed at promoting growth in employment and facilitating capacity building across sectors to address scarce and critical skills shortages. Learnerships are attractive for businesses since a Broad-Based Black Economic Empowerment (B-BBEE) score and tax benefits are available, however, managing these programmes can be a massive undertaking. Here, it is advisable for companies to partner with an accredited training provider to sidestep the system while gaining all the B-BBEE and tax benefits with none of the associated administrative and compliance burdens.

 

In short, outsourcing their learnership programmes is the business hack every company needs to embrace in 2023.

 

What is the big deal about learnerships?

 

Currently managed by the Sector Education and Training Authorities (SETAs), learnerships are directly related to particular occupations and roles. They provide a pathway that leads individuals through to accredited National Qualifications Framework (NQF) qualifications. Learnerships ensure that more people are trained for a specific working environment, and businesses benefit from having a more skilled and experienced workforce. Through such skills development programmes, learners are now able to further their education while employees contribute to the establishment of a pool of skilled labour that can either be absorbed permanently into their organisations or redirected to be of benefit elsewhere in the industry.

 

In a format that combines structured learning with hands-on work experience, learnerships are key to ensuring that individuals are equipped with the theoretical knowledge necessary to work in their field and the practical know-how necessary to secure a job in that field. As attractive as the business benefits of learnerships may be, companies generally have to source eligible candidates and have them vetted and onboarded, all of which direct time and resources from other core functions of the organisation.

 

Developing essential skills

 

An experienced training provider can step in here, and take on the recruitment, enrolment, and management of the right candidates for the company’s learnerships. As training and employee development specialists, it is their core business to help their clients align with the requirements of learnership programmes, such as the Youth Employment Service (YES) programme. This learnership programme provides the company with exceptional B-BBEE benefits, while greatly assisting to close the skills gap in the youth market. An enterprise can participate in facilitating 12-month work experience programmes for unemployed youth by either:

 

1. Sponsoring and hosting youth within their business
2. Sponsoring placements elsewhere within an existing SME/supply chain
3. Providing hosting to the benefit of a new SME.

 

How do learnerships benefit employers?

 

From B-BBEE scores to tax incentives, there are several noticeable benefits when implementing learnerships in the business:

 

• Contributing to skills development, job creation and economic growth, while boosting the company’s productivity and adding to its value through the employment of skilled, knowledgeable, competent employees.
• Establishing a pool of properly-trained, experienced employees with critical skills to draw from gives the business a clear competitive edge in the industry.
• Being committed to skills development positively impacts the company’s B-BBEE status, improving employment equity targets by enabling previously disadvantaged employees or unemployed individuals to upskill themselves and earn qualifications.
• There are Learnership Tax Incentives that allow employers to claim up to R120 000 per individual that completes their qualification, along with monthly Employment Tax Incentives (ETI) for every employee hired between the ages of 18 and 29.

An all-round win-win

Between recruiting candidates, handling all aspects of their HR onboarding, and payroll, and overseeing their learnership progress and assessments, there can be a lot for businesses to come to grips with. Partnering with a training provider that specialises in youth development is the smartest business hack that ensures everyone benefits –  the company gains the full tax and employment equity advantages of learnerships, while candidates achieve their full potential through the successful completion of such programmes.

By Daniel Orelowitz, Managing Director at Training Force

Workforce training, while essential for upskilling, can cause operational downtime which affects the company’s bottom line. However, this is easily countered with the introduction of on-demand online training. This gives workers the flexibility to attend their training sessions without impacting their work schedules. Such training can significantly reduce the operational downtime that stems from face-to-face training sessions, which are usually scheduled during working hours. Online training makes it possible to accommodate both the operational demands of specific projects and the need to facilitate skills development.

 

Conflicting concerns

 

With conventional training programmes, the number one concern for businesses is operational downtime. While the need to upskill employees is undeniable, the need to avoid operational downtime is simply more pressing. This results in training programmes being constantly postponed, or delayed, in the hopes that training can happen during a quieter period, when the timing is better. Realistically, the timing is never going to be ideal, so businesses need to figure out how to fit training into operations and how to work operations around training. Here, online training is the solution.

 

Weighing costs and benefits

 

With conventional face-to-face training, employees usually have to apply for study leave in advance. Extra hands become necessary, whether this means another employee stepping in to cover that individual’s shifts or bringing in casual labour. There are plans that need to be made and costs that need to be considered in addition to expenses incurred with paying for the training course itself. While few businesses can afford the negative impact of downtime or the cost of extra hands, the positive impact of investing in employees through training and upskilling initiatives cannot be overlooked. With training, employees become better at their jobs – more capable, and more productive. They’re either able to do their job quicker, or they’re able to take on more work, which makes the training worthwhile.

 

How can online training make a difference?

 

The effect of operational downtime can be minimised by making online training available to employees. Lessons and course material are available on-demand to trainees, which means they can access and consume at their convenience. They can either come in to work a little earlier or complete the training during their lunch breaks, during quiet periods in the day or after hours, as their schedule permits. If they need to use company resources to do so, this is possible. Not only does online training facilitate convenience, but it also allows trainees to learn at their own pace. Something not necessarily possible with conventional in-classroom training. Learners can consume the material at their own pace and if anything is unclear, they can revisit or replay the audio or video or reach out to a training facilitator for assistance. This means that the individual can ensure that they fully understand the required material before moving onto the assessment.

 

From an operational scheduling perspective, if there needs to be face-to-face training, companies and employees will need to reach a compromise. The company can give workers a Friday off for training, and in return, workers can give a Saturday for the same purpose. Expecting employees to attend Saturday-only training is impractical. There needs to be a level of sacrifice on each side in order for everyone to reap the benefits of training.

 

Commitment is key

 

In addition to a level of sacrifice being necessary on both sides, employers and employees alike need to be committed to the training to see it through. It’s important to bear the benefits in mind, and to remember that the end will justify the means. In addition to productivity improvements that come with enhanced skills, employees that participate meaningfully in training opportunities will have a sense of accomplishment that comes with having achieved a new qualification or acquired a new skill set. This contributes to employee retention, which is a positive outcome for employers that is realised along with increased productivity. Ultimately, the form and format chosen for training will depend on each company’s unique requirements. The right training partner will be able to facilitate the necessary mix of online or face-to-face training, feedback and assessment – whatever it takes to get the training completed in a way that minimises operational downtime while maximising the opportunities for valuable skills development.

By Daniel Orelowitz, Managing Director at Training Force

 

The Quality Council for Trades and Occupations (QCTO) is a Quality Council established in 2010 in terms of the Skills Development Act (Act 97 of 1998) as amended in 2008. Its role is to oversee the design, implementation, assessment, and certification of occupational qualifications, including trades, on the Occupational Qualifications Sub-Framework (OQSF). By June 2023, it will be the primary responsibility of the QCTO 4 for the oversight of the design, accreditation, implementation, assessment and certification of occupational qualifications, part-qualifications, and skills programmes in South Africa. Its role is critical in ensuring that South Africa has a qualified workforce to contribute to job creation through better opportunities. The QCTO signals major changes in the skills development space, and a significant number of organisations remain unclear as to how these new standards will affect them and their workforce. Continuous delays in rolling out these changes has resulted in mass confusion. It’s time to set the record straight so that we can move forward with training sector priorities: quality skills development that facilitates South African economic growth and recovery.

 

What is the QCTO and where does it fit in?

 

The QCTO is one of the three Quality Councils legislatively responsible for the educational paradigm in line with its constitution. Umalusi is the Quality Council concerned with the development and management of the quality of a sub-framework of qualifications for general and further education and training. The Council on Higher Education (CHE) is concerned with the promotion of a system of quality assurance for all higher education institutions, such as universities and colleges. The Quality Council for Trades and Occupations (QCTO) is charged with the establishment and management of an occupational qualification sub-framework, as well as providing guidance to skills development providers (both private and public) and assessment centres who must be accredited by the QCTO to implement occupational qualifications.

 

Change can no longer be ignored or avoided

 

It’s been more than a decade in the making, but change is finally coming. Working behind the scenes, the QCTO has gradually been building capacity as a stand-alone institution to take over its mandated functions from SAQA. “According to the QCTO, the registration end date for all ‘historical’ qualifications is 30 June 2023, with a phase-out period of one year for learners to still enrol up to and including 30 June 2024”, after which it will be necessary to move over to occupationally directed qualifications. Training, assessments, moderations, and achievements on these qualifications will only continue with learners registered before 30 June 2024. A teach out period will facilitate learners enrolled before 30 June 2024 until 30 June 2027, but statements of results and certificates will no longer be issued post 30 June 2027.

 

Renewed focus on specific skills

 

While change is always difficult and challenging, it’s important to remember that the new QCTO qualifications are intended to be specific in terms of the occupational profile of those who should benefit from the qualification to enhance the quality thereof. To facilitate this renewed functional focus, there has been a shift from generic training to specific skill sets. This is in line with the QCTO’s mandate to ensure that there are occupational qualifications that respond to South Africa’s skills development priorities to support labour market needs and state initiatives.

 

Making the switch

 

This will require transformation, right down to a business operating level. All Sector and Training Authorities (SETAs) report to the QCTO. SETAs are licensed until 2030 and will continue with the annual WSP/ATR, allocation of grants and funding, learnerships and the phasing out of legacy qualifications. Under the QCTO, they will also have the additional responsibility as Development Quality Partners (DQP) and Assessment Quality Partners (AQP) for occupational qualifications. Another major change that will take some getting used to is the programme duration for some learnerships. Some learnership cycles have now been increased to two years, in some cases five, depending on the qualification. As for SDPs, it will be critical for them to get accredited and to align themselves with AQPs, to move from the SETA space to the QCTO space as soon as possible to leverage their understanding of how best to make the transition. SDPs will need guidance in implementing and adapting to the new processes.

 

Adapt or get left behind

 

It’s essential for all organisations involved with skills development to ensure that they are positioned and ready for this change if they’re to survive the transition. A transition of this magnitude is going to have gaps and possible glitches, but now is the time for both industry and SDPs to work towards understanding these new processes and policies and perhaps challenge the implementation thereof where there is a lack of clarity or ambiguity. This is particularly important where companies are reliant on skills development programmes for Broad-Based Black Economic Empowerment (B-BBEE) level points. To this end, such organisations would be wise to partner with training provider partners that have already undertaken and achieved QCTO accreditation to lead the way.

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By Daniel Orelowitz, Managing Director at Training Force

 

Having already created more than 82,000 work experiences while attracting over 2,200 corporate sign-ups that have assisted with more than 700 Broad-Based Black Economic Empowerment (B-BBEE) level-ups, the Youth Employment Service (YES) Initiative works toward making young South Africans employable. Through 12-month learnership and internship programmes, individuals gain quality work experience, with a minimum of 5% of learners absorbed into permanent employment at the end of their programme. In addition to equipping young individuals with skills that increase employability, the YES Initiative gives businesses with lower B-BBEE ranking the opportunity to boost their standing through efforts that identify and upskill top young talent with a view to joining their workforce.

Although the aim of this programme is to inspire corporates to focus on youth employability while gaining a B-BBEE scorecard advantage through improved post-learnership absorption, there are some factors for businesses to consider before taking the leap. Let’s look at what companies need to know before getting involved in such a win-win situation.

 

Addressing unemployment through enhanced employability

 

With their future heavily reliant on job readiness and ability to enter the labour market, South Africa’s youth is particularly vulnerable in an unstable economic climate. It is here that the YES Initiative, a South African Non-Profit Organisation (NPO) joint national initiative between business, government, and labour, can step in to address youth unemployment by upskilling individuals with real work experience that leads to increased job placement. All of which happens without state funding, relying entirely on the private sector to drive outcomes based on their desire to level up their B-BBEE score.

Upskilling and levelling up

 

For businesses that cannot advance their B-BBEE ranking, participation in the YES Programme is extremely attractive. Where businesses meet all the qualifying criteria and pre-conditions, which include delivering YES-specific learning programmes, they have the means to enhance their overall B-BBEE status by up to two levels. An enterprise can participate through facilitating 12-month work experience programmes for unemployed youth by either:

1. Sponsoring and hosting youth within their business
2. Sponsoring placements elsewhere within an existing SME/supply chain
3. Providing hosting to the benefit of a new SME

Maximising the potential of YES

 

Depending on the size of the business and its turnover, YES targets will differ. In meeting such targets, businesses can progress one additional recognition level on their B-BBEE scorecards when they absorb or arrange permanent employment to 2.5% of their facilitated YES employees.

Organisations that go above and beyond the target by 1.5% and permanently employ 5% of the target group will gain one level recognition enhancement and three bonus scorecard points, while those that double the target will be enhanced two levels on their B-BBEE scorecards. For companies that have limited physical resources for running YES programmes in-house, there is the option of sponsored host placements.

Working within programme parameters

 

There are several limitations in place to prevent businesses from utilising the programme incorrectly. When it comes to placing learners in permanent employment at the end of their 12-month work experience, the company must create a new role for the learnership participant to meet the B-BBEE requirements for their score. In other words, it cannot be used to replace an employee that has been dismissed, or to fill a position that has remained vacant for an extended period. By creating a new role for learner absorption, corporates are positioned to train up talent in their company ethos to fulfil their future skills needs.

Leveraging the power of YES

 

Along with gaining the B-BBEE score benefits and tax breaks, organisations can also benefit from the ability to develop much-needed skills across their business and industry, at a reasonable cost. For unemployed youth, these work experience programmes are a critical steppingstone toward job market readiness. Through the YES programme, individuals benefit from the opportunity to gain work experience in the real world and showcase themselves in a manner that is not possible through other avenues available to job seekers.

Taking the effort out of saying YES

 

Between calculating targets and overseeing learnership programme progress, there can be a lot for businesses to manage. Partnering with a training provider that specialises in youth development is a sure-fire way to ensure that the full benefits are unlocked – both for the company and the young individuals that participate in such learnerships. A specialist training partner makes all the difference in ensuring that the correct skills are developed, and that individuals have access to mentorship that will give them a sense of direction and purpose on the career path they have chosen. Furthermore, a training provider partner can also help businesses to navigate the placement requirement, ensuring that all learners are properly and permanently placed to maximise scorecard benefits without major hassle.

Focusing on what’s important: youth skills development

 

For businesses, it’s essential to commit to youth skills development as they are the future of every workforce in every industry. I’ve seen first-hand how much untapped potential is waiting to be nurtured in South Africa’s youth. All they need is someone to take a chance on them and give them a foot in the door to prove themselves. For individuals who lack the resources or the means to get a foot in the door otherwise, the YES Initiative is the ideal opportunity. It is also an ideal opportunity for businesses to contribute in a meaningful way to talent and skills development in the country, while leveraging several other corporate benefits at the same time.

By Daniel Orelowitz, MD of Training Force

 

Technology has always been a significant disruptor in the manufacturing sector, and as the rapid acceleration of digitalisation continues, the fourth industrial revolution (4IR) is once again changing the game. Robotics and automation are taking over many previously manual processes, making roles that were once fulfilled by human staff redundant. This reduces the cost of labour and, in turn, the cost of manufacturing, therefore increasing profitability for manufacturers. However, it also means that new roles are being created, and there is a technology-related skills gap that needs to be addressed through appropriate training and skills development initiatives.

 

Automating the future

 

Robotic automation can be used to significantly enhance systems and processes, making manufacturing faster, cheaper and more efficient while improving the quality of products as well as worker safety. Some of these roles include welding, assembly, packing, shipping and handling of raw materials, including hazardous chemicals.

 

As artificial intelligence, machine learning and robotics continues to advance, robots will be able to take on a broader range of manufacturing tasks. However, while this is beneficial for the manufacturing sector as a whole, it has the potential to leave many previously employed people short of work. The required skill sets are changing – people need to know how to work with machines, rather than how to make specific products, and upskilling has become critical.

 

New skills for a new world

 

While machines take over mundane, repetitive and rules-based tasks, machines also require configuration, handling, management and maintenance, which in turn requires people. It has become imperative to upskill employees on new, technology-based skills such as these, because new job roles will be created as automation increases. There is also a growing skills gap when it comes to basic computer skills, because as digitalisation becomes more prevalent, aspects such as paperwork become computer-based.

 

The reality is that technology is taking away certain jobs while creating others, and alternative skills are essential to ensure continued employment and employability. Rather than hiring new people with new skills, those loyal workers who have become trusted business assets should be upskilled wherever possible. Not only will this allow them to add further value to a business they have developed loyalty to over the years, it will also give them greater opportunity to find future employment should their role become redundant.

 

People at the heart

 

The manufacturing sector is changing, but people are still at the heart of it, and it is imperative to give people the skills they need to continue to be productive and employable in a technology-driven future. Training initiatives need to become aligned with new skill sets required by 4IR as a matter of priority, so that the manufacturing sector can remain competitive and that its people can remain employable.

 

Companies have a responsibility to train their staff to ensure they remain relevant in the new world, and a moral obligation to help people develop skills that will enable them to continue being productive and employable. The benefit of upskilling and training from within is that these are people who already know the business, they understand the dynamics and processes, and will be able to assimilate their new skills a lot faster than hiring externally.

 

However, in order to get maximum benefit from training and development, these initiatives need to be aligned not only with skills required by the 4IR, but also skills required by the business. A trusted training partner can help to develop a training plan and roadmap for the future, to drive business forward while upskilling staff to remain relevant and adaptable in a world where technology is the future and is always changing.

By Daniel Orelowitz, Managing Director at Training Force

 

If you are running a business in South Africa and employing people, then you are probably familiar with the various taxes and levies that you are required to pay on a monthly basis, including the Skills Development Levy (SDL).

 

You are also likely to know that the SDL is a compulsory payment of 1% of your monthly payroll which gets paid over to the South African Revenue Service (SARS). You might even know that this money is then split between the different Sector Education and Training Authorities (SETAs) that your company is part of as a funding mechanism.

 

Yet, from personal experience, I can tell you that this is just about all that most companies know about the SDL – it’s a tax that is paid monthly and disappears into the ether. But do you actually understand why you are paying the SDL? And do you realise that this gives you access to funds for training?

 

Most employers probably don’t. The sobering fact is that the vast majority of South African employers do not use, understand or even know about the SDL, or that it entitles them to claim a portion of this money back from their SETA.

 

Money is tight

 

In a COVID-19-battered world, where cashflow is a challenge for many businesses, I know that this probably got your attention. In fact, SETAs have two grants from which employers can claim, and this essentially is a pool of funds that they have access to and are entitled to.

 

So firstly, we have the Mandatory Grant from which a company can claim back 20% of the 1% of payroll they paid over as their SDL. In simple terms, if you paid R100 000 in SDL, you get back R20 000. This might not be a massive amount, but as my dad always says: “Better in your back account than the taxman’s.”

 

Secondly – and this gets better – as an employer, you can also potentially receive Discretionary Grant (DG) funding from your SETA. All you need to do is apply for training interventions, be it learnerships, bursaries, skills programmes or internships. Since this is a discretionary grant, your SETA will determine your refund amount based on your application.

 

How do I get funding?

 

So why are you paying your SDL and not seeing a cent back? Well, to apply for the funding, companies must submit an Annual Training Report (ATR), which is based on the training that they conducted in the previous financial year. Additionally, you also have to submit a Work Skills Plan (WSP) which details your intended training over the next 12 months.

 

The annual deadline for claiming from the Mandatory Grant is 30 April, so your WSP and ATR must be submitted correctly by this date. There is no set deadline for DG funding applications, but each SETA will announce its own DG funding window for companies to apply. But to be able to apply for this funding, you need to have submitted your WSP and ATR by the deadline. What’s more, successful WSP and ATR submissions will gain you Black Economic Empowerment (BEE) skills development points. See where this is going?

 

Overwhelming process

 

Unfortunately, the honest truth is if you’re feeling overwhelmed by the mammoth task of fulfilling the procedural requirements of skills development, then you probably should. It is an onerous undertaking. So, how can you make your own life easier? You could hire or upskill someone to be a Skills Development Facilitator (SDF), who can do your applications for you.

 

On the other hand, you could use a consultant or specialist training company that is proficient in these processes and will ensure that everything is done and submitted properly – and let me just stress that getting it right is rather important. Due to the sheer volume of applications that the SETAs receive each year, those that are completed incorrectly simply get binned.

 

We find ourselves in economically turbulent times and a lot of businesses feel as though they cannot afford to spend money on training, because when budgets get slashed, skills and marketing get cut. But you also want your business to grow. Therefore, you have to ensure that your staff is reskilled, upskilled and tech-ready as needed. Thus, understanding and optimising your SDL has never been more important.

 

Feel free to reach out to me if you would like some advice on how you can leverage the benefits of paying your SDL, enabling you to make a difference and upskill your business.

 

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Why is it important for your company to submit Mandatory Grants?

 

Every year Levy Paying Organizations need to submit their Annual Training Report (also known as ATR) and Workplace Skills Plan (also known as WSP) BY 30 April. When you submit your WSP/ATR in time, then 20% of the taxes you pay (Skills Development Levies/SDL) is designated as mandatory grants to fund education and training programmes contained in the WSP and ATR. When you fail to submit on time, the following consequences apply to your business:

 

• You cannot claim any points on your Skills Development which is a Priority Component of your BEE Scorecard, which results in an automatic level drop in your Scorecard
• You are no longer eligible to claim the training spend back in the form of mandatory grants from your relevant SETA
• You may not be eligible to receive discretionary grant awards

Training Force has a team of specialists to assist you!
For Mandatory Grants Guidance, contact your nearest Training Force Branch!

 

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