In November, South Africa’s unemployment rate reached a 12-year high of 27.1 percent. Although this figure has since dropped to 26.5 percent (92000 people have found employment), South African unemployment ranks as one of the highest in the world. Unemployment is driven mainly by our skills crisis.
Programmes, such as corporate learnerships, that build skills are not only good for the country, but also make good business sense.
Introducing learnerships
A learnership is a time-bound, contracted partnership between an employer, a learner and a Sector Education and Training Authority (Seta). During the programme, the learner works towards an NQF-registered qualification via on-the-job training and theoretical knowledge through the Seta. However, programmes like these have benefits beyond learners and the economy. By implementing and administering robust learnership initiatives, organisations can maximise their bottom lines by leveraging tax rebates and black economic empowerment (BEE) ratings and saving on the cost of acquiring talent.
Tax rebates
The government has increased the corporate allowances for learnerships. These allowances are claimable twice per learner: when the learner is in the programme and once the learner has finished.
If the organisation hires those learners once they have qualified, it could also be eligible for an employment tax incentive.
BEE rewards
Broad-based BEE (BBBEE) goes beyond reputation; it contributes to the success of the organisation. Not only does the preferred-procurement network expose companies to opportunities such as state tenders and procurement databases, but small businesses can also access mentorship, investment and partnerships through the enterprise development benefit.
Read also: Unemployment eases in last quarter
Learnership programmes and other skills-development initiatives are excellent tools for bolstering an organisation’s BEE status, because they add as many as 20 points to the BBBEE scorecard. But the learnership must meet certain criteria to qualify for the points. These include having a structured learning component, Seta registration, a formal agreement between the learner and the organisation, and an NQF-registered qualification on completion.
Cost of talent
Train a qualified individual to work in line with a company's policies, procedures and ethics and, in most cases, you will develop an excellent resource for your business. However, absorbing learnership trainees on completion offers more than just convenience. When considering the significant costs of interviewing, hiring and training, skipping the recruitment process can save you a significant portion of a recruit’s salary. Furthermore, reinvesting in learners reinforces their marketability. Sebata’s director of skills development, Siviwe Kase, says: “Our model is to keep learners on our systems for three years. We up-skill them until they are highly competitive in the jobs market. After this, they can also enter a 12-month internship programme.”
Doing good for SA
Although unemployment cannot be ended overnight, corporate learnerships do make a difference at grassroots level.
Carl Stroud, the managing director of Sebata, says: “Through learnerships and the recruitment of unemployed youth directly from the demographic area of the municipality, skills development is achieved in areas that wouldn't traditionally have had access. These learnerships, in conjunction with smart technologies, will provide a sustainable foundation over the medium to longer term.”
It isn't only morally important that organisations find ways to support transformation. A skilled working population also makes a difference to their operational success. Add to that the compounding financial rewards of formal learnership programmes, and it may make business sense for them to get involved sooner than later.
Greg Morris is the chief executive of MMG Holdings.