Deputy minister of the Department of Trade, Industry and Competition Nomalungelo Gina says that South African companies will fail to successfully transform as they don’t follow the country’s skills development regulations.
Addressing the B-BBEE Commission’s annual conference on Wednesday (17 March), the deputy minister said that there are several risks if skills development is not implemented to the full.
The conference focuses on skills development as one of the priority elements within the B-BBEE Act to create a dialogue on how public and private sector entities can scale up the impact in the South African economy.
“At stake, and the implication is that many companies remain lily-white at the middle and top management levels as blacks and women at the bottom will remain unskilled and therefore unqualified for any career pathing in companies,” she said.
Gina said that these previously disadvantaged employees will fall by the wayside, in the skill pipeline established by companies, except for white and other privileged groups.
“This ugly fact – by its nature – undermines the transformation agenda of the country in addressing the centuries-long legacy of colonialism and apartheid economic exclusion, management and control by colour bar.”
Gina added that the lack of skills development means that new matriculants and graduates will fail to find a new entry-point to the workforce.
The discourse of the conference is anchored around Code Series 300 of Codes of Good Practice, from which entities are incentivised to implement skills development to advance the development of black South Africans for sustainable employment and effective participation in the South African economy.
This code requires private and public entities to spend 6% of their payroll annually towards skills for their employees and non-employees.
However, Gina said that many companies fail to meet this requirement or fail to take it seriously.
Some of the things the deputy minister says companies are doing include:
- Exhausting training and development expenditure by spending it in non-core training courses, which translates into fiscal dumping rather than actual training;
- Deliberately ‘mismatching’ their training courses with the skills that are actually needed, condemning trainees to inertia and a lack of growth opportunities;
- Setting-up ‘simulation’ training which does not impart real skills or practical experience – the equivalent of a box-ticking exercise.
“This is the worst form of corporate racism in display that the B-BBEE Commission, as a regulator, must exercise both its compliancy strategy and enforcement strategy in stemming this tide from the companies that get reported to the Commission,” Gina said.
— BBBEE Commission (@bbbeecommission) March 17, 2021
Skills development is an intrinsic part of economic transformation and the building of an inclusive economy, said Zodwa Ntuli, commissioner, of the B-BBEE Commission.
“As we face challenging times on funding and employability, entities will share best practices and strategies to accelerate the upskilling of black South Africans, including those in rural and under-developed areas,” she said.
“Our annual national status reports on transformation show that of the 6% of the payroll, the public and private sectors only managed to spend 37% in 2017, 49% in 2018 and 49% in 2019, and this could be improved significantly to fund higher learning education and offer more on-the-job training through internships and learnerships.”
Ntuli said that Code Series 300 of Codes of Good Practice remains an important policy catalyst in the creation of employment as the means to make a contribution to the growth of the South African economy in line with the objectives of the National Development Plan.
“There are initiatives that show positive results and can be emulated by other entities and panellists will share more ideas on these.
“There is no better time to coordinate efforts on this topic than now as South Africa is robustly implementing measures for economic recovery and reconstruction,” she said.