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02 June 2005

Factsheet 6 : Enterprise training in South Africa

Press Release

The National Skills Development Strategy (NSDS) of 2001 has great potential to reverse the low skills levels of the past few decades in South Africa. That is so because at the heart of the new institutional regime for skills formation lies better interaction between employers, education and training providers, and government departments. The better interaction is expected to encourage individual employers to participate more and increase their investment in skill development in South Africa.

Indeed, as more and more firms participate in enterprise training and as more funds become available for training, it is hoped that lower-level staff will gain greater access to skills training programmes and so increase their chances of securing higher-level employment.

Levels of training in South Africa are presently measured primarily through skills levy payments and the amount of money claimed back by companies for training employees. In the Provisional Report of the Department of Labour in 2001/2002, it was observed that more than R3.2 billion was collected from 120 225 firms through skills levies. Of this amount, R2 billion is available to be claimed back by firms for the training of employees.

However, disbursing this money back to firms has been very slow. By September 2002, of the 120 225 firms that had paid levies only 21% claimed back money for training in 2001/02. In more recent documents, the Department of Labour cites 14 261 firms receiving grants, constituting only 10.4% of participating firms (HSRC calculation).

The Department reports quarterly on the levy and grant system, and this may account for some of the fluctuation in the figures cited. However, the main cause of such low grant disbursement rates are linked to initial teething problems in the new Sector Education and Training Authority (SETA) system. In the future, it is expected that a larger number of firms will claim back money. This will then give a clearer indication of the level of training taking place in South Africa.

Nonetheless, drawing on five recent training surveys and data from recent Department of Labour (DoL) documents, it is possible to say that reasonable progress is being made with training in large and medium-sized firms in South Africa, that there has been good progress in training at the intermediate level through the new learnership system, but that small firms are not participating as readily in the levy-grant system. The overall training rate in South Africa presently is probably between 20-30%.

Also, during the 2001/2002 financial year about 1 002 201 workers (out of a total workforce of 9.3 million people) participated in structured learning programmes (including NQF Level 1 programmes), and this increased to 1 166 216 by the second quarter of 2002/2003. This suggests that training is definitely increasing year by year.

In this regard, it has been said that a key future indicator of the success of the new training regime in South Africa will be the learnership system. The NSDS projected that 80 000 people will have entered learnerships by March 2005. By March 2003, those registered for learnerships had reached 23 517. It was not yet clear, however, how many trainees had actually completed their learnerships and how many had acquired employment after training.

Finally, two issues remain of deep concern, namely that:

  • Training is largely offered through in-house, short course and employer-specific instruction. This is unlikely to upgrade the skills base of the workforce in terms of the acquisition of whole qualifications along the National Qualifications Framework (NQF), and could jeopardize one of the main tenets of the National Skills Development Strategy (NSDS).
  • The beneficiaries of key forms of training remain white and male, particularly at the high skills end. Given that those previously disadvantaged under apartheid are not adequately accessing skills training particularly at the high skills levels, this suggests that the task of implementing a new skills regime in South Africa has not made huge leaps forward since 1998, though the process has begun in earnest.

If the NSDS is to make a difference, it will need greater state intervention to deal with the structural inequalities in the labour market. It will also require greater commitment and confidence on the part of employers to treating training as an asset that can lead to increased productivity and growth, rather than something that negatively impacts on cost structures.

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