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02 June 2005

Factsheet 2 : Low levels of training in the workplace

Press Release

The workplace plays a pivotal role in human resources development in South Africa. The national economy and its associated institutions of enterprise training are the key institutions in this area.

National economy

The functioning of the national economy over the past decade has been contradictory. On the one hand, government has accomplished certain important macroeconomic achievements, in particular, economic stability and fiscal deficit reduction. An important consequence of the ensuing macroeconomic stabilisation has been the gradual expansion of state expenditure since 2001.

The 2002 and 2003 budgets represent a more expansionary stance, in recognition of the fact that sustainable growth is not only contingent on a sound macroeconomic and fiscal position, but that investments in infrastructure, human capacity and skills are also critical. Government has also secured other significant economic goals, most importantly, an improvement in manufactured exports. During 1991 ? 2000 exports grew at an average of 5.5% per year.

On the other hand, government?s economic achievements, with respect to macroeconomic stability and export markets, have had their downside, particularly with regard to economic growth and employment. GDP growth has been declining in South Africa since the 1970s, falling from an average of 6% during the 1960s, to 3% in the 1970s, 2% in the 1980s, and 1.3% in the 1990s. In addition, there has been an ongoing ‘skewing effect’, whereby manufacturing exports have tended to be capital and skills-intensive, leading to an increase in the demand for skilled labour and a massive growth in the unemployment of poorly skilled workers.

Enterprise training

Training performance, in the recent past, has been mixed. Some important gains were:

  • the introduction of progressive labour laws that cedes important employment rights to workers;
  • the de-racialisation of the education system and many black workers acquiring intermediate level skills training;
  • during 2001/02, approximately R3.2 billion was collected from 136 645 out of 208 697 eligible firms through skills levies;
  • several of government?s own training targets are close to being met, for example, the Department of Labour?s National Skills Development Strategy (NSDS) set its target for skills development grants at 75% of large enterprises with more than 150 workers by March 2005. By March 2002 almost 67% of enterprises in this category were providing access to skills training for their employees;
  • government is attempting to place at least 15% of employed workers in structured learning programmes by March 2005. During the 2001/02 financial year, a total of more than one million workers out of a total workforce of 9.3 million people participated in structured learning, including NQF Level 1 programmes (the equivalent of Grade 9). These data suggest that roughly 10.7% of the total workforce has received some form of structured training in the 2001/02 financial year, which is 67% of government’s target.

However, out of the 120 225 firms who pay the levy, only 21% had grants disbursed to them (also see Fact Sheet 6) in 2002. A huge percentage of the R3 billion-levy income collected remains unspent and many of the new sector education and training authorities face problems of institutional capacity.

In addition, against a target of at least 20% of new and existing registered small businesses participating in skills development initiatives by March 2005, only 7% of levy-paying small employers were providing training by March 2002.

Clearly, the most significant challenge facing government?s HRD Strategy is to get the bulk of enterprises in South Africa (72% of which are very small) to train their employees, become more successful businesses, and absorb a much greater proportion of the available workforce.

Overall, the training targets set by government still impacts on a minority of the total employed workforce, and government will need to expand the scale of training considerably, if a larger proportion of workers are to benefit from enterprise training in the medium term.

Dualism in the world of work

Also evident is the all-pervasive imprint of dualism. A progressively advancing high-technology export sector is leaving behind a larger intermediate-skill middle economy and a low-skill peripheral economy, with the latter two categories being characterised by fewer formal sector jobs and minimal skills development activities.

To address this fundamental dualism the following requirements should be met:

  • investment towards the generation of high-end and low-end employment opportunities;
  • the implementation of a package of welfare transfers (through unemployment benefits and/or massive public works programming) to compensate for the unavailability of wage labour opportunities, and to stimulate the domestic economy;
  • greater relaxation of government’s monetary and fiscal policies, and the adoption of a more expansionary stance, in order to stimulate economic growth from within.

What is being proposed is the more aggressive ?joining up? of economic, industrial, firm-based, and education and training policies, so as to create one overarching and coherent economic and human resources development strategy for the medium to long term.

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