National Skills Development Strategy 2015: Landscape and Recommendations

2. SETA Landscape Researchand how it relates toSkills Development Presented by Johan Erasmus

3. This Presentation The skills development system proposed by the DHET in the NSLP 2015 (Overview and Response) Global perspectives on skills development systems Skills development mechanisms and systems that the CHIETA has put in place Recommendations on critical elements of an education and training system Framework that CHIETA could use to position itself for even more efficient services

4. NSLP 2015 Overview (1) On 10 November 2015, the Minister of Higher Education and Training, published for public comment: TheProposal for the New National Skills Development Strategy (NSDS) and Sector Education and Training Authorities (SETAs) Landscape within the Context of an Integrated and Differentiated Post School Education and Training System (NSLP 2015). The NSLP 2015 sets out the vision for the "NSDS and SETAs within the context of an integrated and differentiated post school education and training system", and the changes proposed for the skills development institutional landscape and funding framework to achieve this vision. The NSLP 2015 gives effect to the intentions of the 'White Paper for Post-School Education and Training: Building an Expanded, Effective and Integrated Post-School System' (WP-PSET) released by the Minister of Higher Education and Training (MHET) in January 2014.

5. NSLP 2015 Overview (2) In the NSLP 2015, the DHET advocates for the integration of the skills development institutional landscape into the post-school system, and for the improved coordination of the skills levies in support of education and training programmes that prepare people for the world of work. Better coordination of skills levies is needed to address persisting problems experienced by SETAs in their day-to-day operations (e.g. such as the failure to meet annual targets and to disburse grants; governance challenges; and high administrative costs). To achieve PSET integration and improve SETA performance, the NSLP 2015 proposes that functions such as skills planning, funding and quality assurance be centrally located in well-resourced institutions that are established within and that are managed by the DHET.

6. NSLP 2015 Overview (3) In the NSLP 2015, the DHET sets out its plans to: • Establish several structures, including a Skills Planning Unit, a Shared Services Unit, Intermediate Bodies and Occupational Teams. • Appoint Directors (at least five) for cluster management and Occupational Team Managers. • Locate SETAs as ‘specialised service delivery units’ within DHET and rename them to Sector Education and Training Advisory Boards (SETABs). • Strengthen the role of Government Departments on SETAB Boards, and give them veto rights, to ensure that strategic priorities are addressed. • Combine skills development levies and voted funds for better alignment and complimentary appropriation for the achievement of centrally set national objectives and targets. • Use levy grants primarily to incentivise employers to provide quality-assured workplace-based learning opportunities leading to occupational qualifications or designations in demand signalled by sectoral or national prioritisation. • Structure funding in such a way as to support the successful progression of young learners from one stage to the next on the learning pathway (i.e. from school to work).

7. NSLP 2015 Response (1) SETAs will be given a more focused mandate in an attempt to improve their contribution to understanding skills needs and supply of required skills. The challenge with the proposed new role of SETAs is the impact they will have on skills development in their specific sector due to a much stronger focus on implementing National identified priorities and an insistence on promoting and supporting public training institutions. The NSLP 2015 seems to want to change the use of the Skills Levy Funds from promoting sector specific skills needs to addressing the poor quality of school education in South Africa. The relatively low numbers of learners who exit the system with maths and science have a ripple effect on the throughput rates in the post school education system. Unfortunately the DHET does not refer to or consider the fact that schooling, as the crucial first link in the learning pathway, is an area in the education and training landscape in which South Africa fails dismally.

8. NSLP 2015 Response (2) Another failure in the learning pathway in South Africa is the inability of the Technical and Vocational Education and Training (TVET) college sector to provide the critical ‘intermediate’-level skills needed in the economy. It seems as if the DHET expects of employers – and the skills development agencies that represent employers – to cure the ills of the South African basic and further education and training system. The shift away from a sector-specific focus to a national focus may lead to increased employer frustration caused by the new recruits with a national occupation qualification that still have to be introduced to sector specific skills requirements. The level and nature of skills required by employers varies between sector and from firm to firm depending on the value which each sector (and individual employer within that sector) places on skills and training – a sector focus (with national co-ordination) would have addressed this international recognised imperative to ensuring a responsive economy.

9. NSLP 2015 Response (3) The DHET desires for the SETAs to “remain as close to their constituent workplaces as possible”. However, to the contrary, plans to establish and manage several layers of bureaucracy between skills development beneficiaries and service provision. This will widen the distance between the management of a SETA and the companies and workers it serves; as well as between the post-school education and training system and the world of work. The “New SETA Landscape” research project sought to understand the roles and functions that will be ascribed to SETAs and to suggest a way of addressing the shortcomings highlighted in the WP-PSET and embodied in the NSLP 2015, whilst still maintaining a sector focus. Global perspectives on skills development hold the key to balancing the national and sectorial focus in skills development.

10. Global Perspectives on Skills Development Systems A review of international perspectives on skills development revealed the following important considerations: • Education and training policy interventions should be designed according a life-cycle perspective of building, maintaining and improving skills. Acquiring foundation skills in literacy and numeracy, as well as “learning to learn”, are absolutely essential for acquiring further skills and competencies:1 • Governmentshave primary responsibility for education, pre-employment training, core skills, and training the unemployed and people with special needs. • The social partners play a significant role in further training, workplace learning and on-the-job training. • The foundations for advanced skills need to be laid at an early age – writing, reading, maths and science are the core subjects on which learning should be built. A low literacy rate signals an education system that is not preparing society as a whole for further learning and productive work.2 • Employers do not see it as their role to compensate for failures in the state education system by providing basic education to raw recruits who lack an understanding of workplace mores and expectations.3

11. Global Perspectives (2) • Workplace-based learning programmes are extremely demanding for all three of the stakeholders directly involved in workplace-based learning, namely: students/learners; education and training institutions; and employers alike.4 5 6 7 • Training which meets business needs is often delivered outside formal qualification systems. A great deal of hard-to-quantify training and development takes place on the job and through programmes of mentoring and shadowing.2 • Contradictory to the proposal to locate SETAs within the DHET, international sources on skills development systems are calling for “employer-led partnerships” that are “independent of Government” and that are taking “leadership” and having “greater control” of the education and training system and over“ resource allocation” for skills development interventions.2 8 9 10 • Most national skills policies address the supply side but ignore problems related to deficiencies in the underlying levels of demand for skill within the economy, and also the issue of how effectively skills are deployed within the workplace.8 11

12. Global Perspectives (3) • Failing to engage employers result in an over-reliance on centralised, state-led programmes and institutions to fill the gap.11 • The demand for skills is not static and is driven by employers’ needs and preferences.8 • The world of work is dominated by the practical demands of production processes, deadlines and workplace organisation.1 • Company-specific qualifications are often demanded as an entry ticket to jobs and work readiness.3 • The most appropriate solution for each business need may very often not be aligned with government policy targets for the number of people trained with full qualifications.8 • Those sector skills agencies with the deepest reach within their sector are committed to working with employers to address issues which employers have said are of greatest concern to them.8

13. Global Perspectives (4) • Adequately funded training institutions are essential to skills development strategies and policies.1South Africa spend the second lowest amount per student from primary to tertiary education (out of 37 countries for which data is available).12 • Business needs and standards must be centre stage in order for skills development systems to succeed. For example, the UK government has taken steps to lay the foundations for a more demand-led system, surrendering greater control of resource allocation to business.2 • Independent skills development structures encourage industry involvement and participation in the arrangements.9 • Those sector skills agencies that fail, have been seen as promoting government skills policies or trying to justify their own reason for existence rather than dealing with issues of greatest concern to the sector.8

14. Global Perspectives (5) Specific observations with regard to SMMEs include the following: • Small and medium-sized enterprises (SMEs) are likely to create about 90% of the jobs envisioned in the National Development Plan by 2030. • Many small and medium-sized enterprises are so busy with their core business that they do not have the time or inclination to engage in discussions about workplace skills needs.8 • Small businesses make up the bulk of employer firms yet there are constraints on the ability of such organisations to engage in WIL.7 • Small businesses experience ‘administration time’ as a much greater barrier to WIL participation than medium and large businesses.7 • Small organisations in existence for a limited number of years:7 • Has limited capacity and capability to participate in WIL. • Struggle to manage the quality of the WIL experience.

15. Global Perspectives (6) Specific observations with regard to SMMEs include the following: • A mix of larger employers and small and medium sized enterprise (SMEs) where technological advancement and innovation play an important role in enabling companies to increase productivity levels and compete internationally contributes to the success of Sector Skills Councils.8 • Small and medium-sized enterprises (SMEs) normally do not have in-house training professionals.1 • Specific and targeted policies are required to assist small enterprises in investing in the skills required.1 • Cooperative solutions, including the pooling of information and support mechanisms, offer a good approach to skills development for small enterprises.1

16. CHIETA Practices to Identify and Address the Skills Needs of the Sector Investigation into the way CHIETA has managed skills development resonates some of the international best practice trends. Since its inception, the CHIETA has developed many interventions and mechanisms to identify and address the skills needs of the Chemical Industries Sector and to overcome skills shortages in the economy. Examples of interventions to determine the skills needs of employers include the following: • The CHIETA prides itself on its model to plan for current and future skills needs in partnership with all relevant stakeholders including industry, organised labour, government departments, relevant professional bodies, tertiary institutions and other public entities. • The CHIETA and affiliated employers have embraced and are using the language of occupations – contained in the OFO – as the accepted terminology for and approach to jobs and qualifications.

17. CHIETA Practices to determine skills needs (2) • Since 2012, employers submit individual employee records against OFO codes. The WSP-ATR and scarce skills information is captured in an electronic data system and exceeds the minimum legislated requirements. • Proposal (currently circulating for public comment) making it compulsory for all employers in all SETAs to submit “source data” (information per employee) in WSPs (Annexure 2 of SETA Grant Regulations)… • The CHIETA engages with organisations in the sector through its regional offices and forums to motivate and assist them to complete their mandatory grant applications. • WSP-ATR source data reviews, value chain and qualification matrixes, and occupation profiling processes assist in highlighting OFO misalignment and mapping issues in the Chemical Industries Sector.

18. CHIETA Practices to determine skills needs (3) • The WSP-ATR dataset is regarded as the most comprehensive and accurate information on employment in the Chemical Industries Sector as it represents around 80% of all the employees in the sector. • The CHIETA commissions research in areas relating to core labour market trends in the sector. The results are utilised for focused skills planning around scarce and critical skills within the sector. • A demand projection model was developed to project demand at a detailed occupational level. • The occupational distribution of employees in the Chemical Industries Sector is a clear indication of a larger demand for skilled workers (47%), than for semi-skilled workers (38%) and a very low demand for low-skilled workers (15%). • With nearly half (47%) of employees in skilled occupations – and most employees in STEM occupations across all levels – employers in the Chemical Industries Sector have to compete for skills which are in short supply not only in South Africa, but elsewhere in the world.

19. CHIETA Practices to address skills needs (1) Examples of interventions to address the skills needs of employers include the following: • The CHIETA interventions span the whole skills development pipeline and include interventions for learners and educators at school level – especially in respect of mathematics and science teaching. • In spite of the challenges faced in regard to obtaining workplace experience opportunities, the CHIETA has, over the last few years, begun to foster strong partnerships with relevant TVET colleges, Universities of Technologies, Universities and industry that offer trade related qualifications and workplace experience opportunities and in support of national imperatives.

20. CHIETA Practices to address skills needs (2) • A large portion of training opportunities to employees in the Chemical Industries Sector are short courses, skills programmes and induction programmes, the majority of which are non-accredited. • The Chemical Industries Sector is dependent on advanced technological training that is not available locally and that are not accredited in South Africa. This training has to be procured at very high cost to employers. • Since the establishment of the QCTO, the CHIETA has modified and registered three qualifications required in the Chemical Industries Sector. • The CHIETA is currently busy with the modification of existing qualifications and the development of new qualifications.

21. CHIETA Operational Practices (1) Pertinent points with regard to the CHIETA’s corporate governance, organisational and financial management call into question the DHET’s negative perspective on the way SETA’s are managed: • The CHIETA has received an unqualified audit opinion for all financial years since the inception and is one of the few SETAs that has received an award from AGSA for an unqualified, clean audit in the financial year 2014/2015. • The CHIETA has no difficulty in securing employer applications for grants or with the disbursement of grants, through its online system.

22. CHIETA Operational Practices (2) • To prioritise occupations for funding, the CHIETA factors guidance from the governance structure, research conducted for the SSP, which involves the analysis of sector skills demand through WSP-ATR (mandatory grant) and discretionary grant applications, and scarce skills needs identified from strategic national development plans and initiatives. • The CHIETA has exceeded its NSDS targets for grant disbursement for each year since inception. • Expenses on mandatory grants represent 99.6% of the skills development levy income received for the purposes of mandatory grants. • Expenses on discretionary grants represent 99.5% of the skills development levy income received for the purposes of discretionary grants.

23. SETA Business Recommendations SETA business should be aligned to address the following critical elements of an education and training system: • The South African education and training system should become more responsive and relevant to businesses rather than government if it is to deliver value for businesses and the taxpayer and provide routes into work for individuals. • A better alignment of a number of regulations and of budgets across different government expenditure functions is needed, SETAs should take the lead by scouting the landscape and putting related systems and processes in place.

24. SETA Recommendations (2) • Many more students must be given the opportunity to learn science, technology, engineering and mathematics (STEM) skills. • Workplace-based learning programmes should be designed as an integral and integrated part of the curriculum, rather than as a ‘bolt on’ experience; that is, worthwhile work placement experiences are dependent on a shared understanding of purpose and role, quality supervision, appropriate task allocation, student preparedness, and authentic assessment practices. • The DHET should avoid making the delivery of government targets the primary objective of SETAs.

25. SETA Recommendations (3) • A more nuanced and productivity focused skills development strategy would examine how government can play a role in increasing employer demand for skills linked to business needs whilst encouraging more effective skills utilisation and productivity through the promotion of high performance working practices. • The role of the Government representatives should not interfere with the independence of the SETAs. • The DHET should build on the strengths of current successful SETAs, rather than starting again with a new model involving significant lead times and a loss of industry networks, without any significant benefit.

26. SETA Recommendations (4) The CHIETA should consider to: • Develop and launch an advertising campaign to educate organisations about the importance of workplace-based learning to the future of the Chemical Industries Sector. • Review job title-to-OFO mapping for WSP-ATR submission purposes on an annual basis. • Address the needs of employers (i.e. increasing productivity, boosting bottom-line business benefits, driving up standards etc.) with a clearly articulated theory of change as to how the CHIETA will help to deliver this objective. • Provide business support to employers to improve people management and skills development.

27. SETA Recommendations (5) The CHIETA should consider to: • Recruit employer representative on its Board that are at the highest level of their businesses, i.e. Chief Executive and equivalent from the most influential and respected employers in the industry. • Attract workforce representatives from key industry leaders and peak industry associations. • Play a more supportive role regarding skills development related BBBEE scoring and tax rebates: i.e. help organisations to claim maximum benefits for skills development interventions.

28. Suggested Road Ahead for the CHIETA The CHIETA has come a long way in creating a credible institutional mechanism for skills planning, which has resulted in stakeholders in the Chemical Industries Sector holding the SETA in high regard and indispensable in developing a competent workforce. All of the aspects alluded to above (i.e. NSLP 2015 proposed changes; global perspectives on skills development systems; the CHIETA’s practices; and recommendations for alignment) are summarised in a framework that CHIETA could use to position itself for an even more efficient service to the sector. The suggested framework does not add anything to what the SETA already does, but rather argues for a synergising of effort, giving sanction to the notion that a well-functioning system is more than the sum of its components.

29. 1. Define the Sector in Terms of Occupations The CHIETA should increase its efforts to define each of the nine subsectors in the Chemical Industries Sector in terms of the specific occupations that drive individual subsectors and the sector as a whole. Being a national occupation in demand is a spinoff and not a primary objective. The following are key in developing sector occupation profiles: • Occupations are correctly reflected on the OFO. • Accurate workforce information has been obtained from employers. • Occupations and their related specialisations are defined per subsector. • Subsector value chains that inform career paths for occupations have been developed. • Learning pathways for occupations are developed that indicate relevant qualifications, preferred or specific providers known for addressing industry specific needs, and workplaces that are regarded as places of learning for specific occupations. • Stakeholders related to the occupations that are regarded as experts or custodians for the occupation are identified. • All information is managed on a central platform. • The status of demand and supply projections are tracked and updated according to the impact of interventions.

30. 2. Support Learning The CHIETA must refine its support to learning institutions (regardless of whether they are public or private), by developing occupational qualifications and by supporting providers in creating competent learners. The following aspects should drive these initiatives: • Ensure learners have the requisite STEM related competence to participate in learning programmes across the learning pathway by assisting providers with assessment and capacity building mechanisms. • Assist in the development of QCTO related qualifications, with the autonomy of industry at heart, and gradually supporting professional bodies and other centres of excellence into their roles of self-regulation and capacity building. • Launch initiatives to garner lecturer support for providers (e.g. incentive schemes to use retired artisans to act as mentors and trainers). • Assist providers with the development of learning material and valid (related to industry needs) assessment instruments and tools. • Help providers identify and contract workplaces for the work experience modules of the respective qualifications. • Align grant funding allocation to providers that address occupations in demand.

31. 3. Assist Workplaces to be Places of Learning The CHIETA should adopt a strategic approach to increase employer involvement in creating workplaces that are places of learning, by: • Defending the need that employers have for in-house training. • Aligning grant allocation to supporting occupations in demand. • Helping employers to benefit from tax rebates for skills development and job creation. • Availing grants and processes to promote RPL of learners already in employment that need to obtain qualifications. • Creating systems that alleviate the administrative processes related to workplace learning. • Assisting companies to meet the criteria for registration as places of learning. • Targeting Chemical Industries Sector related development in national identified areas of focus or IDZs (industrial development zones).

32. 4. Refine Institutional Mechanisms in Support of Skills Development Thank You! The CHIETA has to ensure that the criteria for awarding grants are aligned to strategic imperatives of the Chemical Industries Sector. • Though this criteria alignment may seem superficial it is paramount to defending the way in which the CHIETA primarily builds the sector and as a secondary focus also support national imperatives. • Better alignment will allow the CHIETA to clearly indicate, track and trace, and report how skills development funding and interventions come to fruition and span the entire learning pathway, progressively taking learners from one stage to the next.

33. References (1) ILO. 2010. A Skilled Workforce for Strong, Sustainable and Balanced Growth. A G20 Training Strategy. International Labour Office, Geneva CBI. 2015. Inspiring Growth: CBI/PEARSON Education and Skills Survey 2015. Dunbar, M. 2015. Skills and Capacity: What Does Learning Need to Look Like Today to Prepare the Workforce of 2030? Paper presented at UKFIET Conference 2015. Sattler, P., and Peters, J. 2013.Work-Integrated Learning in Ontario’s Postsecondary Sector: The Experience of Ontario Graduates. Toronto: Higher Education Quality Council of Ontario. Patrick, C.J., Peach, D., Pocknee, C., Webb, F., Fletcher, M. and Pretto, G. (2008) The WIL [Work Integrated Learning] report: A national scoping study [Australian Learning and Teaching Council (ALTC) Final report]. CHE. 2011. Work-Integrated Learning: Good Practice Guide. Council on Higher Education, Pretoria.

34. References(2) PhillipsKPA, 2014. Engaging Employers in Work Integrated Learning: Current State and Future Priorities. Report to the Australian Government Department of Industry. Todd, R. 2015. Sector Skills Councils: Can they Enhance Employer Engagement in Skills Development Systems? Paper presented at UKFIET Conference 2015. STB, 2008. State Training Board Review of Industry Training Advisory Arrangements in Western Australia. UKCES. 2014. The Future of Work: Jobs and Skills in 2030. Evidence Report 84. UK Commission for Employment and Skills. Kraak, 2015. State Policy Failure in Overcoming Low Employer Demand for Skills in South Africa. (In Hofmeyer, J. & Nyoka, A., eds. 2015. 2014 Transformation Audit. Breaking the Mould. Prospects for Radical Socio-economic Transformation. The Institute for Justice and Reconciliation, Cape Town. p.39-48). OECD (Organisation for Economic Co-operation and Development). 2015.Education at a Glance 2015: OECD Indicators, OECD Publishing.