Skills development is a crucial imperative that assists businesses in being globally competitive. The development of your workforce is necessary to achieve this, especially when considering that the metal and engineering industry is currently facing an artisan, technical engineering, and management level skills shortage.
With the industry contributing to a large portion of South Africa’s economy, it is essential that this critical skills shortage is rectified and that there is a focus on building these key competencies.
Skills development training will do just this, as it ensures that your staff is equipped with the professional knowledge, skills and expertise needed to drive business growth and development.
What is Skills Development?
When discussing skills development in a South African context, it is essential to understand what it is and what purpose it fulfils for skill acquisition in relation to work and business.
According to the Skills Development Act 97 of 1998, skills development aims to:
- provide an institutional framework to devise and implement national, sector and workplace strategies to develop and improve the skills of the South African workforce;
- integrate those strategies within the National Qualifications Framework contemplated in the South African Qualifications Authority Act, 1995;
- provide for Iearnerships that lead to recognised occupational qualifications;
- provide for the financing of skills development by means of a levy-grant scheme and a National Skills Fund;
- provide for and regulate employment services; and
- provide for matters connected therewith.
In this way, employers are encouraged to create an active learning environment, where employees are given the opportunity to build and acquire new skills. It also provides a way for new entrants into the labour market to gain work experience and enables those who have been previously disadvantaged, who do not have the skills or education necessary for employment, a way to gain experience. This is essential for a country like South Africa that has high unemployment rates. By equipping South Africans with skills and providing accreditation, you are ultimately reducing inequality and poverty.
Businesses can also reap great rewards from skills development training. Skills development ensures that your employees have the knowledge and skills needed to effectively and efficiently do their jobs. This enhances performance, customer experience, and ultimately enhances competitiveness and drives profitability. Skills development also positively impacts BBBEE scorecards and has several business benefits related to the South African Revenue Services (SARS) and The Services Sector Education and Training Authority (SETA). We explain this in more detail further on.
Skills development in the context of the Metals and Engineering Industry in South Africa
We have briefly mentioned that one of the metals and engineering industry’s biggest challenges is the skills shortage. This skills shortage is visible across all business levels, from high-level management to artisans. The specific skills in question include technical and trade skills, basic numeracy, foundational skills like literacy, problem solving, soft skills, project management, quality management and general management skills.
This lack of skills heavily impacts local economic development as well as the global economy. There are many business opportunities available but if you do not have a pool of skilled individuals to do the work required you cannot take on the project, and will ultimately lose out on that opportunity and profit. This is a conundrum for many businesses, but it can be solved with a long-term focus and commitment to skills development training. It is important to note that skills development training should be built into the business’s overall long term strategy as it is not a once-off process.
Steps needed to implement a successful skills development plan
To run successful skills development programmes effectively, you need to have an implementation plan in place. These are our ten steps to follow for the successful implementation of a skills development plan:
Step 1: Align Planned Training to the Organisation’s Strategy
A company’s skills development strategy should directly address the skills shortages that impact the business and its objectives. By identifying these gaps, the business will be able to effectively implement skills development programs concerning the business’s goals. This ensures alignment between the business objectives and the skills required for performance delivery, profitability and growth.
Step 2: Changes in Technological Aspects
Many companies are transitioning from older product and service delivery platforms to more technologically advanced manufacturing, supply, and delivery mechanisms. These planned changes in the businesses’ processes will require employees to learn various new skills and competencies within their workforce. Rapid change is usually a significant cost driver in the business’s sustainability planning. Therefore, it is crucial that emphasis is placed on these types of training interventions and that these are in line with business budgeting and planning strategies.
Step 3: Skills Audits
The main purpose of conducting a skills audit in an organisation is to identify the skills and knowledge that an organisation and its employees have, and what skills are required to drive business and growth objectives. Skills audits help ensure that training is targeted and addresses a specific need rather than training employees for training’s sake.
Step 4: Training Needs Analysis
Training Needs Analysis helps determine what training needs to be completed, over a specific time period, that will still allow employees to complete their jobs as effectively as possible. Sometimes employees may need to undergo additional training to ensure on-going compliance with new legislation. Employees may also need to keep up to date with the latest technologies that allow them to do their jobs to the best of their ability, thereby maintaining the company’s competitive edge.
Information that will be assimilated into the Training Needs Analysis may be gathered from strategic skills needs, the current competence gap analysis, individual development plans, and succession plans.
Step 5: Develop Your Annual Training Plan
Developing the company’s annual training plan should involve a consultation with all stakeholders to optimise limited resources and time. The development of a consultative forum also called a skills committee, is necessary for this process. This skills committee will consist of employee and management representatives.
For your annual training plan to be compliant, you will need to submit the Workplace Skills Plans and preceding year’s reports to the relevant SETAs annually for moderation. This is done to access grant funding from SETA for training and development. Many businesses also choose to utilise a Skills Development Facilitator (SDF), who assist in developing and sourcing high quality training delivery initiatives to address the company’s requirements.
A business will need to ensure that there is an active training plan in place that spans a 12-month period during the financial year. The business will also need to ensure that there is sufficient funding to cover the planned training expenditure per financial year and that an accredited training provider conducts this training. This will require taking transformational objectives into account.
Step 6: Transformational Alignment
Businesses should consider their transformational objectives and take reasonable steps to address these in their Annual Training Plans. In the new codes of practice in terms of the BBBEE Act, skills development has been prioritised. To achieve this objective, a sub-minimum score of 40% of the targeted 20 points must be met. If this is not met, the company risks dropping a level rating in its final scoring. The minimum to be achieved is 8 points. Businesses will need to focus on aligning skills development with training initiatives listed on the Learning Programme Matrix for maximum scorecard benefit to accomplish this.
It is important to note that the provision of opportunities for unemployed persons and graduates for experiential training and bursary support will strongly benefit a company’s BBBEE scoring.
Step 7: Implementation of the Training Plan
Training should be delivered as per the Training Plan and opportunities optimised during productive peaks to provide these training and development initiatives. Accurate records, registers and documentation should be retained for reporting purposes. Initiatives should be evaluated for both the programmes’ effectiveness to address the skills gap and assess the return on the investment made into these initiatives. Feedback should be provided to stakeholders who were part of the planning and decision-making process. Improvements need to be fed back into the next training cycle.
Step 8: Succession Planning and Talent Management
Although training planning is usually monitored on an annual basis, Succession and Talent Management may be planned and monitored for two, three or five years. Succession planning is a talent management process that builds a pool of skilled individuals who are ready to fill critical roles when leaders and other key employees step down. Companies with succession planning programmes in place are known to foster a talent-oriented culture by recruiting skilled workers and top talent.
Step 9: Graduate Development Programmes
A graduate training programme bridges the gap between academic training and business skills and experience. Graduate training programmes ease young people into the practical work environment and give them the skills necessary to become part of the larger team. These programmes tend to last either one or two years. These candidates may also rotate between various divisions in a business. As a talent management process, these programmes provide a pool of qualified candidates who can mitigate employee turnover in a company.
Step 10: Tax incentives
Training staff members through learnerships, internships and skills programmes with accredited training companies, benefit a company financially in several ways. The South African Revenue Service (SARS) and the Sector Education and Training Authority (SETA) have structured financial benefits for companies that train their employees through accredited providers. The Income Tax Act provides employers with a tax allowance to provide learnerships and apprenticeships for employees.
There is also an Employee Tax Incentive (ETI), which is an incentive to encourage employers to hire young adults between the ages of 18 and 29 years. This reduces the employer’s cost of hiring through a cost-sharing mechanism with the government. This allows a company to reduce the amount of Pay-As-You-Earn (PAYE) they pay while leaving the employee’s wage unaffected. Employers will be able to claim the incentive for a qualifying 24-month period for all qualifying employees.
Skills development training is a valuable tool for a business, and there are long term benefits for the company and employees which drive economic growth. For skills development to be successful and sustainable, it needs to be implemented in line with best practice and aligned with the company’s business objectives. For more on how to effectively implement skills development training in your business, sign up to Industry Hub and gain access to our HCSD Resource Portal.