25 Mar 1997

No.11 - 25 March 1997



Labour Minister, Tito Mboweni this week announced a major new policy
approach that will give new impetus to quality training in South Africa.
The Labour Ministry Green Paper, Skills Development Strategy for Economic
and Employment Growth in South Africa
aims to set in motion a skills
revolution as a central part of South Africa`s drive for growth in employment
and productivity. A four phase implementation plan will see the strategy
commence by October 1997 and fully operational after the end of 2000.

What are South Africa`s Skills and Training Problems?

In a world competitiveness survey in 1996, South Africa was ranked last
out of 46 developing countries in terms of human resources development
and other labour market indicators. There are several key problems that
have contributed to this poor record:

  • there is a mismatch between education and training decisions and the
    real needs of the economy and society - ie there is too little training
    in skills that are needed, and too much training in skills that are inappropriate
  • the level of industry training is much lower than that of our major
    trading partners, leaving South Africa with a major competitive disadvantage
  • the sectors in which most growth and employment opportunities are likely
    to occur spend less on skills development than the national average
  • most industry training is informal
  • only a very small proportion of formal training is provided to lower-level
  • there is a shortage of high quality management
  • firms fail o recognise the importance of training within the new competitiveness
    environment and within their competitive strategies
  • apprenticeships and artisan training has declined dramatically.

The New Skills Development Strategy

The new Skills Development Strategy aims to address these deficiencies
through six core components:

1. Information for Strategic Planning will ensure that labour
market information is adequately collected, analysed and disseminated,
so that education and training needs can be identified and acted upon.

2. A System of Learnerships will link education and work experience
in a structured approach that leads to registered qualifications within
the National Qualifications Framework.

3. Employment Services will be expanded, to improve guidance
and placement services matching workers to jobs, giving advice on support,
assisting with social plans to deal with mass retrenchments and helping
vulnerable groups to access the labour market.

4. Enhancing Provision will achieve high quality training provision
through a responsive, cost-effective and accountable public funding system.
New procedures are proposed relating to competitive tendering and improved
programme quality for private training providers, industry training centres,
NGOs, Regional Training Centres and Training Trusts.

5. Skills Development Intermediaries and National Co-ordination
will improve training delivery and co-ordination at sectoral and national
level. A consolidated set of sectoral training intermediaries is proposed
to assist communities, enterprises, industries and individuals in formulating
and implementing training plans, linking plans to other strategic objectives
and facilitating access to available subsidies. A National Skills Authority
is proposed, through restructuring the National Training Board, to assist
in the strategic co-ordination and development of a national skills development

6. The Funding of Skills Development will be reformed to create
an effective partnership between government, the private sector and individuals.
A national levy-grant system is proposed, that will require private sector
employers to pay a payroll-based training levy to fund training, with grants
for employers to offset costs incurred through training in defined areas.

The Levy-Grants System in Detail

The most controversial proposal is the levy-grants system for funding
training. The market has failed to generate competitive levels of training
within South African industry, and this proposal will ensure that private
sector employers bear their fair share of the costs of training. The proposal
is that employers will pay a national training levy equal to between one
per cent and 1.5 per cent of payroll. Sectoral Skills Development Funds
will receive 80 per cent of the total levy revenue for sectoral training,
and a National Skills Fund will receive 20 per cent to address priority
national skill needs. Employers will, by law, have to pay the levy to contribute
to training funding, but those employers already engaged in training in
defined areas will be eligible for grants to offset these costs.

The national training levy system will:

  • ensure adequate funding for training
  • ensure private sector employers pay their fair share of training costs
  • create a real partnership with the government, which will provide a
    clearly-defined fiscal contribution.

The training grants system will:

  • allow funds to be targeted to areas of strategic skill needs
  • give enterprises the incentive to train in targeted areas
  • compensate employers who are providing training in defined areas
  • encourage employers not currently training to raise their skills development
    levels in order to recoup their levy contributions
  • allow the government to leverage better enterprise training, through
    the conditions which attach to the grants.

Benefits of the Skills Development Strategy

The Skills Development Strategy aims to achieve the following key results:

  • the development of effective national coordination and information
    systems for the successful implementation of the strategy
  • rising workplace performance and access to work opportunities through
    improved in-service training and the successful introduction of Learnerships
  • increased number of job seekers placed in sustainable employment or
    self-employment activities
  • high quality and relevant education and training provision by service
  • the successful implementation and management of the Skills Development
  • the introduction of sustainable sources of funds and efficient funding
    mechanisms for implementing the Strategy.