There is no doubt that conducting business in South Africa today is both complex and often challenging. One of the most frustrating factors we read about in the media is the growing skills gap in the country. We continue to have one of the highest unemployment rates in the world. Changes in recent BBBEE legislation have placed greater emphasis on skills development, which must be in recognition of closing this gap and ultimately reducing the level of unemployment. As business owners or leaders, how can we contribute to reducing the skills gap in a manner that is both sustainable and beneficial to our businesses? One way of reducing the skills gap is by more organisations running learnerships.

Learnerships are not new, but from our consulting experience the level of knowledge around what a learnership entails, the benefits to both employers and learners and the way in which they are structured remains low.

What is a learnership?

It is a structured learning programme that is made up of theoretical knowledge and some practical skills that are learnt while in the workplace. The programme usually runs for a 12 month period and the learner achieves a full qualification on the National Qualifications Framework after the successful completion of the programme.  The qualification is transferable with the employee and remains their qualification not the employers. Employers can also offer learnership opportunities to unemployed learners.

How does a learnership work?

Before commencement, the learner, the chosen training provider and the employer are required to sign a formal learnership agreement with their Sector Education and Training Authority (Seta). Without such an agreement, the learnership will not be valid. Learnerships offer a great deal of flexibility for the employer. Depending on the number of learners, the training provider will often conduct the training at the employer's premises as per an agreed schedule. This is usually two to three days per month depending on the learnership.

This theoretical component is usually for four to six months at the learning institute with the remainder of the 12 months taking place in the form of gaining practical skills in the workplace.  Alternatively learners can join a public course to complete the learnership.

Learnerships as a transformation tool

The new BBBEE codes place a great deal of emphasis on skills development as the targets have been increased and it is now a priority element in which failure to reach the sub-minimum for skills development will result in an organisation's level being discounted by one level. It is therefore clear that the aim of this element is to further encourage corporate South Africa to allow people to access skills, qualifications and ultimately improve employment figures and the social upliftment that would be associated with this target.

The target skills development spend for a generic company (turnover above R50 million) on the new scorecard is 6% of their annual payroll. For those with a large payroll this figure can be daunting! The most cost effective way to achieve this target is to run a learnership programme for employees as the codes allow for employers to use the employee's salary towards this target while also using the cost of the learnership.

In addition, companies are able to score an additional four points on the scorecard if they have the equivalent of 2.5% of their headcount of black people participating in learnerships, apprenticeships and internships.  However, this number needs to be proportioned correctly according to the economic active population.

Closely linked to the BBBEE legislation is the employment equity legislation in which the planning of learnerships would provide a vehicle to assist in meeting employment equity targets by providing previously disadvantaged groups opportunities to improve their work related competencies by obtaining qualifications, and thus allow them greater opportunities to progress within the organisation.

Disabled learnerships

Disabled people make up 10% of the economically active population but less than 1% are employed, which falls short of the 4% target set by government more than seven years ago. There are training providers that have developed a solution to assist organisations in meeting this target by addressing learning and employment opportunities through the use of full time learnerships for disabled people. This vehicle further benefits employers from a BBBEE perspective as it can contribute towards the targets set for skills development on the new BBBEE scorecard.

Benefits of learnerships to employers

• Learnerships involve a high proportion of on the job training; so an organisation's productivity is not impacted as much as with other traditional learning methods.
• Learnerships are generally industry specific so they are directly related to specific occupations and therefore relevant to your business.
• There is a greater credibility of qualifications as employers have the assurance that the learners can demonstrate the competency reflected in the qualification as they have to prove, via their portfolio of evidence, that they are competent.
• There is an opportunity for organisations to work with training providers and customise the learning programme to meet specific workplace needs and make the examples relevant to the business.
• A learnership can be a good tool for promoting multi skilling amongst an organisation's employees as it develops the competence of employees in all components of the work process within an occupation.
• The learning application is practical so learners should be able to improve their work performance following the learnership.
• Learnerships as with other skills development interventions can act as a retention tool, one of the main reasons employees leave their jobs is a lack of development opportunities.
• The employer can apply for Seta funding to assist with funding of learnerships, the Setas have a mandate to promote this type of 'PIVOTAL' training.
• Learnerships carry tax incentives, which make them more financially attractive to employers.
• The more skills that can be gained within an organisation, the greater the productivity and the more meaningful the individual's contribution can be towards the organisation's success and ultimately the country's growth.
• Entering into a learnership agreement with unemployed learners can contribute to building up a larger skills pool from which employers can recruit people with relevant skills.

What are the benefits for learners?

• For historical reasons a large number of learners have never had the opportunity to obtain a recognised qualification, and would not be able to afford the cost of obtaining one without the support of an employer.
• A learnership allows the learner to acquire theoretical knowledge that is directly relevant to their occupation as well as the ability to apply learning to real life work situations.
• A learnership allows them to have a greater understanding of what they are doing and why.

How do the tax incentives work?

Employers are able to take advantage of the SARS tax incentive that is available for all learnerships agreements that are registered with the Skills Development Act, 1998 and entered into between learner and employer before 1st October 2016. The tax incentive are deductions on your company's taxable income that can be claimed for each learner that you have in your employment, once at the start of the learnership, and again upon its completion. There are only two available levels of tax incentives that can be awarded:

• R30,000 commencement and completion allowances for learnerships and apprenticeships (i.e R60,000 in total)
• R50,000 commencement and completion allowances for learners with disabilities (R100,000)

For each year that a learner is registered for a learnership the employer can claim the allowance.  The allowance is based on a 12 month period and full periods of a month, if a learnership starts half way through the employer's year of assessment, half of the allowance is claimed by the employer in the first year and half in the second year.

What considerations should be made before implementing learnerships?

• It is important to ensure that you select the right people to participate in the learnership.  A learnership is an investment for both parties either in time or money and it is important that both parties are aware of the commitment involved. This means selecting learners that have shown the right attitude and have a future within the organisation.
• Ensure that you choose a reputable accredited training provider who has a proven track record in the running of learnerships.
• The amount of administration involved in the running of a learnership can often seem overwhelming if you are unfamiliar with the documentation requirements and it is worth partnering with a company that can assist with the documentation.
• Once committed to running a learnership ensure that you are able to provide learners with the time off to attend the theoretical sessions. These sessions are planned for the duration of the learnership and as such should be taken into account when planning production schedules etc.

Rachel Manzie -  
DRG Outsourcing (Pty) Ltd
Tel: +27 (0) 31 - 767 0625
Fax: +27 (0) 31 - 767 3280
david@drg.co.za
www.drg.co.za