i

CONTENTS

1 INTRODUCTION....................................................................................................1 1.1 Background ..........................................................................................................1 1.2 Outline of this report .............................................................................................2 2 OVERVIEW OF GRANT PAYMENTS..........................................................................3 2.1 Total amounts expended .......................................................................................3 2.2 Grants paid ...........................................................................................................4 3 GRANT A: SKILLS DEVELOPMENT FACILITATORS....................................................5 3.1 Registration of skills development facilitators ........................................................5 3.2 Payment of Grant A ...............................................................................................5 3.3 Profile of skills development facilitators.................................................................6

3.3.1 Age profile of SDFs ..........................................................................................6 3.3.2 Gender............................................................................................................7 3.3.3 Highest qualifications......................................................................................8 3.3.4 Provincial distribution of SDFs .........................................................................8 3.3.5 Occupations of SDFs........................................................................................8 3.3.6 Experience as skills development facilitators ....................................................9

3.4 Processes established in organisations.................................................................10 4 GRANT B: WORKPLACE SKILLS PLANS .................................................................11 4.1 Payment of Grant B .............................................................................................11 4.2 Geographic distribution of employers...................................................................12 4.3 History of training activities.................................................................................12 4.4 Training planned for 2000/2001 ..........................................................................14

4.4.1 Strategic skills development priorities............................................................14 4.4.2 Nature of planned training.............................................................................16 4.4.3 Beneficiaries of training.................................................................................17

4.5 Vacancies ...........................................................................................................18 5 GRANT C: ANNUAL TRAINING REPORTS...............................................................20 5.1 PAYMENT OF GRANT C.........................................................................................20 5.2 Total employment ...............................................................................................21 5.3 People who received training in Year 1.................................................................24 5.4 Training outcomes...............................................................................................24 5.5 Training spend ....................................................................................................27 6 GRANT D: STRATEGIC CASH GRANT.....................................................................29 7 CONCLUSIONS....................................................................................................31 7.1 Participation of organisations in the grant system ................................................31 7.2 Grant applications as sources of information ........................................................31 7.3 Profile of the sector.............................................................................................32 7.4 Organisations’ involvement in training .................................................................33 7.5 Skills needs and skills shortages ..........................................................................33

ii

LIST OF TABLES Page

Table 1: Distribution of Grant A payments according to grant size 5 Table 2: Distribution of Grant A payments according to sub-sector 6 Table 3: Provincial distribution of SDFs 8 Table 4: Occupations of SDFs 9 Table 5: Methods through which SDFs were appointed 10 Table 6: Distribution of Grant B payments according to grant size 11 Table 7: Distribution of Grant B payments according to sub-sector 11 Table 8: Vacancies that employers found hard to fill 19 Table 9: ATRs as % of WSPs 20 Table 10: Distribution of Grant C payments according to grant size 21 Table 11: Distribution of Grant C payments according to sub-sector 21 Table 12: Profile of employees as at 31/03/2001 23 Table 13: Positive deviations from the WSPs 24 Table 14: Negative deviations from the WSPs 25 Table 15: Training spend in Year 1 27 Table 16: Distribution of Grant D payments according to grant size 29 Table 17: Distribution of Grant D payments according to sub-sector 30

LIST OF FIGURES

Page

Figure 1: Distribution of total levy income 3 Figure 2: Distribution of grant payments 4 Figure 3: Number of organisations that received grant payments 4 Figure 4: Age profile of SDFs 7 Figure 5: Gender profile of SDFs 7 Figure 6: Highest qualifications of SDFs 8 Figure 7: Geographic distribution of employers who received Grant B payments 12 Figure 8: Number of employees trained in 1999/2000 by population group 13 Figure 9: Gender of employees trained in 1999/2000 14 Figure 10: Occupational distribution of beneficiaries of training 17 Figure 11: Racial composition of beneficiaries of training 17 Figure 12: Training planned for 2000/2001 compared to training received in 1999/2000 18 Figure 13: Occupation and racial profile of employees as at 31/03/2001 22 Figure 14: Nett deviation from WSPs 26 Figure 15: Percentage nett deviation from the WSPs 27 Figure 16: Average per capita spending on training in Year One 28

LIST OF APPENDICES

Page

Appendix A: Grant A format 35 Appendix B: Grant B format 36 Appendix C: Grant C format 39 Appendix D: Grant D format 42

iii

SUMMARY

The grant application forms submitted to Fasset are not only an important mechanism for interaction

between registered workplaces and the SETA but also, on an aggregate level, provide a profile of the

sector and insight into the training activities, skills needs and human resources development priorities

of its organisations. In this report an analysis is presented of the grants paid in the 2000/2001 finan-

cial year (Year 1 of the implementation of the Skills Development Levy and Grant System), and infor-

mation obtained through that year’s grant application forms. The grants that were available in Year 1

are: Grant A (registration of a skills development facilitator (SDF)); Grant B (submission of a workplace

skills plan (WSP)); Grant C (submission of a report on the implementation of the WSP, also known as

an annual training report (ATR)); and Grant D (a discretionary grant paid on the basis of employers’

membership of and participation in Fasset working committees and structures, assistance in Fasset

activities, submission of Employment Equity reports and provision of additional information that could

be used for the Sector Skills Plan (SSP)).

In Year 1 a relatively small proportion of the employers that fall under Fasset submitted grant

applications. The 443 organisations that registered SDFs represented less than 7 % of the organisa-

tions in the sector. Applications for Grant B (WSPs) dropped to 324 or approximately 4,5 % of the

organisations in the sector. Only 165 or just more than 2 % submitted ATRs and applied for the dis-

cretionary cash grant (Grant D). The largest fallout occurred among small organisations. The low par-

ticipation rates in Year 1 resulted in the payment of only R9,8 million in respect of Year 1 grants (45 %

of the total amount available for grants).

As SDFs act as links between the SETAs and individual employers, it is important for Fasset to

have some understanding of the biographical profile of SDFs. The profile that emerged from the grant

application forms revealed that more than half of the SDFs who were registered in Year 1 were men,

their average age was 40 and the majority were professionally qualified – 83 % had university degrees

and 60 % had post-degree qualifications. The majority of SDFs were appointed by their employers to

fulfil the function of SDF.

The analysis also revealed some of the characteristics of the sector that are generally known

and that were confirmed by other research: The sector employs mainly highly skilled people and the

occupational categories of professionals, technicians and associated professionals and administrative

workers and clerks are predominant in the sector. Thus, the lead time for the education and training

of employees in the sector is relatively long and the sector needs to be pro-active in the identification

of and provision for skills needs. Furthermore, the sector is lagging far behind in terms of recruitment

of black employees – especially in the managerial and professional categories. Women are well repre-

sented in the sector, however, except in the managerial category where they are still outnumbered by

men. African, coloured and Indian women are moving into the sector at more or less the same pace

as their male counterparts. Organisations in the sector are concentrated mainly in three of the prov-

inces: Gauteng, KwaZulu-Natal and the Western Cape.

iv

The organisations that submitted grant applications in Year 1 are very much involved in the

training of their staff. The amounts that they spent on training by far exceeded the levies paid by

them in the particular year. The largest amounts of money spent and the highest per capita spending

was on the training of professionals. Although positive as well as negative deviations from the WSPs

occurred, in total the training that materialised exceeded the training that had been planned for the

year.

The strategic skills development priorities that were addressed by training in the sector are:

• management and leadership skills, including business management skills, skills in mentorship

and coaching, performance management skills, general supervisory skills and skills in the han-

dling of labour relations;

• risk management;

• basic financial skills such as handling of statutory returns, debtors, creditors, invoicing and pur-

chasing;

• specialised financial skills, including accounting and auditing skills, company financial man-

agement skills, project financial management skills, tax consulting skills, knowledge of financial

markets and securities, knowledge of financial products and investments and skills in financial

analysis;

• actuarial skills;

• computer literacy and computer skills, including basic computer literacy, proficiency in the utili-

sation of word processing programmes and spreadsheets, proficiency in the utilisation of spe-

cialised accounting software, proficiency in the utilisation of specialised auditing software;

• analytical and research skills, including financial market analysis;

• marketing and sales skills and general customer care and customer service skills;

• communication skills, including business writing skills, oral presentation skills and negotiation

skills;

• specialised information technology skills, including systems development and systems engi-

neering and internet development; and

• personal development skills, such as the ability to undertake lifelong learning, time manage-

ment skills, “self-management” skills, the ability to manage personal learning through the

internet, assertiveness training and motivational training.

The WSPs prompted employers to indicate vacancies for which they could not find suitable

candidates. These vacancies are an indicator of possible skills shortages and need to be seen in rela-

tion to the total employment in the sector. The vacancies that employers identified in the WSPs of

Year 1 constituted not more than 2 % of total employment. This may be an indicator that the short-

ages are not huge and acute. However, if the positions that cannot be filled are of strategic impor-

tance in organisations or in the sector generally, growth of the sector may be stifled by the absence of

the specialised skills.

v

In Year 1 the process of submitting and approving grant applications was still in its infancy.

Submissions by employers were often incomplete and Fasset’s data capturing system was not yet fully

developed. Definitions of concepts and guidelines for the completion of grant application forms were

also not yet fully developed. The data that were available for analysis were therefore not always com-

plete and consistent. Nevertheless, the analysis of the four sets of grant application forms proved to

be useful in a number of ways. First of all, it provided a baseline measure of organisations’ participa-

tion in and compliance with the four grant schemes established under the Skills Development and Skills

Development Levies Acts. Second, it served to highlight data problems and inconsistencies in the way

in which employers interpreted the grant application forms and guidelines and in the way in which they

presented information. Third, the research process also uncovered problems in Fasset’s own data sys-

tems. Some of these might have been resolved in subsequent years, but others might still need atten-

tion. As employers’ compliance with the system and Fasset’s own data systems improve over time, the

usefulness of the grant applications will improve and eventually they will form a time series that can be

used to monitor changes in the sector’s profile and achievements in human resources development.

1

1 INTRODUCTION

1.1 BACKGROUND The Finance, Accounting, Management Consulting and other Financial Services SETA (Fasset) is one of

25 Sector Education and Training Authorities (SETAs) established in terms of the Skills Development

Act 97 of 1998.

According to the Skills Development Act, the functions and duties of SETAs are to

• develop a sector skills plan within the framework of the National Skills Development Strategy;

• implement the sector skills plan;

• design, register, manage and promote learnerships;

• perform ETQA functions through SAQA;

• disburse levies collected from employers and pay grants according to sectoral priorities;

• liaise with the National Skills Authority that advises the Minister of Labour on the National Skills

Development Policy and Strategy, the implementation of the Strategy and the allocation of

subsidies from the National Skills Fund; and

• liaise with the employment services of the Department of Labour.

Fasset, and all other SETAs, rely extensively on the co-operation of the workplaces registered with it in

order to fulfil its functions and to give effect to the National Skills Development Strategy. The most

important mechanisms for interaction between registered workplaces and the SETA are the annual

grant applications submitted to the SETA by employers. In the 2000/2001 financial year (Year 1) em-

ployers paid a Skills Development Levy (SDL) of 0,5 % of payroll. A portion of this levy could be

claimed back through the following grants:

• Grant A: Registration of Skills Development Facilitators (SDFs). In terms of Grant A work-

places were required to appoint skills development facilitators whose role it is to promote skills

development in the workplace and to act as links between workplaces and the SETAs. In Year

1 workplaces could claim back 15% of the SDLs through the registration of their SDFs with

Fasset.

• Grant B: Workplace Skills Plans (WSPs). Workplace Skills Plans are documents that reflect the

human resources development needs of workplaces and the strategies put in place by employ-

ers to meet these needs. Ideally, these plans should be closely linked to the business strate-

gies of employers. Ten per cent of the SDL could be claimed back by submitting WSPs.

• Grant C: Workplace Skills Plan Implementation Grant (WSPIG). Application forms for this

grant are submitted in report format, also known as the Annual Training Reports (ATRs), and

are meant to reflect the actual training that has taken place in each workplace. The reports

should also explain any deviations from the original WSPs, if such deviations occurred. In Year

1 20 % of the SDL was paid back to an employer on submission of this report.

• Grant D: Strategic Cash Grant. This grant allowed for 5% of the SDL to be paid back if em-

ployers fulfilled any one of the following criteria:

o membership of and participation in Fasset working committees and structures;

2

o assistance in Fasset activities;

o submission of Employment Equity reports

o provide additional information relevant to the Sector Skills Plan (SSP).

On an aggregate level, the grant application forms are important sources of information that can be

analysed in order to assist the SETAs in understanding the human resources profiles and development

needs of their sectors, in the development of sector skills plans, and in the setting of priorities for hu-

man resources development in the sectors. The forms also provide baseline information from which

the effectiveness of Fasset’s interventions, for example the appointment of skills advisors and work-

shops, can be evaluated. It was with these functions in mind that Fasset requested Independent Re-

search Services (IRS) to analyse the grant application forms submitted in Year 1.

As the Skills Development Strategy and its associated structures, systems and procedures were

still in their infancy, Fasset was in Year 1 obliged to be lenient in the application of requirements. It is

therefore still in a process of finalising some of the grant applications for Year 1. The analysis pre-

sented in this report deals with grant applications that were finalised and identified as such in the Fas-

set electronic data system by October 2002. Those that were still pending at that time are excluded

and it is therefore possible that the figures may change slightly over time.

It should also be borne in mind that the data systems of SETAs are “live” systems that are

constantly updated. Information therefore differs from day to day. For example, the number of SDFs

registered with a SETA may change constantly as new organisations register with the SETA, inter-SETA

transfers occur, and companies de-register. SDFs also change as people change functions within their

organisations and as they move between organisations. An analysis such as this, provides at best only

a snapshot in time.

Furthermore, it must be noted that in Year 1 all the SETAs aimed at drawing as many organi-

sations as possible into the system. The focus was therefore on encouraging organisations to submit

grant applications rather than ensuring that information was complete and a hundred per cent accu-

rate. For this reason it is most probable that Fasset approved incomplete grant applications. Further-

more, at the time when most of the Year 1 grant applications were approved, Fasset did not have a

complete administrative system in place for capturing and storing the data. The incompleteness of the

data limits the value of the value of this analysis to some extent.

1.2 OUTLINE OF THIS REPORT In the next section an overview is given of the grant applications that were approved in Year 1. Sec-

tions three to six deal with Grants A, B, C and D respectively while some conclusions are drawn in Sec-

tion seven.

3

2 OVERVIEW OF GRANT PAYMENTS

2.1 TOTAL AMOUNTS EXPENDED In the year ending 31 March 2001 the Skills Levies collected by the South African Revenue Service

(SARS) from organisations that belonged to Fasset amounted to R42,1 million. R8,7 million (20 %) of

this money was paid into the National Skills Fund while Fasset received a nett levy income of

R33,3 million. By the end of that financial year Fasset had expended R9,6 million on the payment of

grants1. Another R0,2 million was paid in respect of Year 1 grants after the end of the financial year.

Thus, a total of R9,8 million (23 % of the total levy income and 45 % of the amount available for

grants) was paid back to organisations that had contributed to the Skills Levy. Of the total levy income

15 % was available for Grant A, 10 % for Grant B, 20 % for Grant C, and 5 % for Grant D. A total of

R 3,5 million or 53 % of the amount available was paid in respect of Grant A. The corresponding fig-

ures for Grant B was R2,2 million (50 %) for Grant C it was R3,4 million (39 %) and for Grant D if was

R0,7 million (32 %). (See Figure 1.)

Figure 1 Distribution of total levy income

TOTAL LEVY INCOME R 42,1m

NSF 20 %

R 8,7m

Fasset 80 %

R 33.3m

Set-up Fund 10 %

R 3,8m

Admin Fund 20 %

R 7,7m

Grant disbursement Fund 50 %

R 21,9m

Amounts available for grants

Grant A 15 %

R 6,6 m

Grant B 10 %

R 4.4 m

Grant C 20 %

R 8,8m

Grant D 5 %

R 2,2m

Actual amounts paid in respect of grants

(Percentage of grant available)

R 3,5m (53 %)

R 2,2m (50 %)

R 3,4m (39 %)

R 0,7m (32 %)

Total grant disbursements: R 9,8m (45 % of total grants available)

The distribution of the R9,8 million among the four grants is shown in Figure 2. R3,5 million or

35 % of the total amount was paid in respect of Grant A, i.e. for the registration of SDFs. A total of

1 Fasset Annual Report for the Year ending 31 March 2001.

4

R2,2 million (23 %) was paid for the submission of WSPs (Grant B), R3,4 million (35 %) for the im-

plementation of WSPs (Grant C) and R0,7 million was paid out of the Strategic Cash Grant (Grant D).

Figure 2 Distribution of grant payments

2.2 GRANTS PAID The numbers of organisations that submitted applications and received payment for the various grants

differ markedly. As can be seen from Figure 3 the total number of organisations that received pay-

ment for Grant A was 443. The number that received payment for the submission of WSPs (Grant B)

dropped to 324 and those that were successful in Grant C and Grant D applications were even lower,

at 165 each.

Figure 3 Number of organisations that received grant payments

Grant C R 3,374,635

35%

Grant D R 692,857

7%

Grant A R 3,504,596

35%

Grant BR 2,206,256

23%

0

50

100

150

200

250

300

350

400

450

Number 443 324 165 165

Grant A Grant B Grant C Grant D

5

3 GRANT A: SKILLS DEVELOPMENT FACILITATORS

3.1 REGISTRATION OF SKILLS DEVELOPMENT FACILITATORS The registration of SDFs occurs in different configurations. Some organisations select one person in

the organisation to act as an SDF for that organisation only. Other organisations change their SDFs

from time to time and would therefore register more than one SDF in a particular time period. Another

possibility is that people register different companies for administrative and/or tax purposes but in re-

ality those companies function as one entity or workplace. In these cases it makes sense for one SDF

to represent the group of companies. For smaller companies it is often more efficient to use the ser-

vices of a specialised consultant in the human resources field as SDF. In such instances a single SDF

acts on behalf of a number of workplaces.

These different configurations create the need to analyse the SDF profile from different per-

spectives. However, Grant A is paid on the basis of a separate grant application submitted for a par-

ticular workplace as represented by an SDL number, irrespective of the number of SDFs appointed by

that organisation or whether or not it shares an SDF with other organisations.

At the time of writing this report the Fasset electronic system contained the details of 503

workplaces that had registered SDFs in Year 1. The total number of individual SDFs registered in the

system was 383. Of these, 328 were unique to a particular workplace while 55 represented more than

one organisation. A total of 32 workplaces had appointed more than one SDF in the time period.

3.2 PAYMENT OF GRANT A Not all of the organisations that registered SDFs had paid skills levies and were eligible for payment

under Grant A. According to Fasset’s financial system 443 organisations had received payment in rela-

tion to Grant A. As was indicated earlier, this amounted to a total grant payment of R3,5 million. The

individual amounts received by workplaces varied according to the levy amounts paid. The largest

amount received by a single workplace was R 397 000. The smallest amount paid out was as a little

as R2,81.

Table 1 Distribution of Grant A payments according to

grant size

Table 1 shows the distribution of

grants according to the size of

the payments made to organisa-

tions. As many as 50 organisa-

tions (11 %) received less than

R100. Thirty-six percent received

less than R500. Only 35 organi-

sations (7 %) received R20 000

or more. The table also shows

Organisations Grant size category N % Amount %

R1 - R99 50 11 R 2,694 0 R100 - R499 111 25 R 33,307 1 R500 - R999 72 16 R 51,024 1 R1 000 - R1 999 65 15 R 91,380 3 R2 000 - R4 999 57 13 R 174,450 5 R5 000 - R19 999 53 12 R 537,212 15 R20 000 - R199 999 33 7 R 2,009,523 57 R200 000 + 2 0 R 605,005 17 Total 443 100 R 3,504,596 100

6

that the smallest 62 % consumed 2 % of the total amount expended in respect of Grant A while 74 %

of the total amount was paid to the largest 7 % of grants.

The distribution of Grant A payments across the different sub-sectors can be seen in Table 2.

More than half (56 %) of the organisations who were successful in their registration of SDFs were from

the Accounting, Bookkeeping, Auditing and Tax Services Sub-sector. Organisations in this sub-sector

received 36 % of this grant.

Table 2 Distribution of Grant A payments according to sub-sector

Organisations

Sub-sector N %

Amount %

Investment Entities and Trusts and Company Secretary Services 20 5 R 503,500 14 Stock Broking and Financial Markets 56 13 R 714,159 20 Development Organisations 5 1 R 108,333 3

Accounting, Bookkeeping, Auditing and Tax Services 248 56 R 1,266,513 36

Activities Auxiliary to Financial Intermediation 31 7 R 142,914 4

Business Management and Consulting Services 48 11 R 528,903 15 Sub-sector unknown 35 8 R 240,274 7 Total 443 100 R 3,504,596 100

3.3 PROFILE OF SKILLS DEVELOPMENT FACILITATORS The SDFs act as links between the SETAs and individual workplaces. It is therefore important for Fas-

set to have some understanding of the biographical profile of the SDFs. This profile is based on the

information provided by the individuals who registered in Year 1 (i.e. 383 SDFs). Only a few variables

were asked in the grant application forms: namely, age, gender, highest qualification and current oc-

cupation. SDFs were also asked to indicate the nature and duration of their experience in this role (or

presumably a similar role as this was the first year of registration of SDFs.)

3.3.1 Age profile of SDFs Only 119 (31 %) of the SDFs disclosed their ages on the grant application forms. The average age

was 40 and, as can be seen in Figure 4, ages were fairly evenly spread across four broad age catego-

ries.

7

Figure 4 Age profile of SDFs*

*Age not available = 264

3.3.2 Gender Figure 5

Gender profile of SDFs*

Only 335 (87 %) of the SDFs indicated

whether they were men or women. Of those

who did disclose this information in the grant

application forms 60 % were men and 40 %

were women.

*Gender not available = 48

0

5

10

15

2 0

2 5

3 0

3 5

4 0

N 2 7 3 2 3 7 2 3

Y o u n g e r t h a n

2 93 0 - 3 9 4 0 - 4 9 5 0 a n d o l d e r

Male60%

Female40%

8

3.3.3 Highest qualifications Of the SDFs who registered with Fasset in Year 1 308 (80 %) indicated their highest qualifications.

The group consisted mainly of professionally qualified people 83 % of whom had university degrees.

As many as 60 % had post-graduate qualifications. (See Figure 6.)

Figure 6 Highest qualifications of SDFs

3.3.4 Provincial distribution of SDFs

Table 3 Provincial distribution of SDFs

The provinces in which SDFs live were inferred from their addresses

and telephone numbers. More than half of them (52 %) lived in

Gauteng. This was followed by the Western Cape (20 %) and

KwaZulu-Natal (15 %). The numbers of SDFs residing in the other

provinces were relatively small. This distribution closely resembles

the distribution of workplaces registered with Fasset. (See Table 3.)

3.3.5 Occupations of SDFs Of the SDFs who indicated their occupations 43 % were managers,

48 % were professionals and 7 % were working in administrative or clerical positions. As can be ex-

pected, a relatively large proportion of the managers were in the human resources field. The largest

proportion of professionals comprised accountants or auditors.

Province N % Gauteng 195 52 Western Cape 76 20 KwaZulu-Natal 55 15 Eastern Cape 21 6 Free State 13 3 Limpopo 8 2 Mpumalanga 4 1 Northern Cape 4 1 North West 2 1 Total 378 100

0

20

40

60

80

100

120

140

160

N 2 28 21 74 150 28 5

Lower than Grade 12/St

10

Grade 12/St 10

Grade 12/St 10 + diploma

First Bachelors

Degree

Honours Degree

(including

Masters Degree

Doctoral Degree

1%

9% 7%

24%

49%

9%

2%

9

Table 4 Occupations of SDFs

Occupation N % Managers

Financial Manager 9 3

Human Resources/Training Manager/Director 60 18

Executive Director/Director/Partner 44 13

Operations Manager 3 1

Administrative Manager 14 4

Manager 14 4

Resource Centre Manager 1 0

Quality Assurance Manager 1 0

Project Manager 1 0

43 %

Professionals

Accountant/Auditor 98 30

Company Secretary 4 1

Business Development/Transformation Consultant 4 1

Consultant 28 9

Human Resources/Training Officer/Administrator/Co-ordinator 21 6

Training Officer 2 1

Psychologist 1 0

Compliance Officer 1 0

Publisher 1 0

48 %

Administrative and clerical workers

Office Administrator 5 2

Personal Assistant/Secretary 5 2

Skills Development Facilitator 5 2

Bookkeeper 3 1

Clerk 1 0

7 %

Total 326 100

3.3.6 Experience as skills development facilitators Of all the SDFs who registered in Year 1 only 54 % indicated whether they had any experience as skills

development facilitators. Although the concept of skills development facilitator has a very specific

meaning within the context of the Skills Development Act, most of the respondents who reacted to this

question interpreted the role more widely. Eleven percent described experience that can only be in-

terpreted as technical experience in the financial services field. Thus, for them, their technical experi-

ence served as preparation for their roles as skills development facilitators. The kind of experience

cited includes work as accountants or financial managers; completion of articles and work in related

fields, such as banking.

The rest of the respondents (43 %) described a vast number of activities related to the human

resources function in an organisation. The majority mentioned that they had been partners or manag-

ers responsible for human resources management and training, or specialised human resources man-

agers, human resources consultants or training managers. A few had been school teachers or lectur-

ers at tertiary institutions. A few of the respondents also mentioned that they were accredited as

10

training officers with the South African Institute of Chartered Accountants (SAICA) and the Public Ac-

countants and Auditors Board (PAAB). As Grant A applications were the first documents to be submit-

ted to Fasset it comes as no surprise that a relatively small number of respondents indicated that they

had attended workshops or training programmes to prepare them specifically for their formal roles as

skills development facilitators.

3.4 PROCESSES ESTABLISHED IN ORGANISATIONS The Grant A application forms shed some light on the organisational arrangements and processes that

were in place at the time these forms were submitted. The way in which SDFs were appointed can be

seen in Table 5. The majority were either self-appointed or appointed by the employer. In a few ex-

ceptional instances there was participation of employees in the appointment process.

Table 5 Methods through which SDFs were appointed

Method of appointment N % Appointment by employer 178 76.7 Self-appointed 46 19.8 Nominated by employer 3 1.3 Appointed by board of directors 2 0.9 Appointed by consensus of partners 1 0.4 Nominated by employees and appointed by employer 1 0.4 Nominated by employees and co-director 1 0.4 Total 232 100

Only 20 % of the workplaces indicated that they had established training committees at that stage.

11

4 GRANT B: WORKPLACE SKILLS PLANS

4.1 PAYMENT OF GRANT B

Table 6 Distribution of Grant B payments according

to grant size

At the time of writing this report a total

of 325 organisations had received

payment for the submission of a Work-

place Skills Plan for Year 1. The larg-

est amount paid out under this grant

was R265 000 while the smallest was a

mere R3,23. Eleven percent of the

organisations that were successful in

their applications for this grant received less than R100. Almost half of them (43 %) received less

than R500. (See Table 6.) Table 6 also shows that the smallest 43 % of grant applications were enti-

tled to 1 % of the R2,2 million paid out while the 25 largest companies (7 % of grantees) received 71

% of the Grant B moneys.

The distribution of Grant B payments according to sub-sector is depicted in Table 7. The larg-

est proportion of organisations (57 %) was from the Accounting, Bookkeeping, Auditing and Tax Ser-

vices Sub-sector. This was followed by Stock Broking and Financial Markets (13 %), Business Man-

agement and Consulting Services (11 %) and Activities Auxiliary to Financial Intermediation (8 %).

Organisations in the Accounting, Bookkeeping, Auditing and Tax Services Sub-sector received 37 % of

the total Grant, Stock Broking and Financial Markets received 20 % and Investment Entities and Trusts

and Company Secretary Services and Business Management and Consulting Services received 15 %

each.

Table 7 Distribution of Grant B payments according to sub-sector

Organisations Sub-sector N % Amount %

Investment Entities and Trusts and Company Secretary Services 15 5 R 326,521 15 Stock Broking and Financial Markets 42 13 R 444,635 20 Development Organisations 5 2 R 72,222 3 Accounting, Bookkeeping, Auditing and Tax Services 185 57 R 805,709 37 Activities Auxiliary to Financial Intermediation 26 8 R 92,722 4 Business Management and Consulting Services 36 11 R 329,765 15 Sub-sector unknown 16 5 R 134,682 6 Total 325 100 R 2,206,256 100

Grant size category N % Amount % R1 - R99 36 11 R 1,515 0 R100 - R499 104 32 R 28,858 1 R500 - R999 44 14 R 32,103 1 R1 000 - R1 999 43 13 R 60,616 3 R2 000 - R4 999 38 12 R 124,030 6 R5 000 - R19 999 35 11 R 384,350 17 R20 000 - R199 999 24 7 R 1,309,942 59 R200 000 + 1 0 R 264,843 12 Total 325 100 R 2,206,256 100

12

4.2 GEOGRAPHIC DISTRIBUTION OF EMPLOYERS22

The geographical distribution of employers who successfully submitted WSPs can be seen in Figure 7.

More than half (53 %) were based in Gauteng, 18 % in KwaZulu-Natal, 17 % in the Western Cape and

6 % in the Eastern Cape. Only a few employers were based in other provinces.

Figure 7 Geographic distribution of employers who received Grant B payments

4.3 HISTORY OF TRAINING ACTIVITIES In the WSPs for Year 1 employers were asked to indicate how many people in their employ had re-

ceived training in the previous year (1999/2000). Responses to this question were meant to serve as a

baseline measure of the amount of training that had taken place before the introduction of the SDL.

Employers were furthermore asked about the occupations, race and gender of the people who had

received training.

The total number reported to have been trained was 27 000. The number of people trained,

their occupations and the population groups to which they belong are shown in Figure 8. The figure

reflects to a large extent the employment profile of the organisations that submitted WSPs. The larg-

est occupational groups – and thus also the largest groups trained – were technicians and associated

professionals and clerks and administrative workers. These were followed by professionals and man-

agers. The sector employs very few semi-skilled and unskilled workers, hence the almost total ab-

sence of people in these occupational categories.

As the figure clearly illustrates, the sector is staffed mainly by whites. They were therefore

also the main beneficiaries of training. The African, coloured and Indian workers who received training

were mainly employed in non-managerial positions, as the managerial category is still largely white

dominated.

2 In Year 1 the WSP format did not require employers to indicate the geographical distribution of their branches or employees. Thus, if the WSP was submitted by a head office situated in Johannesburg, it was taken that the company is based in Gauteng.

0

10

20

30

40

50

60

% 6 3 53 18 2 0 1 1 17

Eastern C a p e

F r e e State

GautengKwaZulu-

Nata lM p u m a l a

ngaNorthern

C a p eL i m p o p o

North West

Western C a p e

13

Figure 8 Number of employees trained in 1999/2000 by occupation and population group

The gender composition of the people who received training also closely resembles the distribution of

men and women in the sector. Almost half (45 %) of the people who were trained were men and 55

% were women. In the managerial and professional groups the men outnumbered the women.

Among the clerical and administrative workers the situation was reversed.

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

Legislators, Senior Officials, Managers & OwnerManagers

Professionals

Technicians & Associated Professionals

Clerks & Administrative Workers

Service & Sales Workers

Skilled Agricultural & Fishery Workers

Skilled Workers, Craft & Related Trades

Plant & Machine Operators

Labourers & Elementary Occupations

African Coloured Indian White

14

Figure 9 Gender of employees trained in 1999/2000

4.4 TRAINING PLANNED FOR 2000/2001 The main purpose of the WSP is to force employers to plan in advance for the training and develop-

ment of their employees and to report that plan to the SETA. Although the Grant B application form is

generally known as a “Workplace Skills Plan” it is not a plan in the true sense of the word. The as-

sumption is though that the information reflected in the grant application form should be based on a

training plan that in turn is linked to the business strategies of the particular organisation.

The core element of the WSP is the description of training planned for the following year. This

description consists of the identification of the strategic skills development priorities (which should be

in line with the business plan of the organisation), the nature of the learning interventions planned to

address the priorities, and a description of the beneficiaries of the planned training.

4.4.1 Strategic skills development priorities For organisations to plan their skills development initiatives effectively it is important for them to for-

mulate their skills development priorities at a conceptual level and in language with which they feel

comfortable. However, a relatively standardised way of conceptualising skills development priorities is

necessary in order for them to be analysable at an aggregate level. The WSPs of Year 1 contained

descriptions that ranged from very concise identifications of singular priorities to very vague descrip-

tions that could not be linked to any particular area of learning. One company would, for example,

0 2 0 0 0 4 0 0 0 6 0 0 0 8 0 0 0 1 0 0 0 0

L e g i s l a t o r s , S e n i o r O f f i c i a l s , M a n a g e r s &

O w n e r M a n a g e r s

P r o f e s s i o n a l s

T e c h n i c i a n s & A s s o c i a t e d P r o f e s s i o n a l s

C l e r k s & A d m i n i s t r a t i v e W o r k e r s

S e r v i c e & S a l e s W o r k e r s

S k i l l e d A g r i c u l t u r a l & F i s h e r y W o r k e r s

S k i l l e d W o r k e r s , C r a f t & R e l a t e d T r a d e s

P l a n t & M a c h i n e O p e r a t o r s

L a b o u r e r s & E l e m e n t a r y O c c u p a t i o n s

M a l e F e m a l e

15

state that its first priority was to improve the competency of its entire staff in the use of MS Word.

Another one would describe its top priority as “the continuous professional education of staff and the

continuous development of knowledge of new developments and trends in the relevant fields”. Some

of the priorities were specifically focused on human resources development, to improve the compe-

tency of staff in a particular area for example, while others were mere vague statements of organisa-

tional objectives such as: “to be an employer of choice by recruiting, deploying, developing and retain-

ing people needed to meet the growth requirements of the organisation” or

“to develop a break-away culture by being truly innovative”.

Many of the priority descriptions contained more than one area of skills development. Em-

ployers would state, for instance, that a particular priority was “Functional Skills, People Skills and Per-

sonal Effectiveness” or “Functional Competencies - Non Specialist Knowledge i.e. Computer Skills, In-

dustrial Relations Skills, Project Management, Financial Management, Business Product Knowledge,

Safety”.

Another way in which the data on skills development priorities varied is the occupational

groups that would be targeted. Some employers indicated that their skills development priorities were

aimed at particular occupational groups and used the nine broad categories in the Standard Occupa-

tional Classification (SOC) system to describe them (e.g. managers, professionals). Others referred to

groups of employees in their respective organisational structures, for example “All the staff in the Fi-

nance Division” or “frontline staff”. Many employers did not specify in their priority descriptions the

occupational group that would benefit from training in the priority areas.

These variations made an accurate quantification of skills development priorities impossible.

However, a less rigorous analysis revealed that the broad priority areas set out below occurred rela-

tively frequently:

• Management and leadership skills. Apart from general management and leadership skills

these also include:

o business management skills

o skills in mentorship and coaching

o performance management skills

o general supervisory skills

o skills in the handling of labour relations

• Risk management

• Basic financial skills such as:

o handling of statutory returns

o debtors

o creditors

o invoicing

o purchasing

• Specialised financial skills. These include:

16

o accounting and auditing skills

o company financial management skills

o project financial management skills

o tax consulting skills

o knowledge of financial markets and securities

o knowledge of financial products and investments

o skills in financial analysis

• Actuarial skills

• Computer literacy and computer skills including

o basic computer literacy

o proficiency in the utilisation of word processing programmes and spreadsheets

o proficiency in the utilisation of specialised accounting software

o proficiency in the utilisation of specialised auditing software

• Analytical and research skills including financial market analysis

• Marketing and sales skills and general customer care and customer service skills

• Communication skills including:

o business writing skills

o oral presentation skills

o negotiation skills

• Specialised information technology skills including:

o systems development and systems engineering

o internet development

• Personal development skills, for example:

o the ability to undertake lifelong learning

o time management skills

o “self-management” skills

o the ability to manage personal learning through the internet

o assertiveness training

o motivational training

4.4.2 Nature of planned training From the descriptions of the training planned by the various organisations, it is clear that almost every

possible method of skills development is utilised in the sector. Skills development strategies include

employer assistance for employees to undertake formal undergraduate and post-graduate education at

tertiary institutions, presentation of structured short courses, workshops, conferences and seminars,

online instruction through Internet-based courses, and on-the-job training and mentorship.

17

White65%

African19%

Coloured7%

Indian9%

4.4.3 Beneficiaries of training

Figure 10

Occupational distribution of beneficiaries of training

Together the organisations

that successfully submitted

WSPs planned to train 29 000

employees. Of these 14 %

would be senior officials,

managers or owner managers,

30% would be professionals,

22% technicians and

associated professionals and

30 % clerks and administrative

workers. Only a small

percentage would be in the

category of sales and service

workers. (See Figure 10.)

Figure 11 Racial composition of beneficiaries of training

As mentioned earlier, the

biographical details of the

beneficiaries of training are

mainly a function of the

composition of the staff

employed in the sector. It is for

this reason that most of the

beneficiaries of training are white

(65 %). Africans comprise 19 %

of the beneficiaries and coloureds

and Indians 7 % and 9 %

respectively.

L e g i s l a t o r s , S e n i o r

O f f i c i a l s ,

M a n a g e r s & O w n e r

M a n a g e r s

14 %

T e c h n i c i a n s &

A s s o c i a t e d P ro f e s s i o n a l s

22%

O t h e r0 %

S e r v i c e &

S a l e s W o r k e r s

4 %C l e r k s &

A d m i n i s t r a -t i v e W o r k e r s

30%

P ro f e s s i o

n a l s30%

18

According to the WSPs an equal number of men and women would receive training in the 2000/2001

financial year.

If the occupational profile of beneficiaries who would receive training in 2000/2001 is com-

pared to the profile of people who had received training in the previous year, it becomes clear that in

2000/2001 the emphasis would fall more on the training of professionals and that fewer technicians

and associated professionals would be trained. (See Figure 12.) In total the number of people to be

trained would increase by approximately 2000 (8 %).

Figure 12 Training planned for 2000/2001 compared to training received in 1999/2000

4.5 VACANCIES A standard question in all WSPs is whether employers have vacancies that they find hard to fill. Em-

ployers are also asked to indicate the occupational categories in which the vacancies occur, the num-

ber of vacancies, and the reason for the difficulties in filling them. The answers to this question give

an indication of skills shortages in the sector and areas that require special attention when it comes to

skills development.

The occupations in which vacancies existed at the time Year-1 Grant B applications were sub-

mitted are indicated in Table 8. The employers who reacted to this question identified a total of 438

vacancies. The largest number of vacancies occurred in the occupational category of technicians and

0 2000 4000 6000 8000 10000

Legislators, Senior Officials, Managers &Owner Managers

Professionals

Technicians & Associated Professionals

Clerks & Administrative Workers

Service & Sales Workers

Skilled Agricultural & Fishery Workers

Skilled Workers, Craft & Related Trades

Plant & Machine Operators

Labourers & Elementary Occupations

Number of beneficiaries

1999/2000 2000/2001

19

associated professionals (174 vacancies). Within this group the greatest shortage was experienced in

respect of trainee accountants and auditors (155).

The second largest group of vacancies occurred among professionals (149). The specific oc-

cupational group highest on the list of shortages was accountants (31). This was followed by consult-

ants, tax consultants and financial advisors.

In the managerial group of occupations 70 vacancies were reported. It appears as if the larg-

est shortage was among audit managers and financial managers.

It is interesting to note that employers also experienced shortages of workers in the adminis-

trative and clerical category, albeit in smaller numbers than in the other occupational groups. In South

Africa there is an abundance of workers at the lower skills levels and it can thus be expected that em-

ployers should be able to fill vacancies at these levels quite easily. However, the reasons given by

employers for the existence of these vacancies over extensive periods of time mostly refer to a short-

age of people with specific experience.

Table 8 Vacancies that employers found hard to fill

Occupation Vacancies

MANAGERS 70 Audit Managers 17

Financial Managers 10 Managers (unspecified) 10

Sales and Marketing Managers 7 Risk Managers 5

Branch/Divisional Managers 4 Asset Managers 3

Tax Managers 2 Heads of Compliance 2

IT Managers 2

Research Managers 2 Legal Managers 1

Communications Managers 1 Fund Managers 1

Company Secretaries 1 Fraud Product Managers 1

Project Managers 1

PROFESSIONALS 149 Accountants 31 Consultants (unspecified) 18

Tax Consultants 14 Financial Market Analysts 13

Financial Advisors 12 Corporate Finance Consultants 10

Strategists 6

Investment Professionals 6 Actuarial Consultants 5

Research Analysts 5 Risk Management Consultants 4

IT Specialists 3

Occupation Vacancies Corporate Financiers 3

Portfolio Managers 3 Forensic Investigators 3

Legal Advisors 2 Sales Professionals 2

Pensions Consultants 2 Health Care Consultants 2

Insolvency and Liquidation Profession-als

2

Internal Auditors 1

Financial Information Specialists 1 Business Analysts 1

TECHNICIANS AND ASSOCIATED PROFESSIONALS

174

Trainee Accountants/Auditors 155 IT Technicians 9

Trainee Analysts 6

Knowledge/information Managers 3 Actuarial Assistants 1

ADMINISTRATIVE WORKERS AND CLERKS

45

Bookkeepers/Accounting Clerks 22 Call Centre Operators 10

HR Administrators 3 Clerks (unspecified) 4

Personal Assistants/Administrators 4 Financial Controllers 2

TOTAL 438

20

The reasons for the skills shortages are very similar for the various occupational groups. The reason

most frequently cited was a shortage in the market of black people with qualifications in the relevant

fields. Employers indicated that they experienced difficulties in meeting their employment equity tar-

gets.

A second reason given was a shortage in the market of people with the specialised knowledge

and experience required for certain occupations. Some employers referred specifically to the globalisa-

tion of the market for highly skilled professionals and managers and remarked that South African em-

ployers could not compete internationally for these skills.

Employers also referred to the fact that in certain professional and managerial positions they

were looking for particular combinations of skills that were hard to find. These included combinations

of professional skills that were not necessarily taught in one particular profession, combinations of

technical expertise and so-called “soft skills”, as well as combinations of technical and managerial

skills.

A few employers referred to a problem that is experienced in all sectors: namely, that organi-

sations that are situated in rural areas find it more difficult to attract skilled staff than those in urban or

metropolitan areas.

5 GRANT C: ANNUAL TRAINING REPORTS

5.1 PAYMENT OF GRANT C Table 9

ATRs as % of WSPs In Year 1 only 165 organisa-

tions or 51 % of those or-

ganisations that submitted

WSPs received payment for

Grant C on the basis of their

Annual Training Reports.

The drop-out rate was thus

49 % - even though the

Grant C payment was 20 % of the levy paid by employers as opposed to the 10 % of Grant B. Table 9

clearly illustrates the negative relationship between the size of the Grant B payment and the participa-

tion of companies in submitting applications for Grant C. Only 22 % of the companies that received

less than R100 for Grant B submitted ATRs. This increased to 45 % of those that received between

R100 and R499 and eventually to 74 % and 71 % respectively of those that received between R5 000

and R19 999 and R20 000 and R199 999.

The grant payments varied between R12,00 and R529 000. The number of grants and total

amounts paid in each size category is reflected in Table 10. Owing to the large drop-out of small com-

panies there were only five organisations that received less than R100, only 27 that received between

R100 and R499, and only 23 that received between R500 and R999. The amounts paid in respect of

Size Category Grant B WSPs approved

ATRs approved

ATRs as % of WSPs

R1 - R99 36 8 22 R100 - R499 104 47 45 R500 - R999 44 19 43 R1 000 - R1 999 43 24 56 R2 000 - R4 999 38 23 61 R5 000 - R19 999 35 26 74 R20 000 - R199 999 24 17 71 R200 000 + 1 1 100

21

these small grants were less than 1 % of Grant C, while the 32 largest companies got 87 % of the

grant.

Table 10 Distribution of Grant C payments according to grant size

Grant size category N % Amount % R1 - R99 5 3 R 271 0 R100 - R499 27 16 R 9,019 0 R500 - R999 23 14 R 16,241 0 R1,000 - R1,999 19 12 R 29,802 1 R2,000 - R4,999 32 19 R 101,792 3 R5,000 - R19,999 27 16 R 280,884 8 R20,000 - R199,999 29 18 R 1,904,157 56 R200,000 + 3 2 R 1,032,470 31 Total 165 100 R 3,374,635 100

The participation of organisations from the different sub-sectors can be seen in Table 11. The table

also shows the amounts paid in respect of each sub-sector and the percentage distribution of organisa-

tions and amounts. As with the other grants, most of the organisations that received payment under

Grant C (58 %) were Accounting, Bookkeeping, Auditing and Tax Service organisations. Organisations

in this sub-sector received R1,4 million or 42 % of the total amount paid out.

Table 11 Distribution of Grant C payments according to sub-sector

Organisations

Sub-sector N %

Amount %

Investment Entities and Trusts and Company Secretary Services 11 7 R 639,334 19 Stock Broking and Financial Markets 20 12 R 451,443 13 Development Organisations 3 2 R 131,765 4 Accounting, Bookkeeping, Auditing and Tax Services 96 58 R 1,431,464 42 Activities Auxiliary to Financial Intermediation 10 6 R 113,996 3 Business Management and Consulting Services 17 10 R 406,687 12 Sub-sector unknown 8 5 R 199,947 6 Total 165 100 R 3,374,635 100

5.2 TOTAL EMPLOYMENT The ATR was the first of the Year 1 grant application forms that requested the employment profiles of

the applicants. This information is very important because it provides baseline information against

which the number of beneficiaries of training can be measured. The employment profiles provide in-

formation regarding the occupational category, race, and gender of employees represented by the or-

ganisations that successfully applied for the grant.

The 165 Grant C applications represented 22 838 employees. The profile of the workforce that

is included in this number is shown in Figure 13 and in Table 12. Managers and owner managers con-

stituted 16 % of the total group while professionals, technicians and associated professionals and

22

clerks and administrative workers comprised 26 % each. Service and sales workers made up 4 % of

the workforce and labourers and people working in elementary occupations 1 %.

Most of the workers in the sector were white (61 %), while 21 % were African, 8 % were col-

oured and 10 % were Indian. Men and women were equal in numbers (50 % each).

Earlier in the report the comment was made that the fact that most of the people who re-

ceived training, or would have received training according to the WSPs, were white was the result of

the racial composition of the sector. The profile of employees supports this observation. It also shows

that white workers are predominant in all occupational categories, except for service and sales workers

and labourers and elementary occupations.

Figure 13 Occupation and racial profile of employees as at 31/03/2001

0 1000 2000 3000 4000 5000 6000

Legislators, Senior Officials, Managers & OwnerManagers

Professionals

Technicians & Associated Professionals

Clerks & Administrative Workers

Service & Sales Workers

Skilled Agricultural & Fishery Workers

Skilled Workers, Craft & Related Trades

Plant & Machine Operators

Labourers & Elementary Occupations

Number of employees

African Coloured Indian White

23

Table 12 Profile of employees as at 31/03/2001

African Coloured Indian White Total M F T M F T M F T M F T M F T

N 190 67 257 58 34 92 171 71 242 2 290 817 3 107 2 709 989 3698 Legislators, Senior Officials, Managers & Owner Managers % 0.8 0.3 1.1 0.3 0.1 0.4 0.7 0.3 1.1 10.0 3.6 13.6 11.9 4.3 16.2

N 634 451 1 085 153 136 289 331 252 583 2 455 15 82 4037 3 573 2 421 5994 Professionals % 2.8 2.0 4.8 0.7 0.6 1.3 1.4 1.1 2.6 10.7 6.9 17.7 15.6 10.6 26.2

N 514 390 904 204 217 421 334 345 679 2 010 1 861 3 871 3 062 2 813 5875 Technicians &

Associated Professionals % 2.3 1.7 4.0 0.9 1.0 1.8 1.5 1.5 3.0 8.8 8.1 16.9 13.4 12.3 25.7

N 527 918 1 445 209 685 894 164 680 844 397 2 349 2 746 1 297 4 632 5929 Clerks & Administrative Workers % 2.3 4.0 6.3 0.9 3.0 3.9 0.7 3.0 3.7 1.7 10.3 12.0 5.7 20.3 26.0

N 489 246 735 20 39 59 9 13 22 81 128 209 599 426 1025 Service & Sales Workers % 2.1 1.1 3.2 0.1 0.2 0.3 0.0 0.1 0.1 0.4 0.6 0.9 2.6 1.9 4.5

N 0 2 2 0 0 0 0 0 0 0 0 0 0 2 2 Skilled Agricultural &

Fishery Workers % 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N 8 0 8 3 0 3 7 0 7 5 0 5 23 0 23 Skilled Workers, Craft & Related Trades % 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1

N 55 3 58 1 0 1 4 0 4 0 5 5 60 8 68 Plant & Machine Operators % 0.2 0.0 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.0 0.3

N 99 87 186 21 8 29 4 0 4 0 5 5 124 100 224 Labourers &

Elementary Occupations % 0.4 0.4 0.8 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.4 1.0

N 2 516 2 164 4 680 669 1 119 1 788 1 024 1 361 2 385 7 238 6 747 13 986 11 447 11 391 22 839 Total % 11.0 9.5 20.5 2.9 4.9 7.8 4.5 6.0 10.4 31.7 29.5 61.2 50.1 49.9 100.0

24

5.3 PEOPLE WHO RECEIVED TRAINING IN YEAR 1 In the ATR employers were asked to indicate the number of people in each occupational group that

received training in Year 1. They were furthermore required to break these figures down in terms of

race and gender. The total number of people reported in this section of the ATR by far exceeds total

employment reported by the group of organisations. It therefore seems as if some of the organisa-

tions that submitted Grant C applications interpreted the question in such a way that employees were

double counted. It is possible that they counted a person every time he or she received training in-

stead of reporting on the individuals who underwent a form of training – irrespective of the number of

courses attended.

5.4 TRAINING OUTCOMES Questions regarding training outcomes focused on the number of employees in each occupational

category who were supposed to be trained according to the WSPs and those who were actually

trained3. Organisations reported positive as well as negative deviations from the planned training.

Table 13 below shows the number of organisations that reported positive deviations in the respective

occupational categories, the numbers of employees affected, and the magnitude of the deviations.

A total of 48 organisations or workplaces indicated that they trained more people in the first

occupational category than planned. Together they planned to train 1 057 people and in reality 1978

received training. The result was a positive deviation of 921. As could be expected the largest devia-

tions occurred in the first four occupational categories, i.e. those occupations in which employment in

the sector are concentrated.

Table 13 Positive deviations from the WSPs

Number of Workplaces

Number of People

Planned

Number of People Trained

Deviation

Legislators, Senior Officials, Managers & Owner Managers

48 1 057 1 978 921

Professionals 51 5 821 7 862 2 041 Technicians & Associated Professionals 50 3 435 7 875 4 440 Clerks & Administrative Workers 44 688 3 385 2 697 Service & Sales Workers 17 281 548 267 Skilled Agricultural & Fishery Workers Skilled Workers, Craft & Related Trades 3 0 9 9 Plant & Machine Operators 4 0 12 12 Labourers & Elementary Occupations 10 0 35 35

3 It must be noted that in this section the double counting of individuals was possible if one person attended more than one course in a particular priority area. The information presented here is thus not a completely accurate reflection of the number of people who benefited from training in the time period.

25

The reasons cited for positive deviations were not very informative. Most employers gave no explana-

tions. The few who did referred to “change in strategic plans”, inaccuracies in their original plans (i.e.

the WSPs) and changing organisational needs during the year.

Negative deviations also occurred. The number of organisations that reported that they

trained fewer people than they had anticipated when they submitted their WSPs can be seen in Table

14. A total of 34 organisations trained fewer managers than they had anticipated. The total number

of people in this occupational category who did not receive planned training was 804. Similarly 41 or-

ganisations trained fewer professionals than planned. The number of professionals affected was 730.

Although workers in all occupational categories were affected, the negative deviations were generally

smaller than the positive ones.

Table 14 Negative deviations from the WSPs

Number of Workplaces

Number of People

Planned

Number of People Trained

Deviation

Legislators, Senior Officials, Managers & Owner Managers 34 2 445 1 641 -804

Professionals 41 1 651 921 -730 Technicians & Associated Professionals 30 524 307 -217 Clerks & Administrative Workers 50 1 616 896 -720 Service & Sales Workers 12 152 27 -125 Skilled Agricultural & Fishery Workers 1 65 0 -65 Skilled Workers, Craft & Related Trades Plant & Machine Operators 4 27 1 -26 Labourers & Elementary Occupations 5 16 5 -11

Again very few employers provided reasons for negative deviations from their WSPs. Among those

who did, the two most common reasons given were the restructuring of the organisations and con-

comitant retrenchments or staff reductions, and time constraints or work overloads. Often the latter

was said to be an effect of the staff reduction. A few employers said that the resignation of staff af-

fected the number of people trained while one or two referred to the unavailability of suitable courses

or training providers.

The nett effect of the positive and negative deviations was that in all occupational categories

with the exception of two more people were trained than was originally planned. The exceptions are

skilled agricultural and fishery workers and plant and machine operators of whom only a few are em-

ployed in the sector. The largest deviation occurred in the training of technicians and associated pro-

fessionals. This is followed by a deviation in the training of clerks and administrative workers and pro-

fessionals. (See Figure 14.)

26

Figure 14 Nett deviation from WSPs

Obviously these deviations should be seen in relation to the employment within a particular category

and the numbers of people who would have been trained if the WSPs were to be perfectly imple-

mented. Therefore the percentage deviations are shown in Figure 15. Only the first five occupational

categories were included in this figure. The others were omitted because of the small numbers of

people employed in them. The difference in the number of technicians and associated professionals

was the largest. Twice as many as had been planned received training (a deviation of 101 %). For

managers this figure was 3 %, for professionals it was 17 %, for clerks and administrative workers

79 % and for service and sales workers 31 %.

-500 0 500 1000 1500 2000 2500 3000 3500 4000 4500

Legislators, Senior Officials, Managers & OwnerManagers

Professionals

Technicians & Associated Professionals

Clerks & Administrative Workers

Service & Sales Workers

Skilled Agricultural & Fishery Workers

Skilled Workers, Craft & Related Trades

Plant & Machine Operators

Labourers & Elementary Occupations

Number of employees trained

27

Figure 15 Percentage nett deviation from the WSPs

5.5 TRAINING SPEND The group of organisations that applied for Grant C reported that in aggregate they had spent ap-

proximately R120 million on training in the 2000/2001 financial year. This means that the total

amount paid out in terms of all the grants was only a fraction (approximately 7,5 %) of the total

amount spent on training by the few organisations that submitted ATRs.

Table 15 Training spend in Year 14

Total

In-Company Training*

External Training* Amount %

Legislators, Senior Officials, Managers & Owner Managers

R 5,006,158 R 9,050,158 R 14,056,316 12

Professionals R 9,540,167 R 70,275,332 R 79,815,499 67 Technicians & Associated Professionals R 13,149,097 R 7,570,473 R 20,719,570 17 Clerks & Administrative Workers R 1,552,682 R 2,730,072 R 4,282,754 4 Service & Sales Workers R 404,586 R 390,668 R 795,254 1 Skilled Agricultural & Fishery Workers R 6,000 R 0 R 6,000 0 Skilled Workers, Craft & Related Trades R 1,000 R 2,978 R 3,978 0 Plant & Machine Operators R 22,542 R 0 R 22,542 0 Labourers & Elementary Occupations R 19,273 R 27,195 R 46,468 0 Total R 29,701,505 R 90,046,876 R 119,748,381 100 % 25 75 100

4 *The grant application form didn’t provide a clear definition of in-company and external training. The distinctions between these two components of training are therefore not completely reliable.

0

2 0

4 0

6 0

8 0

100

120

% D e v i a t i o n 3 17 101 7 9 31

L e g i s l a t o r s ,

S e n i o r

O f f i c i a l s ,

P r o f e s s i o n a l s

T e c h n i c i a n s &

A s s o c i a t e d

P r o f e s s i o n a l s

C l e r k s &

A d m i n i s t r a t i v e

W o r k e r s

S e r v i c e &

S a l e s W o r k e r s

28

Most of the total amount (75 %) was spent on external training. If one considers the distribution of

the total amount across the occupational categories it is clear that the training of professionals con-

sumed the largest portions of training budgets (67 %). In contrast, only 12 % was spent on the train-

ing of managers, 17 % on the training of technicians and associated professionals and 4 % on the

training of clerks and administrative workers.

The average amount spent per capita is a measure of the relative cost of training in the differ-

ent occupational groups. These figures can be seen in Figure 16. According to the information given

by employers they spent on average approximately R9 000 on the training of each professional. This

is more than twice the amount spent on the training of managers and almost four times the amount

that it cost them to train a technician or associated professional.

Figure 16 Average per capita spending on training in Year 1

R 3,725

R 8,868

R 2,468

R 953

R 1,314

R 1,000

R 1,734

R 1,162

R 442

R 0 R 2,000 R 4,000 R 6,000 R 8,000 R 10,000

Legislators, Senior Officials, Managers & OwnerManagers

Professionals

Technicians & Associated Professionals

Clerks & Administrative Workers

Service & Sales Workers

Skilled Agricultural & Fishery Workers

Skilled Workers, Craft & Related Trades

Plant & Machine Operators

Labourers & Elementary Occupations

29

6 GRANT D: STRATEGIC CASH GRANT Grant D is essentially a discretionary grant, which means that the SETAs have some discretion in de-

ciding how it is utilised. The fact that it is a cash grant also means that the amounts paid are not nec-

essarily in proportion to the levies paid by the respective organisations. Thus, although the Depart-

ment of Labour stipulated that 5 % of the total levy goes into Grant D it is possible for a particular or-

ganisation to receive more than the 5 % that it contributed, while others may receive less than 5 %.

In Year 1 Fasset decided to pay Grant D in proportion to the levy amounts paid and to pay it

on the basis of any one of the following criteria:

• Submission by the organisation of an employment equity plan to the Department of Labour;

• Participation of the organisation (or its representatives) in one of the working committees of

Fasset;

• Participation of the organisation in any other activities organised by Fasset, for example train-

ing programmes or workshops or

• Provision of additional information that could be used for the SSP.

Table 16 Distribution of Grant D payments according to

grant size

A total of 164 grant payments were

made. The amounts varied between R10

and R132 000. The distribution of grant

payments across different size categories

can be seen in Table 16. As Year 1’s

discretionary grants were linked to the

levies paid by individual organisations,

the distribution pattern of Grant D was

very similar to that of the other grants. Twenty-four organisations received less than R100; 53 re-

ceived between R100 and R500; and 28 received between R500 and R1 000. Thus 64 % received less

than R1000. This amounted to 5 % of the total grant payment. The nine organisations that received

between R20 000 and R200 000 absorbed 60 % of the total grant.

The distribution of this grant among the sub-sectors is also very similar to the distribution of

the other grants, with the Accounting, Bookkeeping, Auditing and Tax Services Sub-sector comprising 57 % of

the organisations who successfully applied for this grant and receiving 35 % of the grant payment.

Grant size category N % Amount % R1 - R99 24 15 R 1,087 0 R100 - R499 53 32 R 12,584 2 R500 - R999 28 17 R 19,228 3 R1,000 - R1,999 18 11 R 24,607 4 R2,000 - R4,999 14 8 R 44,639 6 R5,000 - R19,999 19 12 R 175,497 25 R20,000 - R199,999 9 5 R 415,215 60 Total 165 100 R 692,857 100

30

Table 17 Distribution of Grant D payments according to grant size

Organisations

Sub-sector N %

Amount %

Investment Entities and Trusts and Company Secretary Services 11 7 R 158,118 23 Stock Broking and Financial Markets 18 11 R 118,416 17 Development Organisations 3 2 R 29,906 4 Accounting, Bookkeeping, Auditing and Tax Services 94 57 R 240,250 35 Activities Auxiliary to Financial Intermediation 9 5 R 26,773 4 Business Management and Consulting Services 16 10 R 110,402 16 Sub-sector unknown 14 8 R 8,992 1 Total 165 100 R 692,857 100

The majority of motivations presented in the grant applications fell within the criteria described

above. However, quite a number of them were very vague or simply described normal skills develop-

ment activities, or even simply compliance with the other grant application requirements (Grants A, B

and C). The impression is that Fasset was very lenient in the assessment of applications and accepted

almost any motivation probably in order to encourage participation in the process. With only a few

exceptions all the organisations indicated that they participated in Fasset’s activities. “Participation”

included the attendance of Fasset’s capacity-building workshops, roadshows and even the answering

of Fasset’s correspondence. Twenty-four percent of the grantees were members of Fasset’s working

groups and/or the Standards Generating Body (SGB) for the Financial Services Sector. Approximately

40 % claimed that they had submitted employment equity plans, while 15 % described their involve-

ment in special skills development projects such as teacher enrichment programmes, school sponsor-

ships and bursary programmes.

It was interesting to note that a few of the organisations in their grant applications used the

opportunity to complain about the high cost of compliance with the requirements of the grant applica-

tions. Clearly, organisations consciously weigh the cost of compliance against the benefits.

31

7 CONCLUSIONS The analysis of the four sets of grant application forms used in Year 1 proved to be useful in a number

of ways. First of all it provided a baseline measure of organisations’ participation in and compliance

with the four grant schemes established under the Skills Development and Skills Development Levies

Acts. Second, it served to highlight data problems and inconsistencies in the way in which employers

interpreted the grant application forms and guidelines and in the way in which they presented informa-

tion. Third, the research process also uncovered problems in Fasset’s own data systems. Some of

these might have been resolved in subsequent years, but others might still need attention.

7.1 PARTICIPATION OF ORGANISATIONS IN THE GRANT SYSTEM In Year 1 a relatively small proportion of the employers in the Financial Services Sector submitted

grant applications. The approximately 500 organisations that registered SDFs represent less than 7 %

of the organisations in the sector5. Applications for Grant B (WSPs) dropped to 324 or approximately

4,5 % of the organisations in the sector. Only 165 or just more than 2 % submitted ATRs and applied

for the discretionary cash grant (Grant D). The largest fallout occurred among small organisations that

clearly weighed the cost associated with the collation and submission of the information against the

amount that they would have received from the respective grants. The returns were particularly low in

Year 1 because the levy comprised only 0,5 % of payrolls and only 50 % of the amounts paid were

recoverable through the grant system. As levy payments increased to 1 % of payroll and larger pro-

portions were paid back in subsequent years employers might have become more motivated to submit

grant applications.

The low participation rates in Year 1 resulted in the payment of only R9,8 million in respect of

Year-1 grants, leaving a gross surplus (after 20 % was withheld for the NSF and operational costs

were covered) of R20,4 million6.

As most of the organisations in the Financial Services Sector are small, low participation rates

and/or irregular participation by small companies may remain a problem for Fasset. Fasset therefore

faces two challenges: the first is to retain communication with these organisations so as to stay

abreast of changes in the composition and profile of this component of the sector; and the second is to

find ways in which to utilise money from the skills levy to promote skills development in the small busi-

nesses.

7.2 GRANT APPLICATIONS AS SOURCES OF INFORMATION The analysis showed that the grant application forms are very valuable sources of information on com-

panies in the sector. Even in Year 1, when forms were not completed thoroughly, the information

gave a fair indication of the training activities and training priorities in the sector. As the grant system

5 This estimate is based on the findings of the HSRC study conducted for Fasset in which it was concluded that there are ap-proximately 7200 organisations that belong to the Financial Services Sector. See Van Zyl, E., Du Toit, R. & Fourie, K. Skills Development in the Financial, Accounting, Management Consulting and Other Financial Services Sector, Report submitted to Fasset, October 2002. 6 Fasset Annual Report for the year ending 31 March 2001.

32

develops and becomes entrenched in the thinking and activities of the sector and as more organisa-

tions participate by submitting grant applications, the information base available to Fasset will be

strengthened and will become more reliable. Hopefully, organisations will adapt and modify their own

information systems so that they can provide the required information to the SETA without having to

spend an inordinate amount of time and resources collecting it every time it is called for.

The quality of the Fasset information base hinges upon the accuracy with which information is

kept and provided by the organisations in the sector. This means inter alia that definitions and classi-

fication systems should be used in a standardised manner. The analysis of the grant applications for

Year 1 showed that there are three areas in particular where employers’ interpretations differ and

where these differences weaken the quality of the data. The first is the definition of the number of

people trained. It is important for the grant application forms to make it clear whether employers are

required to indicate how many people received some kind of training and not to double count them or

whether each person attending training should be counted every time they are trained. If the inten-

tion is the former an easy quality check would be to ensure that the number of people trained does

not exceed the total number of employees7.

The second area that needs standardisation is the interpretation and use of occupational

codes. In the data it was noted that, for example, some employers see accountants and auditors in

training as technicians and associated professionals while other employers classify them as clerks. It

also seems that in the descriptions of training activities the training of these people would be classified

under the training of professionals (probably because they will be professionals once their training is

completed).

The third component that needs a clearer definition and standardisation is the description of

skills development priorities. A clear distinction needs to be made between skills development priori-

ties and other organisational objectives that may be related to skills development but that are not the

same, such as changing the culture of the organisation. From an analysis point of view it will also be

useful if priorities are formulated in terms of a singular learning area instead of a combination of rela-

tively unrelated learning areas.

7.3 PROFILE OF THE SECTOR Although the number of organisations that submitted grant applications was relatively small the sample

was large enough to reveal some of the characteristics of the sector that are generally known and that

were confirmed by the HSRC sector study. The first is that the sector employs mainly highly skilled

people and that the occupational categories of professionals, technicians and associated professionals

and administrative workers and clerks are predominant in the sector. This means that generally the

lead time for the education and training of employees in the sector is relatively long and that the sec-

tor needs to be pro-active in the identification of and provision for skills needs.

7 A small positive deviation is obviously possible as people who have been trained may leave the organisation and new ones appointed in their place may also have received training. However, too large a deviation is likely to indicate that the data re-quirement was interpreted incorrectly.

33

The second characteristic is that the sector is lagging far behind in terms of recruitment of

black employees – especially in the managerial and professional categories. The third is that women

are well represented in the sector except in the managerial category where they are still outnumbered

by men. African, coloured and Indian women are moving into the sector at more or less the same

pace as their male counterparts.

Another characteristic of the sector that was also evident from the grant application forms is

the fact that the organisations are concentrated mainly in three of the provinces: namely, Gauteng,

KwaZulu-Natal and the Western Cape. This will probably simplify Fasset’s task of reaching out to and

setting up communication channels with its constituencies.

All the grant application forms reflected the large number of Accounting, Bookkeeping, Auditing

and Tax Service organisations in the sector. In all the grant applications they constituted more than half of the

applicants. These organisations are, however relatively small and claimed only between 35 % and 42 % of the

respective grants. Conversely, Investment Entities and Trusts comprised between 5 % and 7 % of the grant ap-

plicants but claimed between 14 % and 23 % of the levies.

7.4 ORGANISATIONS’ INVOLVEMENT IN TRAINING The report revealed that the organisations that submitted grant applications in Year 1 are very much

involved in the training of their staff. The amounts that they already spend on training by far exceed

the levies paid by them.

It was interesting to see how much the responding organisations reported to have spent on

the training of professionals. This was far more than the amounts spent in respect of any of the other

occupational groups. The per capita spending on professionals’ training was more than twice that of

the training of managers. From the data it was not clear what kinds of training attract such high costs.

One would rather expect a much larger spending on the training of technicians and associated profes-

sionals (i.e. professionals in training). It may be worthwhile monitoring this trend in future years and

investigating how employers interpret the question on training spend and how they classify and pre-

sent information in this regard.

Unfortunately it was not possible to see to what extent employers used training and to what

extent budgets were deliberately directed towards the alleviation of the shortage of qualified black

staff and specialised skills. This is an area that may be worth investigating. It is also an area that may

be worthy of special cash grants.

7.5 SKILLS NEEDS AND SKILLS SHORTAGES To assess the true extent and nature of skills shortages in a sector is no easy task. The vacancies that

employers find hard to fill are but one indicator of possible skills shortages. Such vacancies need to be

seen in relation to the total employment in the sector and in the specific occupational categories. The

vacancies that employers identified in the WSPs of Year 1 constitute not more than 2 % of total em-

ployment. This may be an indicator that the shortages are not huge and acute. However, if the posi-

tions that cannot be filled are of strategic importance in organisations or in the sector generally,

growth of the sector may be stifled by the absence of the specialised skills.

34

In conclusion: despite many shortcomings in the data from the grant applications for Year 1, the

analysis provided a baseline for the analysis and comparison of data in the years to follow. As compli-

ance and Fasset’s own data systems improve over time the usefulness of the grant applications will

improve and eventually they will form a time series that can be used to monitor changes in the sector’s

profile and achievements in human resources development.

35

APPENDIX A

GRANT A FORMAT

36

APPENDIX B

GRANT B FORMAT

37

38

39

APPENDIX C

GRANT C FORMAT

40

41

42

APPENDIX D

GRANT D FORMAT