Businesses must upskill staff

Skills development and training is sorely needed to advance South Africa’s people.

The Revised Codes of Good Practice for Broad-Based Black Economic Empowerment (B-BBEE) are in play, with far reaching implications for companies that do not have at least a 51% ratio of black ownership.

One of the most impactful changes is the increased emphasis placed on skills development and its larger weighting, with the required percentage of turnover to be invested in skills development having increased to 25 points, up from 15.

The focus has been moved from soft skills to rewarding so-called ‘hard skills’, which are measured through the achievement of qualifications and the completion of accredited courses.

Training Force, one of South Africa’s largest learnership providers, believes that learnerships are undoubtedly the most economical way to achieve maximum points. Not only will companies offering learnerships have contributed to their own B-BBEE score, they will have created a talent pool from which they – and other companies struggling with skills shortages – can recruit.

Learnerships can also be included as part of the allowance described in Section 12h of the Income Tax Act. The tax allowance makes it possible for a company to heavily subsidize the cost of the learnership, while at the same time subsidizing the 6% of leviable spend required. Furthermore, learnership salaries can be included in a company’s training spend making up the allocated 6%.

With the increased expenditure on education and development outlined in the Codes, and greater emphasis on formal education rather than on informal skills transfer, companies seeking to achieve the maximum possible points in the skills development element of the Codes will need to partner with a credible, recognized and accredited training provider.

The ideal training partner should offer consulting services that identify the most effective ways to complete training in an organisation, helping companies understand the requirements of the law, assist them in compliance, and ensuring that all training, education and development initiatives help them achieve the maximum possible points as outlined by the new Codes.

There is no doubt that the new Codes are more onerous and demanding than the old ones – they have been put in place to drive advancement in South Africa’s people through much needed education, skills development and training – and this makes it all the more important for companies to partner with the right service provider to ensure they receive good value for the money they are required to spend in this regard.

By Steven Herscovitz, Managing Director of Training Force, a Workforce Holdings company