Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey
Kalie Pauw Haroon Bhorat Sumayya Goga Liberty Ncube Carlene van der Westhuizen [email protected]
Development Policy Research Unit November 2006 DPRU Working Paper 06/115 ISBN: 1-920055-36-3 Abstract
The paper reflects on the findings from a firm survey conducted among twenty of South $IULFD¶VODUJHVW¿UPVDFURVVDUDQJHRIVHFWRUV7KHVXUYH\IRUPHGSDUWRIUHVHDUFKFRQGXFWHG by the Development Policy Research Unit on graduate unemployment in South Africa. The ¿UPLQWHUYLHZVWUDYHUVHGDUDQJHRILVVXHVUHODWLQJIRUH[DPSOHWRWKHVFKRROLQJDQGKLJKHU HGXFDWLRQV\VWHPWKHOHDUQHUVKLSSURJUDPPHDQG1DWLRQDO6NLOOV'HYHORSPHQW6WUDWHJ\ 16'6 DQGWKHQDWXUHRIVNLOOVVKRUWDJHVDQGWKHVNLOOVGH¿FLW,QWXUQDQXPEHURIGHWDLOHG long- and short-run policy suggestions emanated from the interviews and background research.
,QWKHFRQWH[WRIVNLOOVVKRUWDJHVWKHSHUVLVWHQFHRIXQHPSOR\PHQWDPRQJJUDGXDWHV LVSX]]OLQJ+RZHYHUWKHILQGLQJVKHUHVXJJHVWWKDWUHSRUWHGVNLOOVVKRUWDJHVHVSHFLDOO\ LQRFFXSDWLRQVVXFKHQJLQHHUVWHFKQLFLDQVDQGVFLHQWLVWVDUHPRVWVHYHUHDWWKHPLGGOH WRVHQLRUPDQDJHPHQWOHYHO*UDGXDWHVGRQRWFRPSHWHIRUWKHVHSRVLWLRQV LQIDFW¿UPV JHQHUDOO\DJUHHWKDWWKHUHDUHHQRXJKJUDGXDWHVDYDLODEOHLQWKHHFRQRP\)LUPVGRIHHO KRZHYHUWKDWJUDGXDWHVRIWHQGRQRWSRVVHVVWKHQHFHVVDU\VNLOOVDQGH[SHULHQFHWREH considered even for entry-level positions. Poor education therefore lies at the heart of the JUDGXDWHXQHPSOR\PHQWSUREOHP:KLOHRQWKHMREWUDLQLQJLQWKHIRUPRIOHDUQHUVKLSV LPSOHPHQWHGLQDFFRUGDQFHZLWKWKH16'6FDQSRWHQWLDOO\EULGJHWKHVNLOOVGH¿FLWRIJUDGXDWHV WKHVXUYH\¿QGLQJVUDWKHUVXJJHVWWKDWWKLVVXEVLGLVHGHPSOR\PHQWDQGWUDLQLQJSURJUDPPH KDVQRWJHQHUDWHGDERYHHTXLOLEULXPHPSOR\PHQWLQ¿UPV
:KLOHVKRUWWHUPLQWHUYHQWLRQVPD\KHOSDOOHYLDWHLPPHGLDWHVNLOOVVKRUWDJHVLQWKHHFRQRP\ it is clear from this research that a longer-term agenda of radically improving education and WUDLQLQJLQ6RXWK$IULFDLVWKHRQO\VXVWDLQDEOHVROXWLRQWRVNLOOVVKRUWDJHVDQGHYHQWXDOO\WKH graduate unemployment problem.
Acknowledgement
This paper is adapted from Chapters 3 and 4 of a Research Report on Graduate 8QHPSOR\PHQWZKLFKZDVFRPPLVVLRQHGE\%XVLQHVV/HDGHUVKLS6RXWK$IULFDDQGIXQGHGE\ Standard Bank. The full report is available from the DPRU on request. Also refere to Working Paper 06/114 in this series.
Development Policy Research Unit Information about our Working Papers and other Tel: +27 21 650 5705 published titles are available on our website at: Fax: +27 21 650 5711 http://www.commerce.uct.ac.za/dpru/ Table of Contents 6. References48 1. Introduction...... 1
2. A Note on the Sample...... 1
3. Findings from the Firm Survey and Related Research...... 3 3.1 Production and Workforce Trends...... 3 3.2 Recruitment and Talent Management Strategies...... 5 3.3 Incentive Schemes aimed at Promoting Employment and Training...... 10 9DFDQFLHV6FDUFH6NLOOV(GXFDWLRQDQG7UDLQLQJ23
4. Policy Options...... 34 4.1 On Skills Shortages and Vacancies...... 34 4.2 On Education and Human Capital...... 37 4.3 On Workplace Training...... 38 4.4 Other Policy Issues...... 41
5. Conclusions...... 42
6. References...... 44 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey
1. Introduction
As part of the Development Policy Research Unit’s research into Graduate Unemployment (see Working Paper 06/114) a series of interviews with some of South Africa’s largest FRPSDQLHVDFURVVDUDQJHRIGLIIHUHQWVHFWRUVZHUHFRQGXFWHGGXULQJ)HEUXDU\DQG0DUFK RI7KHLQWHUYLHZVEURDGO\RQWKHJUDGXDWHXQHPSOR\PHQWSUREOHPWUDYHUVHGD UDQJHRILVVXHVUHODWLQJIRUH[DPSOHWRWKHVFKRROLQJDQGKLJKHUHGXFDWLRQV\VWHPWKH learnership programme and National Skills Development Strategy (NSDS) and the nature of VNLOOVVKRUWDJHVDQGWKHVNLOOVGH¿FLW,QWXUQDQXPEHURIGHWDLOHGORQJDQGVKRUWUXQSROLF\ suggestions emanated from the interviews and background research.
2. A Note on the Sample
The sample of companies selected for the interviews comprises 20 of South Africa’s largest FRPSDQLHVRIZKLFK DUHPHPEHUVRI%XVLQHVV/HDGHUVKLS)RXUWHHQRIWKHFRPSDQLHV DUHOLVWHGRQWKH-6(DQGRIWKHVHZHUHDPRQJWKHWRSSHUIRUPLQJFRPSDQLHVDV UDQNHGRQ0DUFK -6(/LEHUW\/LIH 7KHFRPSDQLHVDUHVSUHDGDFURVVD UDQJHRIHFRQRPLFVHFWRUVZLWKWZRLQWKHPLQLQJVHFWRUQLQHLQWKHPDQXIDFWXULQJVHFWRU RQHFRQVWUXFWLRQFRPSDQ\RQHFRPSDQ\LQWKHZKROHVDOHDQGUHWDLOWUDGHVHFWRUDQGWZR FRPSDQLHVLQWKHWUDQVSRUWDQGFRPPXQLFDWLRQVHFWRU)LYHPDMRUSOD\HUVLQWKH¿QDQFLDO services sector were also interviewed. The time constraints imposed on the project did not allow for a larger sample size.
(PSOR\PHQWGLIIHUVVLJQL¿FDQWO\DFURVVFRPSDQLHVUDQJLQJIURPDZRUNIRUFHRIMXVWRYHU employees to more than 40 000 workers. While employment numbers are not available for all WKHFRPSDQLHV7DEOHSURYLGHVDQLQGLFDWLRQRIWKHVL]HRIWKHZRUNIRUFHIRUWKHFRPSDQLHV ZHGRKDYHLQIRUPDWLRQIRUDVZHOODVWKHLUVKDUHFRQWULEXWLRQWRWRWDOHPSOR\PHQWLQWKH relevant sector in 2005.
1 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen
Table 1: Employment by Company and Sector, 2005
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Source: LFS 2005: 2 (SSA, Various); Company interviews and annual reports; Notes: Employment includes permanent, contract as well as temporary workers
The two mining companies accounted for more than 18 per cent of employment in the mining and quarrying sector in 2005. Seven of the manufacturing companies contributed 3.1 per FHQWWRWKHWRWDOHPSOR\PHQWLQWKHLUVHFWRUZKLOHWKHFRQVWUXFWLRQFRPSDQ\DFFRXQWVIRU 2.7 per cent of sectoral employment. Almost 6 per cent of the workers in the Transport and Communication industry were employed by the two companies that we interviewed. The three ¿QDQFLDOVHUYLFHVLQVWLWXWLRQVWKDWZHKDYHLQIRUPDWLRQIRUHPSOR\HGSHUFHQWRIWKHZRUNHUV LQWKH¿QDQFLDODQGEXVLQHVVVHUYLFHVHFWRU
2 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey
3. Findings from the Firm Survey and Related Research
3.1 Production and Workforce Trends
The introductory segment of the interviews covered general issues around past company SHUIRUPDQFHDQGIXWXUHH[SHFWDWLRQVDQGKRZWKHVHKDYHLPSDFWHGRQRUDUHOLNHO\WRLPSDFW RQHPSOR\PHQWLQWKHIXWXUH,QSDUWLFXODUFRPSDQLHVZHUHDVNHGDERXWFKDQJHVLQWKHVL]HDQG composition of their workforces. Evidence presented in Section 2 suggests that South African ¿UPVDUHLQFUHDVLQJWKHVNLOOVLQWHQVLW\RISURGXFWLRQDVDUHVXOWRIWKHDGRSWLRQVRIWHFKQRORJLFDOO\ advanced production techniques in an effort to become more competitive globally. This often leads to a decrease in the size of the workforce while at the same time altering the composition of the workforce (ratio of skilled versus unskilled workers). The introductory questions were WKHUHIRUHDLPHGDW¿QGLQJRXWZKHWKHUVXFKWUHQGVZHUHDOVRYLVLEOHLQWKHVPDOOVDPSOHRIODUJH ¿UPVLQWHUYLHZHG+RZHYHUDWWKHVDPHWLPHWKH6RXWK$IULFDQHFRQRP\LVHQWHULQJDERRP SKDVHZKLFKLPSOLHVWKDWVRPH¿UPVPD\DFWXDOO\H[SHFWWRH[SDQGWKHLUSURGXFWLRQFDSDFLWLHV and hence employment numbers.
7KH¿UPVLQWHUYLHZHGW\SLFDOO\KDYHFRPSOH[FRUSRUDWHVWUXFWXUHVDQGDUHRIWHQLQYROYHGLQ PHUJHUVRUQHZDFTXLVLWLRQVVHOOLQJRIVXEVLGLDULHVDQGRXWVRXUFLQJRIDFWLYLWLHV7KHFRUSRUDWH landscape has also changed dramatically in the last few years with companies entering into Black Economic Empowerment (BEE) deals. Such corporate transactions may have important HPSOR\PHQWHIIHFWVIRUWKHFRPSDQ\FRQFHUQHG DVUHÀHFWHGLQWKHLUSD\UROO EXWWKHLQGLUHFW employment effects elsewhere in the economy may in fact negate the net employment effect. $VDUHVXOWLWLVVRPHWLPHVGLIILFXOWWRGLVFHUQHPSOR\PHQWWUHQGV+RZHYHUWKHJHQHUDO LQGXVWU\VSHFL¿FWUHQGVVHHPWRFRQFXUZLWKWKRVHRIWKHHFRQRP\,QVKRUWWKHSDVWGHFDGH or more has shown a decline in the importance of the primary sectors in the economy and a shift towards the more skill-intensive secondary (manufacturing) and tertiary (services) sectors. )LUPVWKHPVHOYHVKDYHDOVRW\SLFDOO\EHFRPHPRUHVNLOOVLQWHQVLYH%HORZZHEULHÀ\UHSRUW RQVRPHRIWKHLQGXVWU\DQG¿UPVSHFL¿F¿QGLQJVZLWKUHJDUGVWRJURZWKH[SHFWDWLRQVDQG employment trends.
The mining companies generally agree that the mining industry is unlikely to grow in the IXWXUHDWOHDVWQRWZLWKLQWKHGRPHVWLFHFRQRP\$VVXFKWKHLQGXVWU\LVXQOLNHO\WRPDLQWDLQLWV share of employment as the labour force grows over time – a trend that has in fact been visible IRUVRPHWLPHDQGFDQEHH[SHFWHGIURPGHYHORSLQJHFRQRPLHV7KHJROGPLQLQJLQGXVWU\ LQSDUWLFXODULVDWEHVWVWDEOHEXWSRWHQWLDOO\DGHFOLQLQJRQHGHVSLWHUHFHQWKLNHVLQWKHJROG SULFH7KHODUJHPLQLQJFRPSDQLHVLQ6RXWK$IULFDDUHPXOWLQDWLRQDOVDQGDWSUHVHQWFRPSDQ\ JURZWKLVGULYHQPDLQO\E\H[SDQVLRQLQWRRYHUVHDVPDUNHWVZLWKQRVLJQL¿FDQWHPSOR\PHQW impact domestically in South Africa.
As far as company growth and past and future employment trends in manufacturing are FRQFHUQHGPRVWFRPSDQLHVSODQWRH[SDQGSURGXFWLRQERWKGRPHVWLFDOO\DQGLQWHUQDWLRQDOO\ +RZHYHUYHU\RIWHQLQFUHDVHGGRPHVWLFRXWSXWLVDVVRFLDWHGZLWKKLJKHUODERXUSURGXFWLYLW\
3 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen
and improved production techniques rather than increased employment levels. While few ¿UPVDUHH[SOLFLWO\UHGXFLQJWKHLUZRUNIRUFHVL]HVWKURXJKOD\RIIVPDQ\DUHEHFRPLQJµOHDQHU¶ in the long run by recruiting at a rate that is below the natural attrition rate (resignations and UHWLUHPHQW RIWKHZRUNIRUFH,QFUHDVHGSURGXFWLRQHI¿FLHQF\LVDOVRW\SLFDOO\DVVRFLDWHGZLWK LQFUHDVHGVNLOOVLQWHQVLW\RIWKHZRUNIRUFH+RZHYHUWKLVWUHQGRIGRZQVL]LQJRUµULJKWVL]LQJ¶ LVOLNHO\WREHVRPHWKLQJRIWKHSDVW,WKDGPXFKWRGRZLWKLQHI¿FLHQFLHVLQSURGXFWLRQWKDW had to be dealt with. In many instances large and ineffective staff structures were inherited IURPWKHSDVWFDXVHGLQSDUWE\VXEVLGLVDWLRQDQG\HDUVRIHFRQRPLFLVRODWLRQ7KHFXUUHQW HFRQRPLF UHFRYHU\ FDQ KRZHYHU UHYHUVH WKH WUHQGV RI GRZQVL]LQJ HVSHFLDOO\ LI WKH PDQXIDFWXULQJVHFWRULVDEOHWRH[SORLWRSSRUWXQLWLHV6RPH¿UPVKLQWHGDWSODQVWRH[SDQG SURGXFWLRQFDSDFLW\HVSHFLDOO\LQWKHOLJKWRIDQQRXQFHPHQWVE\JRYHUQPHQWRIODUJHVFDOH investments in public infrastructure.16XFKDQLQFUHDVHLQIRUH[DPSOHWKHQXPEHURISODQWVD ¿UPRZQVDQGRSHUDWHVLVOLNHO\WRJRKDQGLQKDQGZLWKLQFUHDVHGHPSOR\PHQWOHYHOVGHVSLWH FRQWLQXLQJHIIRUWVE\¿UPVWREHFRPHPRUHHI¿FLHQWLQSURGXFWLRQ2 The combined effects of VNLOOVLQWHQVL¿FDWLRQDQGFDSDFLW\H[SDQVLRQLPSO\WKDWNH\PDQXIDFWXULQJVNLOOVHJDUWLVDQV WHFKQLFLDQVVFLHQWLVWVDQGHQJLQHHUVZLOOEHFRPHHYHQPRUHLPSRUWDQWLQWKHQHDUIXWXUH VHH discussions in section 3.4).
Firms in the services sector generally report that favourable economic conditions have meant an increase in business and employment opportunities. Firms in the wholesale and retail WUDGHVHFWRUKDYHH[SHULHQFHGDERRPSKDVHDQGUHSRUWVLJQL¿FDQWLQFUHDVHVLQVDOHVWKH number of retail outlets and employment levels. Favourable economic conditions during a SHULRGRIORZLQWHUHVWDQGLQÀDWLRQUDWHVKDYHOHGWRVWURQJJURZWKLQFRQVXPSWLRQH[SHQGLWXUH E\KRXVHKROGVLQWKHODVW¿YHWRWHQ\HDUV7KH¿QDQFLDOVHUYLFHVLQGXVWU\KDVDOVREHQH¿WHG IURPLQFUHDVHGHFRQRPLFDFWLYLW\DQGH[SDQVLRQLQWRQRQWUDGLWLRQDOPDUNHWV3 As a result HPSOR\PHQWOHYHOVLQEDQNLQJDXGLWLQJDQGLQVXUDQFH¿UPVKDYHEHHQRQWKHULVH7KHUH ZDVRQHH[FHSWLRQWRWKLVZLWKRQHRIWKHLQVXUDQFH¿UPVUHSRUWLQJDGHFOLQHLQHPSOR\PHQW LQWKHODVWWKUHHWR¿YH\HDUV+RZHYHUWKLVZDVUHODWHGWRWKHQHWHPSOR\PHQWHIIHFWVRI PHUJHUVDFTXLVLWLRQVDQGRXWVRXUFLQJRIQRQFRUHEXVLQHVVSURFHVVHV7KHWUDQVSRUWDQG communications sector is highly monopolised. As competition barriers are being removed the ¿UPVDUHGULYLQJHI¿FLHQF\DQGUHVWUXFWXULQJLQHI¿FLHQWVWDIIVWUXFWXUHVZKLFKKDYHJHQHUDOO\ led to a decline in employment levels.
1 According to the 2005 Medium Term Budget Policy Statement (National Treasury, 2005) public sector investment is set to rise from its current level of approximately 6 per cent of GDP to 8 per cent of GDP. This implies that government’s capital budget will rise by between 15per cent and 20 per cent per annum (ASGISA, 2006). 2 Few firms were willing to reveal specific plans to expand capacity given the sensitive nature of such information. However, some firms have hinted at the potential impact of government’s plans to increase public investments (see footnote 1). 3 This includes mostly remote rural areas and informal markets that were previously not serviced by the banking industry.
4 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey
In summary the broad industry trends suggest that the services sector will remain the fastest growing sector. Financial management and accounting skills are important and enrolment in WKHVHDUHDVKDVWREHHQFRXUDJHG+RZHYHUWKHPDQXIDFWXULQJVHFWRUVKRXOGQRWEHLJQRUHG 6NLOOVLQWHQVL¿FDWLRQDQGFDSDFLW\H[SDQVLRQOLQNHGWRJRYHUQPHQW¶VSODQVWRLQYHVWKHDYLO\LQ infrastructure also implies that the current skills shortages in technical occupations such as DUWLVDQVHQJLQHHUVDQGWHFKQLFLDQVZLOOEHFRPHHYHQPRUHFULWLFDO
3.2 Recruitment and Talent Management Strategies
3.2.1 Recruitment Philosophies
7KHUHFUXLWPHQWSURFHVVHVDQGVWUDWHJLHVYDU\JUHDWO\EHWZHHQGLIIHUHQWW\SHVRI¿UPV,Q SDUWLFXODUWZRPDLQDSSURDFKHVH[LVW7KH¿UVWLVFRPPRQO\NQRZQDVWKHµSLSHOLQH¶VWUDWHJ\ which entails a strong focus on the recruitment of young people who start at entry-level positions and are groomed and trained for middle- to senior management positions within the ¿UP0RVWRIWKH¿UPV SHUFHQW LQWHUYLHZHGEDVHWKHLUUHFUXLWPHQWVWUDWHJLHVRQVXFKD SLSHOLQHVWUDWHJ\)RUPRVWRIWKHVH¿UPVWKHUHFUXLWPHQWSURFHVVLVDFRUHEXVLQHVVIXQFWLRQ ZLWKEXUVDU\VFKHPHVWUDLQLQJLQLWLDWLYHVJUDGXDWHUHFUXLWPHQWGULYHVDQGJHQHUDOUHFUXLWPHQW DOOOLQNHGH[SOLFLWO\WRWKHFXUUHQWRUIXWXUHEXVLQHVVQHHGVRIWKH¿UP+RZHYHUIHZRIWKH¿UPV interviewed felt that their pipeline strategies are working in the sense that most vacancies DULVLQJDWPLGGOHWRVHQLRUPDQDJHPHQWOHYHOVDUH¿OOHGLQWHUQDOO\,QIDFWPDQ\¿UPVHQG up spending a large amount of resources on recruitment and headhunting of people with H[SHULHQFHWR¿OOYDFDQFLHVDWWKHXSSHUHQGRIWKHSLSHOLQH
7KHVHFRQGDSSURDFKLVWKDWRIRQO\KLULQJSHRSOHZLWKH[SHULHQFH7KLVLPSOLHVWKDWKLJKHU VDODULHVDUHRIIHUHGEXWOLPLWHGWUDLQLQJLVUHTXLUHGJLYHQWKHSHUVRQ¶VSDVWH[SHULHQFH7KH choice between employing recent graduates or matriculants into entry-level positions as RSSRVHGWRHPSOR\LQJPRUHH[SHULHQFHGZRUNHUVLVDGLI¿FXOWRQHWRPDNH'HVSLWHWKHIDFW WKDWPRVW¿UPVDGKHUHWRWKHSLSHOLQHVWUDWHJ\TXLWHDQXPEHURI¿UPVQHYHUWKHOHVVIHHOWKDW H[SHULHQFHGZRUNHUVDUHPRUHDWWUDFWLYHWKDQUHFHQWJUDGXDWHVIURPDUHFUXLWPHQWSRLQWRI view. Graduates and matriculants need substantial investments in training before they become assets to the companies. At the same time young people are highly mobile and the risk of ORVLQJD\RXQJWUDLQHHWRDFRPSHWLWRUVKRUWO\DIWHUFRPSOHWLRQRIWUDLQLQJLVKLJK 4 This is perhaps sample-specific. Typically large firms are in a better position, financially, to spend large amounts of money on training and staff development. They are also more willing and able to take the ‘risks’ associated with the pipeline strategy. 5 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen )URPDQDWLRQDOKXPDQUHVRXUFHGHYHORSPHQWSRLQWRIYLHZLWLVFUXFLDOWKDWDOO¿UPVEX\ into the pipeline strategy. For this to happen incentives need to be created to increase the DEVRUSWLRQRIJUDGXDWHVRU\RXQJSHRSOHZKLOH¿UPV¶LQYHVWPHQWVLQWUDLQLQJDQGGHYHORSPHQW of young recruits should be protected. The learnership programme is one such incentive V\VWHP7KHIDFWWKDWWKHPDMRULW\RI¿UPVLQWHUYLHZHGDUHIRUFHGWRUHFUXLWH[SHULHQFHGZRUNHUV H[WHUQDOO\ZKHQYDFDQFLHVDULVHDWPLGGOHWRVHQLRUPDQDJHPHQWOHYHORIWHQDWDODUJHFRVWWR WKHFRPSDQ\LVLQGLFDWLYHRIWKHIDLOXUHRIWKHSLSHOLQHVWUDWHJLHVRIPDQ\¿UPV7KHFRVWWRWKH FRPSDQ\LVRIWHQLQÀDWHGGXHWRH[RUELWDQWKHDGKXQWLQJIHHVRIHPSOR\PHQWDJHQFLHV7KH SUREOHPLVH[DFHUEDWHGRIFRXUVHE\SRDFKLQJDQGKHDGKXQWLQJGXHWRWKHRQJRLQJµZDUIRU talent’ in South Africa. Recently steps were taken to simplify the immigration process for foreign workers with key skills. This reflects the severity of the scarce skills problem in South Africa (see section +RZHYHUVXFKLQLWLDWLYHVKDYHWREHVHHQDVVKRUWWHUPPHDVXUHVDLPHGDWUHOLHYLQJ LPPHGLDWHVKRUWDJHVLQWKHPDUNHWDQGVKRXOGRQO\EHFRQVLGHUHGLQFDVHVZKHUHVNLOOV VKRUWDJHVDUHKDPSHULQJFRPSDQ\JURZWK7KHIDFWWKDWFRPSDQLHVUHJDUGH[SHULHQFHG ZRUNHUVZKHWKHUIRUHLJQRUORFDODVPRUHDWWUDFWLYHWKDQLQH[SHULHQFHGJUDGXDWHVLVZRUU\LQJ 3.2.2 Graduate Recruitment 5HFUXLWPHQWGULYHVRUUHFUXLWPHQWH[KLELWLRQVRQFDPSXVHVDUHSRWHQWLDOO\YHU\LPSRUWDQWWR ERWKHPSOR\HUVDQGHPSOR\HHV)URPD¿UP¶VSHUVSHFWLYHWKH\UHSUHVHQWDQRSSRUWXQLW\WR PDUNHWWKH¿UPDVDSUHIHUUHGHPSOR\HUZKLFKPD\DWWUDFWKLJKFDOLEUHMREVHHNHUV)URPWKH VWXGHQWVSRLQWRIYLHZWKH\SURYLGHLQIRUPDWLRQRSHQXSRSSRUWXQLWLHVDQGRSWLRQVZKLOHDOVR VKDSLQJSHUFHSWLRQVDQGH[SHFWDWLRQVRIVWXGHQWVDERXWWKHZRUNSODFH5 7KHXVHRIUHFUXLWPHQWGULYHVDWFDPSXVHVJHQHUDOO\GHSHQGVRQWKH¿UPV¶SUHIHUHQFHIRU WKLVW\SHRIUHFUXLWPHQWVWUDWHJ\5HFUXLWPHQWGULYHVDUHRIWHQYHU\H[SHQVLYHHVSHFLDOO\ ZKHQLWLQYROYHVFDPSXVYLVLWVZLWKH[KLELWVDQGSUHVHQWDWLRQVDQGRQFDPSXVVFUHHQLQJDQG LQWHUYLHZV$VDUHVXOWRQFDPSXVUHFUXLWPHQWGULYHVDUHRIWHQRQO\XVHGE\ODUJH¿UPVWKDW employ large numbers of graduates annually as a recruitment channel.6)RU¿UPVWKDWRQO\WDNH RQDOLPLWHGQXPEHURIJUDGXDWHVDQQXDOO\UHFUXLWPHQWGULYHVDUHYLHZHGDVWRRH[SHQVLYH )URPWKHLQWHUYLHZVLWEHFDPHFOHDUWKDWWKHPDMRULW\RI¿UPVWKDWPDNHXVHRIUHFUXLWPHQW GULYHVSUHIHUWRYLVLWRQO\VSHFL¿FLQVWLWXWLRQVZLWKPRVW¿UPVEHLQJIDLUO\H[SOLFLWDERXWWKHIDFW that they do not approach historically Black institutions. A variety of reasons was listed: 5 There is of course also the danger of ‘too much information’, especially with the Internet becoming an important marketing tool for firms. 6 The majority of firms interviewed make use of on-campus recruitment drives. 6 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey v 0RVWLPSRUWDQWO\RUZRUU\LQJSHUKDSVDUHFRPSDQLHV¶FRQFHUQVDERXWWKHTXDOLW\ RIHGXFDWLRQDWWKHVHLQVWLWXWLRQV:KHQ¿UPVLQYHVWODUJHDPRXQWVRIPRQH\LQ UHFUXLWPHQWGULYHVWKH\DWOHDVWH[SHFWDUHWXUQLQWKHIRUPRIDQDFFHSWDEOH TXDOLW\ education and good grades) number of potential recruits. This is often not the case at historically Black institutions. v 6RPH¿UPVDOVRIHOWWKDWVWXGHQWVDWKLVWRULFDOO\%ODFNLQVWLWXWLRQVDUHW\SLFDOO\QRW H[SRVHGWRPDQ\VXFKFRUSRUDWHUHFUXLWPHQWGULYHVDQGDUHWKHUHIRUHVRPHWLPHV overwhelmed and unable to deal with the interview process in a mature way. &RQVHTXHQWO\WKHVWXGHQWVDUHQRWKLJKO\VXFFHVVIXOLQWHUPVRIEHLQJVKRUWOLVWHG 7KLV UHODWHV WR WKH SUREOHP RI XQGHUGHYHORSHG VRIW VNLOOV FRPPXQLFDWLRQ VNLOOV writing skills etc.) among many young Black graduates in South Africa. v 0DQ\RIWKHPDQXIDFWXULQJ¿UPVLQGLFDWHGWKDWWKH\GRQRWDSSURDFKKLVWRULFDOO\ %ODFN LQVWLWXWLRQV VLQFH WKH\ GR QRW RIIHU FRXUVHV LQ DUHDV ZKHUH WKH\ UHFUXLW e.g. engineering. Recruitment drives at historically Black institutions simply do QRW SURGXFH WKH QXPEHU RI VXLWDEO\ TXDOL¿HG FDQGLGDWHV WR PDNH WKH H[SHQVH worthwhile. v Given increased enrolment numbers of Black students at historically White LQVWLWXWLRQV PRVW ¿UPV LQGLFDWHG WKDW WKH\ PDQDJH WR ¿QG HQRXJK HPSOR\PHQW equity candidates by only visiting the historically White institutions. v $GGLQJWR¿UPV¶UHOXFWDQFHWRYLVLWKLVWRULFDOO\%ODFNLQVWLWXWLRQVLVWKHLQDELOLW\RI these institutions to facilitate recruitment drives. Many of these institutions have poor infrastructures in terms of facilitating graduate recruitment drives. The infrastructure required to facilitate recruitment programmes includes well-functioning UHFUXLWPHQW SODFHPHQW RI¿FHV WUDLQHG DQG FRPPLWWHG VWDII VXLWDEOH YHQXHV IRU WDONVSUHVHQWDWLRQVDQGH[KLELWLRQVDQGPHGLD UDGLRVWXGHQWQHZVSDSHUVHWF on campus.7 7KHORZSUREDELOLWLHVRIVWXGHQWVIURPKLVWRULFDOO\%ODFNLQVWLWXWLRQVRI¿QGLQJHPSOR\PHQW DIWHUJUDGXDWLRQDUHSRVVLEO\OLQNHGWR¿UPV¶XQZLOOLQJQHVVWRLQYHVWLQUHFUXLWPHQWGULYHVDW WKHVHLQVWLWXWLRQV)LUPVFDQQHYHUEHIRUFHGWRYLVLWVSHFL¿FLQVWLWXWLRQV,WUHPDLQVDEXVLQHVV decision. Tertiary institutions need to realise the importance of facilitating the process of EULQJLQJWRJHWKHUSURVSHFWLYHHPSOR\HUVDQGHPSOR\HHVHVSHFLDOO\LIWKLVFDQLQFUHDVHWKH VXFFHVVRIVWXGHQWVLQ¿QGLQJHPSOR\PHQWRSSRUWXQLWLHV,WLVFUXFLDOIRUKLVWRULFDOO\%ODFN institutions to realise that their quality is also measured by their graduates’ success in securing HPSOR\PHQWDQGWKDWDQ\HIIRUWVWRZDUGVLPSURYLQJWKHLUFKDQFHVRI¿QGLQJHPSOR\PHQW ZLOOUHÀHFWSRVLWLYHO\RQWKHLQVWLWXWLRQ7KHFDUHHUSURVSHFWVRIVWXGHQWVDWKLVWRULFDOO\%ODFN 7 This was a comment not restricted to historically Black institutions. Some historically White institutions were also unhelpful in facilitating recruitment on campuses. 7 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen institutions will be further enhanced by improving the quality of teaching at these institutions. $OWHUQDWLYHO\LITXDOLW\LVRQSDUWKHQWKHVHLQVWLWXWLRQVKDYHWRUHDOLVHWKHLPSRUWDQFHRIXVLQJ SURSHUPDUNHWLQJVWUDWHJLHVIRUWKHLULQVWLWXWLRQWRDOWHUWKHSHUFHSWLRQVRIHPSOR\HUV 3.2.3 Bursary Schemes $ERXWSHUFHQWRI¿UPVLQWHUYLHZHGOLQNWKHLUJUDGXDWHUHFUXLWPHQWSURFHVVHVWREXUVDU\ VFKHPHV7KHVHDUHJHQHUDOO\OLQNHGWRXQLYHUVLW\HGXFDWLRQEXWLQVRPHLQVWDQFHVEXUVDULHV are also offered for studies at universities of technology or other technical institutions. The QXPEHURIEXUVDUVWDNHQRQYDULHVZLGHO\EHWZHHQ¿UPVEXWLVODUJHO\OLQNHGWRWKHDQQXDO LQWDNHRIJUDGXDWHVDWWKH¿UP6RPH¿UPVKRZHYHURIIHUIHZHUEXUVDULHVDQQXDOO\WKDQWKH planned intake and supplement the annual intake of graduates during graduate recruitment GULYHVRQFDPSXVHV2WKHUVRIIHUPRUHEXUVDULHVWKDQWKHSODQQHGLQWDNHLQZKLFKFDVHWKH H[SHQGLWXUHRQWKHEXUVDU\LVVHHQDVDFRUSRUDWHVRFLDOLQYHVWPHQWLQHGXFDWLRQ *HQHUDOO\¿UPVDUHYHU\SRVLWLYHDERXWWKHLUEXUVDU\VFKHPHVIRUDQXPEHURIUHDVRQV v 7KH\ HQVXUH WR D ODUJH H[WHQW WKDW WKH WDUJHWHG DQQXDO LQWDNH RI JUDGXDWHV LV UHDFKHG7KH\DOVRDOORZ¿UPVWRSODQDKHDGDQGHQVXUHWKDWHPSOR\PHQWHTXLW\ WDUJHWVZLOOEHPHWLQWKHIXWXUHE\HQUROOLQJWKHULJKWPL[RIVWXGHQWV v 7KH¿UPFDQEHFRPHLQYROYHGPRUHGLUHFWO\LQWKHHGXFDWLRQRIWKHVWXGHQWLQWKH sense that they can provide academic support and guidance as to subject choice. 6RPHRIWKH¿UPVWKDWUXQODUJHEXUVDU\VFKHPHVRIIHUDGGLWLRQDOJXLGDQFHLQWHUPV RIVXEMHFWFKRLFHWXWRULDOVDQGVWXG\VXSSRUW v )LUPV FDQ RIIHU UHOHYDQW SUDFWLFDO H[SHULHQFH WR EXUVDU\ KROGHUV E\ FUHDWLQJ RSSRUWXQLWLHV IRU YDFDWLRQ ZRUN 7KLV QRW RQO\ VXSSOHPHQWV VWXGHQWV¶ LQFRPHV but prepares students for the workplace and reduces the training requirement of students once they become employed full-time. v $OO WKHVH EHQH¿WV FRPH DW D IDLUO\ ORZ ULVN WR WKH FRPSDQ\ 0RVW EXUVDULHV DUH offered on condition that bursars have to work for the company for a set number RI\HDUVXVXDOO\OLQNHGWRWKHWLPHRIVSRQVRUHGVWXG\,IWKHVWXGHQWLVXQZLOOLQJWR work for the company at completion of his or her studies the bursary often has to be paid back with interest. Such conditions are seldom attached to normal training offered at the workplace. 3.2.4 Employment Equity and the ‘War for Talent’ Sectoral BEE (and more recently BBBEE) charters typically dictate employment equity WDUJHWVIRULQGXVWULHV+RZHYHULWFDQEHDUJXHGWKDWHPSOR\PHQWHTXLW\UHTXLUHPHQWVKDYH biased remuneration packages of previously disadvantaged individuals with desired skills and H[SHULHQFHXSZDUGV$VIDUDVWKHLQWDNHRISUHYLRXVO\GLVDGYDQWDJHGJUDGXDWHVLVFRQFHUQHG 8 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey ¿UPVJHQHUDOO\IHHOWKDWWKHUHLVQRVKRUWDJHRIJUDGXDWHVZLWKsuitableTXDOL¿FDWLRQV+RZHYHU when it comes to Black students with good qualityTXDOL¿FDWLRQVDQGDERYHDYHUDJHJUDGHVLQ FHUWDLQVWXG\DUHDVLQSDUWLFXODU¿UPVDUHH[SHULHQFLQJVKRUWDJHV 0DQXIDFWXULQJ¿UPVIRXQGLWHVSHFLDOO\GLI¿FXOWWR¿QGJRRGTXDOLW\%ODFNFDQGLGDWHVZLWK HQJLQHHULQJVFLHQFHDQGLQIRUPDWLRQWHFKQRORJ\TXDOL¿FDWLRQV:KLOHHTXLW\WDUJHWVDUHPRUH HDVLO\UHDFKHGLQWKH¿QDQFHDQGEXVLQHVVVHFWRUVJLYHQUHODWLYHO\ODUJHHQUROPHQWRI%ODFN VWXGHQWVLQFRPPHUFHGLVFLSOLQHV%ODFNVWXGHQWVZLWKJRRG¿QDQFHDQGDFFRXQWDQF\JUDGHV DUHVWLOOKDUGWRFRPHE\7KLVLVHVSHFLDOO\WUXHIRU$IULFDQ%ODFNVWXGHQWV ¿UPVLQGLFDWHWKDW WKH\JHQHUDOO\KDYHOHVVWURXEOH¿QGLQJ,QGLDQDQG&RORXUHGVWXGHQWV7KHSRRUSHUIRUPDQFH and high failure rate of Black students at tertiary institutions has become somewhat of a national concern and has led to the a joint research initiative between the Association for Black Empowerment in Higher Education (ABEHE) and the Human Sciences Research Council (HSRC) on the matter. $QRWKHUFRQFHUQUDLVHGE\¿UPVUHODWHVWRVRIWVNLOOVDQGZRUNSODFHUHDGLQHVVVSHFL¿FDOO\ among students from historically Black institutions. For many the transition from poor quality VFKRROLQJWRWHUWLDU\LQVWLWXWLRQVLVDGLI¿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¿QGWKDWJHQHUDOO\VSHDNLQJ VWXGHQWVZKRFRPHIURPKLVWRULFDOO\:KLWHLQVWLWXWLRQVERWK%ODFNDQG:KLWHDUHEHWWHU SUHSDUHGIRUWKHZRUNSODFHERWKLQWHUPVRIVRIWVNLOOVDQGZRUNH[SHULHQFHDQGWKHUHIRUH are better able to adapt to corporate environments. Although there is no hard evidence for WKLVLWLVFOHDUWKDWWKLVGLIIHUHQWLDOVLJQDOOLQJLVLQSDUWDIXQFWLRQRIVWXGHQWVDWKLVWRULFDOO\ %ODFNLQVWLWXWLRQVDVRSSRVHGWRKLVWRULFDOO\:KLWHLQVWLWXWLRQVLUUHVSHFWLYHRIUDFHKDYLQJ H[SHULHQFHGGLVWLQFWO\ORZHUTXDOLW\VFKRROLQJUHODWLYHWRWKHLUFRXQWHUSDUWVDWKLVWRULFDOO\:KLWH institutions. The high mobility of young Black graduates is further cause for concern given employment HTXLW\WDUJHWVDQGWKHZDUIRUWDOHQWLQWKLVFRXQWU\0RVW¿UPVUHSRUWDKLJKHUWKDQDYHUDJH WXUQRYHUUDWHIRU\RXQJ%ODFNZRUNHUVHVSHFLDOO\WKRVHZLWKVRXJKWDIWHUTXDOL¿FDWLRQVVXFK DVHQJLQHHULQJDQGVFLHQFHGHJUHHV2IWHQKLJKFDOLEUH%ODFNHPSOR\HHVZLWKVFDUFHVNLOOV GRQRWVWD\LQSRVLWLRQVORQJHQRXJKWRJDLQWKHQHFHVVDU\H[SHULHQFHEHIRUHEHLQJRIIHUHG PRUHOXFUDWLYHSRVLWLRQVE\ULYDO¿UPV3RDFKLQJRIWKLVQDWXUHFRPHVDWDVHULRXVFRVWWRWKH HFRQRP\ERWKLQWHUPVRIUHFUXLWPHQWFRVWV LWFDQHDVLO\FRVWDQHPSOR\HUXSWR5 WRKHDGKXQWDSURVSHFWLYHHPSOR\HH DQGVNLOOVORVWWRVSHFL¿FLQGXVWULHVZKHQSHRSOHPRYH EHWZHHQLQGXVWULHV2QHRIWKHPLQLQJ¿UPVIRUH[DPSOHQRWHGWKDWPDQ\PLQHPDQDJHUV 9 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen DUHEHLQJSRDFKHGE\WKH¿QDQFHLQGXVWU\IRUWKHLUJRRGPDQDJHULDOVNLOOV+RZHYHUPRUH LPSRUWDQWO\KLJKPRELOLW\HVSHFLDOO\HDUO\RQLQDFDUHHUFDQDOVREHKDUPIXOWRWKHLQGLYLGXDO who never fully realises his or her potential. The long run risk is that these individuals become unattractive to prospective employers due to the perceived risk of employing them and LQYHVWLQJLQWKHLUWUDLQLQJ,QUHVSRQVHWRKLJKWXUQRYHUUDWHVPDQ\¿UPVKDYHDJJUHVVLYH retention strategies in place. *LYHQWKHVL]HRIWKH¿UPVLQWHUYLHZHGPDQ\DUHDEOHWRRIIHUUHPXQHUDWLRQSDFNDJHVDERYH WKHLQGXVWU\DYHUDJHVZKLFKWRVRPHH[WHQWUHGXFHODERXUWXUQRYHUUDWHV$OWKRXJKWKLVLVD VXFFHVVIXOZD\RIUHGXFLQJODERXUWXUQRYHUE\FRXQWHULQJSRDFKLQJLWVHQGVWKHZURQJVLJQDOV $VDUHVXOWVRPH¿UPVIHHOWKDWFHUWDLQµXQIDLU¶UHFUXLWPHQWSUDFWLFHVVKRXOGEHUHJXODWHG$OVR WDOHQWPDQDJHPHQWVKRXOGEHFRPHDNH\SHUVRQQHOPDQDJHPHQWIXQFWLRQLQ¿UPVDQG\RXQJ appointees should be educated about the dangers of changing jobs too regularly. 3.2.5 Graduate Expectations 0RVW¿UPVLQGLFDWHGWKDWWKHH[SHFWDWLRQVRIJUDGXDWHVSDUWLFXODUO\XQLYHUVLW\JUDGXDWHV DUHWRRKLJK(PSOR\HUVKRZHYHUIHHOWKDWWKHUHWXUQWRHPSOR\LQJDJUDGXDWHLVORZJLYHQ that graduates require substantial on-the-job training before they provide optimal returns. In DGGLWLRQPDQ\¿UPVLQGLFDWHGWKDWWKHVHH[SHFWDWLRQVDUHXQMXVWL¿HGSDUWLFXODUO\EHFDXVH RIWKHOLPLWHGH[SHULHQWLDOWUDLQLQJRIJUDGXDWHV6RPH¿UPVDOVRLQGLFDWHGWKDWJUDGXDWHV H[SHFWWKHLUTXDOL¿FDWLRQVWRRSHQGRRUVDWPLGGOHPDQDJHPHQWOHYHODQGDUHRIWHQXQZLOOLQJ or unhappy to start at entry-level. Firms feel that it is necessary for graduates to have a more UHDOLVWLFYLHZRIZKDWWKH\FDQRIIHUDQGZKDWWRH[SHFWIURPWKHLU¿UVWMREV ,QDGGLWLRQDVDUJXHGLQWKHSUHYLRXVVHFWLRQFXUUHQWODERXUPDUNHWUHTXLUHPHQWVKDYHELDVHG UHPXQHUDWLRQSDFNDJHVXSZDUGV+RZHYHUVRPH¿UPVIHHOWKDWWKHFKURQLFVKRUWDJHVRI%ODFN university graduates are starting to subside and remuneration priced more realistically. Yet PDQ\JUDGXDWHVVWLOOH[SHFWKLJKVWDUWXSSDFNDJHV 3.3 Incentive Schemes aimed at Promoting Employment and Training 3.3.1 The National Skills Development Strategy The National Skills Development Strategy (NSDS) was launched in February 2001 with the aim of transforming education and training in South Africa by improving both the quality and quantity of training. The responsibility of implementing the NSDS rests with the National Skills Fund (NSF) and the Sector Education and Training Authorities (SETAs). Under the Skills 'HYHORSPHQW$FWRI 5HSXEOLFRI6RXWK$IULFD 6(7$VZHUHHVWDEOLVKHGLQ March 2000.87KH6NLOOV'HYHORSPHQW/HYLHV$FWRI 5HSXEOLFRI6RXWK$IULFD 8 There are currently 23 SETAsdue to the merger of some of the SETAs in 2005. 10 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey requires that employers with an annual payroll of greater than R250 000 pay 1 per cent of the value of their payroll to the South African Revenue Services (SARS).92IWKHOHY\SHUFHQW is transferred to the relevant SETA and the remaining 20 per cent is transferred to the NSF. (PSOR\HUVFDQFODLPEDFNDPD[LPXPRISHUFHQWRIWKHRULJLQDOSHUFHQWOHY\LQWKH form of mandatory grants and 20 per cent in the form of discretionary grants. The remaining 10 per cent is retained by the SETA for administration. One of the functions of SETAs is to develop and register learnership programmes. /HDUQHUVKLSVDUHVSHFL¿FDOO\DLPHGDWDVVLVWLQJQHZHQWUDQWVLQWRHPSOR\PHQWE\SURYLGLQJ them with skills and improving their chances of finding or creating work. The learnership V\VWHPLVGHULYHGIURPWKHDSSUHQWLFHVKLSV\VWHP ZKLOHLQFRXQWULHVOLNHWKH8.$XVWUDOLD DQG*HUPDQ\WKHVHUHWRROHGDSSUHQWLFHVKLSVEHFDPHNQRZQDVµ0RGHUQ$SSUHQWLFHVKLSV¶ in South Africa they became known as learnerships (Smith et al. 7KHSXUSRVH RIOHDUQHUVKLSVLVWKUHHIROG WRSURYLGHZRUNSODFHOHDUQLQJE\DQDFFUHGLWHGWUDLQLQJSURYLGHU WRHQVXUHWKHOLQNEHWZHHQVWUXFWXUHGOHDUQLQJDQGZRUNH[SHULHQFHDQGWRHQVXUHWKDW training culminates in a nationally recognised qualification. The qualification obtained via DOHDUQHUVKLSLVUHJLVWHUHGRQWKH1DWLRQDO4XDOL¿FDWLRQV)UDPHZRUN 14) E\WKH6RXWK $IULFDQ4XDOL¿FDWLRQV$XWKRULW\ 6$4$ 7KHEXLOGLQJEORFNVRIOHDUQHUVKLSVDUHXQLWVWDQGDUGV Employers implementing learnership agreements can claim back discretionary grants from the UHOHYDQW6(7$DQGLQDGGLWLRQDUHHQWLWOHGWRWD[EUHDNV7KHVHLQFHQWLYHVDUHW\SLFDOO\KLJKHU for unemployed learners. %\0DUFKDWRWDOQXPEHURI XQHPSOR\HGSHRSOHEHORZWKHDJHRIKDG HQWHUHGLQWROHDUQHUVKLSDSSUHQWLFHDJUHHPHQWVZHOODERYHWKHWDUJHWRIVHWRXWLQWKH NSDS. Figure 1 shows the rapid growth in the number of learners between 2002/3 and 2004/5. +RZHYHUKRZPDQ\SHRSOHKDYHVXFFHVVIXOO\FRPSOHWHGWKHLUOHDUQHUVKLSVSURJUDPPHVDQG IRXQGHPSOR\PHQWLVXQFOHDU HPSOR\HUVDUHQRWREOLJHGWRHPSOR\OHDUQHUVSRVWOHDUQHUVKLS DOWKRXJK-HQQLQJVHWDO FLWHGLQ'HSDUWPHQWRI/DERXUD DQG6PLWKHWDO give some indication of the trends. There has also been much concern about the functioning DQGHIIHFWLYHQHVVRI6(7$VDQGWKHOHDUQHUVKLSV\VWHPDVZHOODVWKHSHUFHLYHGTXDOLW\RI learnership programmes in some cases given that SETAs have received substantial funding through collection of skills levies as well as the NSF. 9 Employers paying annual remuneration of less than R500 000 are exempt from skills development levies from 1 August 2005. 11 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen Figure 1: Total Number of Learners on Learnership Programmes Source: Department of Labour (2005, 2006a) The Skills Development Act of 1998 effectively repealed the Manpower Training Act of 1981 5HSXEOLFRI6RXWK$IULFD ZKLFKJRYHUQHGDSSUHQWLFHVKLSV+RZHYHUVFKHGXOHWZRLQ the Skills Development Act made provision for those sections in the Manpower Training Act pertaining to apprenticeships to remain in force until the Minister repealed them by notice in WKH*RYHUQPHQW*D]HWWH7KH$FWWKHUHIRUHVHHPHGWRVXJJHVWWKDWDSSUHQWLFHVKLSVZHUH being phased out and replaced with learnerships. Adding to these suspicions is the fact that learnerships have a much broader scope in terms of the coverage of occupations and thus in a sense encompass apprenticeships (see section 3.4 for more): v /HDUQHUVKLSVDUHSHULRGERXQGDQGOLQNHGWRVSHFL¿F6$4$UHJLVWHUHGTXDOL¿FDWLRQV 14) UHFRJQLVHG 7KH VFRSH RI FRYHUDJH LV IRU DOO SRVVLEOH TXDOL¿FDWLRQV DSSUR[LPDWHO\ v $SSUHQWLFHVKLSV DUH DOVR OLQNHG WR D TXDOL¿FDWLRQ EXW WKHVH DUH QRW QHFHVVDULO\ 6$4$ UHJLVWHUHG $SSUHQWLFHVKLSV DUH IXUWKHU OLQNHG VSHFL¿FDOO\ WR GHVLJQDWHG DUWLVDQWUDGHV DSSUR[LPDWHO\ 7KHIDFWWKDWDSSUHQWLFHVKLSVDUHQRW6$4$ accredited should not be seen as a distinct disadvantage of apprenticeships. 6$4$ DFFUHGLWDWLRQ LPSOLHV EDVLFDOO\ WKDW TXDOL¿FDWLRQV DUH DOLJQHG WR WKH 14) ZKHUHDVDSSUHQWLFHVKLSTXDOL¿FDWLRQVDUHQRWQHFHVVDULO\ DOWKRXJKLQUHDOLW\WKH\ DUHHTXLYDOHQWWR14)WROHYHOV 7KH6$4$TXDOL¿FDWLRQVDUHDOVRWUDQVIHUDEOH EHWZHHQLQGXVWULHVZKLFKPDNHVLWSHUKDSVPRUHDWWUDFWLYHWRMREVHHNHUV+RZHYHU DSSUHQWLFHVKLS TXDOL¿FDWLRQV DUH DOVR QDWLRQDOO\ DQG VRPHWLPHV LQWHUQDWLRQDOO\ UHFRJQLVHGEXWRIWHQRQO\ZLWKLQWKHVSHFL¿FLQGXVWU\LQZKLFKWKH\ZHUHREWDLQHG. 12 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey 3.3.2 Firm Responses to Learnerships, Apprenticeships and Workplace Training 'XULQJWKHLQWHUYLHZV¿UPVZHUHDVNHGDERXWWKHHIIHFWLYHQHVVRIWKHOHDUQHUVKLSV\VWHPLQ absorbing more graduates and/or young unemployed people. Respondents were also asked to talk about workplace training in general and comment on the incentive systems that in are SODFH7KHIRFXVZDVPRVWO\RQOHDUQHUVKLSVDOWKRXJKDSSUHQWLFHVKLSVDUHVWLOOIDYRXUHGLQ VRPHRIWKHPDQXIDFWXULQJVHFWRU¿UPV As noted in the preceding section a large number of learnerships have been registered and many people have been put onto learnerships during the last few years. Learnerships have the dual objective of improving the skills of the general workforce and at the same time increasing employment directly (in the sense that the grants act as an employment subsidy) or indirectly (in that learners generally become more employable and are thus employed on completion of WKHOHDUQHUVKLS /HDUQHUVKLSVDUHJHQHUDOO\WDUJHWHGDWERWKWKHHPSOR\HGDQGXQHPSOR\HG although the grants available for unemployed learners are higher. About two-thirds of learners LQ6RXWK$IULFDDUHRI¿FLDOO\FODVVL¿HGDVXQHPSOR\HGOHDUQHUV VHH)LJXUHLQ$SSHQGL[$ and Smith et al. (2005) for more). +RZHYHULQGLFDWLRQVIURPRXULQWHUYLHZVDUHWKDWWKHVHUHSUHVHQWSHRSOHWKDWWKH¿UPVZRXOG KDYHKLUHGDQ\ZD\$VVXFKOHDUQHUVKLSJUDQWVDUHLQDVHQVHDZLQGIDOOJDLQDV¿UPVSUREDEO\ ZRXOGKDYHWUDLQHGWKHVHZRUNHUVDQ\ZD\$OWKRXJKKDUVKFULWLFVPD\VHHWKLVDVDIDLOXUH of the learnerships in its objective of increasing employment levels over and above what the HPSOR\PHQWOHYHOZRXOGKDYHEHHQLQWKHDEVHQFHRIWKHLQFHQWLYHV\VWHP3XWGLIIHUHQWO\WKH learnership programme on current evidence has done little to increase employment above the H[LVWLQJPDUNHWHTXLOLEULXPOHYHORIHPSOR\PHQW 7KHLGHDRIWKHOHDUQHUVKLSV\VWHPZDVWKDWVRPH¿UPVZRXOGXWLOLVHHFRQRPLHVRIVFDOHDQG offer workplace training to more learners than they could or wanted to absorb themselves. +RZHYHULWDSSHDUVDVLILQFHQWLYHVDUHQRWKLJKHQRXJKDVYHU\IHZILUPVWUDLQµIRUWKH PDUNHW¶0RVW¿UPVSUHIHUWROLQNOHDUQHUVKLSVWRWKHLUDFWXDOUHFUXLWPHQWVWUDWHJLHVZLWKWKH LQWHQWLRQRIHPSOR\LQJDOOOHDUQHUVXSRQFRPSOHWLRQ7KLVREYLRXVO\H[SODLQVZK\WKHUHLVQR net employment effect over and above what normal absorption would have been. This is also XQGHUVWDQGDEOH DVRQHUHVSRQGHQWVDLGKHKDWHVWKHLGHDRIRIIHULQJWUDLQLQJWROHDUQHUV but then having to turn them away once they complete the training. Not only is it stressful to OHDUQHUVDVWKH\KDYHWRORRNIRUQHZHPSOR\PHQWRSSRUWXQLWLHVEXWWKH¿UPVSURYLGLQJWKH workplace training are left to deal with the disappointment. A policy option that may be considered is the idea of a marginal subsidy. This involves offering KLJKHUVXEVLGLHVWR¿UPVZKRLQFUHDVHWKHLQWDNHRIOHDUQHUVRYHUDQGDERYHWKHLQWDNHRI WKHSUHYLRXV\HDU$VGLVFXVVHGLQVHFWLRQ¿UPVVXJJHVWHGWKH\ZRXOGRQO\FRQVLGHU LQFUHDVLQJWKHQXPEHURIOHDUQHUVLIDOOFRVWVZHUHFRYHUHG7KLVLQFOXGHVWKH¿QDQFLDOFRVWV DVVRFLDWHGZLWKWUDLQLQJSURYLVLRQDVZHOODVWKHDGPLQLVWUDWLYHEXUGHQDVVRFLDWHGZLWK 13 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen LPSOHPHQWLQJDQGUXQQLQJWKHOHDUQHUVKLSSURJUDPPH VHH%R[IRUPRUHLQIRUPDWLRQ (YLGHQFHSUHVHQWHGE\6PLWKHWDO GRHVVHHPWRLQGLFDWHWKDWWKHWD[EUHDNVDUH acting as an incentive to at least enrol staff members in formal training programmes: about 75 SHUFHQWRIUHVSRQGHQWVLQD¿UPVXUYH\FRQGXFWHGE\WKHVHDXWKRUVLQGLFDWHGWKDWWKH\ZHUH LQYROYHGLQOHDUQHUVKLSVEHFDXVHRIWKHWD[LQFHQWLYHV7KXVDOWKRXJKQHWHPSOR\PHQWOHYHOV DUHSHUKDSVQRWLQFUHDVHGE\WKHOHDUQHUVKLSV\VWHPPRUHSHRSOHDUHIRUPDOO\WUDLQHGDQG DFTXLUH6$4$UHFRJQLVHGTXDOL¿FDWLRQV)LUPVDUHJHQHUDOO\YHU\SRVLWLYHDERXWWKHLPSDFW OHDUQHUVKLSVKDYHRQVNLOOVDWWKH¿UPOHYHOZKLFKFHUWDLQO\LPSOLHVWKDWOHDUQHUVKLSVDUH successful in achieving the primary goal of improving skills of the workforce. Some general comments by respondents that are relevant in this regard include the following: v 6RPH ¿UPV SDUWDNH LQ WKH SURFHVV EHFDXVH RI WKHLU LQGXVWU\¶V %(( FKDUWHU prescriptions and the BEE points that they can earn for offering learnerships. 0DQ\UHVSRQGHQWVVXJJHVWHGWKDWOHDUQHUVKLSVDUHWRRH[SHQVLYHIRUVPDOO¿UPV to implement. One solution is for large companies to offer learnerships that are OLQNHGWRHPSOR\PHQWRSSRUWXQLWLHVDWVPDOOHU¿UPV7KHVHFRXOGIRUH[DPSOH LQFOXGHVPDOO¿UPVWKDWDUHOLQNHGWRWKHODUJH¿UPDVDVXSSOLHU XSVWUHDP RU client (downstream). A number of respondents suggested that much greater FROODERUDWLRQ LV QHHGHG EHWZHHQ ODUJH DQG VPDOO ¿UPV DV SURSHU XWLOLVDWLRQ RI FDSDFLW\DWWUDLQLQJIDFLOLWLHVDWODUJH¿UPVFRXOGOHDGWRDZLQZLQVLWXDWLRQIRUDOO v Learnerships are not the only solution to creating employment and bridging the VNLOOVGH¿FLW,WLVDOVRQRWDV\VWHPWKDWVXLWVDOOLQGXVWU\W\SHV,QVRPHLQGXVWULHV DSSUHQWLFHVKLSVZLWKDPRUHSUDFWLFDOIRFXVPD\SHUKDSVZRUNEHWWHU DUWLVDQV technologists) while in other instances a more academic approach is perhaps SUHIHUUHG DFFRXQWLQJ DUWLFOH FOHUNV 2IWHQ ¿UPV ZRXOG SUHIHU WR RIIHU UHOHYDQW practical training that is not necessarily linked to a SAQA recognised academic TXDOL¿FDWLRQ7KLVLGHDLVH[SORUHGLQPRUHGHWDLOLQVHFWLRQ v %XUVDU\VFKHPHVDUHXWLOLVHGE\PDQ\ODUJHU¿UPVHLWKHUDVDFRUSRUDWHVRFLDO investment or as core part of the recruitment process. The latter should be encouraged and perhaps even subsidised by the state as an alternative to OHDUQHUVKLSV RU ZDJH VXEVLGLHV ,I EXUVDUV DUH H[SHFWHG WR GR YDFDWLRQ ZRUN as part of the requirements of the bursary contract it becomes very similar to a OHDUQHUVKLSVFKHPHEXWSRWHQWLDOO\OHVVFRVWO\VLQFHWKHDFDGHPLFDVVHVVPHQW WDNHVSODFHRXWVLGHWKH¿UPDWWKHHGXFDWLRQDOLQVWLWXWLRQ6XFKEXUVDU\VFKHPHV VKRXOGSUHIHUDEO\EHIXQGHGRYHUDQGDERYHH[LVWLQJVWDWHEXUVDU\VFKHPHV2QH SRVVLELOLW\LVWR¿QDQFHDQGDGPLQLVWHUWKLVIXQGLQJWKURXJKWKH1DWLRQDO6NLOOV)XQG 16) FRQWULEXWLRQVPDGHE\¿UPVDVSDUWRIWKHVNLOOVOHY\SDLGWR6(7$V7KH NSF is already involved in education funding in terms of its National Students 14 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey 3.3.3 Learnerships and Graduate Absorption /HDUQHUVKLSVDUHJHQHUDOO\QRWWDUJHWHGDWJUDGXDWHVLQWKHSXUHVHQVHRIWKHZRUGLH XQLYHUVLW\RUXQLYHUVLW\RIWHFKQRORJ\JUDGXDWHV'XULQJWKHLQWHUYLHZV¿UPVVXJJHVWHGWKDW graduates are often reluctant to enrol for learnerships since further training of this nature LVµEHQHDWKWKHP¶7KHUHLVDSHUFHSWLRQWKDWOHDUQHUVKLSVKDYHVLPSO\UHSODFHGZRUNSODFH WUDLQLQJEDVHGRQWKHDSSUHQWLFHVKLSV\VWHPZKLFKZDVVSHFLILFDOO\WDUJHWHGDWDUWLVDQV DQGWKHORZHU14)OHYHO RUHTXLYDOHQW TXDOL¿FDWLRQV$VDUHVXOWOHDUQHUVKLSVKDYHDNLQG RIDµEOXHFROODUZRUNHU¶ODEHO This suggests that learnerships at present are not necessarily geared towards relieving the JUDGXDWHXQHPSOR\PHQWSUREOHPSHUVH v Many graduates lack soft skills and are not workplace ready when they start their FDUHHUVLQWKHFRUSRUDWHVHFWRU,QIDFWWKLVZDVKLJKOLJKWHGDVDUHDVRQZK\PDQ\ graduate are unsuccessful already in the recruitment phase (see section 3.2). +RZHYHUVRPH¿UPVKDYHVWDUWHGXVLQJOHDUQHUVKLSVVXFFHVVIXOO\DVDZD\WREULGJH WKHµVRIWVNLOOVGH¿FLW¶DQGQDUURZWKHJDSEHWZHHQWKHZRUNSODFHHQYLURQPHQWDQG VWXGHQWOLIH9DULRXVVRIWVNLOOVOHDUQHUVKLSSURJUDPPHVDUHDYDLODEOHIRUH[DPSOH the Mentoring Programme (NQF 3 to 5 covered) offered by the Reach Africa Group (a training provider) in conjunction with the Services SETA (see www.reachafrica@ iafrica.com). v Another problem frequently raised by employers was the fact that students often JUDGXDWHZLWKLQDSSURSULDWHGHJUHHV)LUPVIUHTXHQWO\GHPDQGSHRSOHZLWK¿QDQFLDO EDFNJURXQGVRUPRUHWHFKQLFDOTXDOL¿FDWLRQVVXFKDVVFLHQFHDQGHQJLQHHULQJ 2QHRIWKHDXGLWLQJ¿UPVLQWHUYLHZHGVDLGWKH\ZHUHLQWKHSURFHVVRIGHYHORSLQJ a learnership based on similar principles as the so-called CA conversion course at the University of Cape Town. This is a one-year course that allows graduates with QRQFRPPHUFH ¿UVW GHJUHHV WR FRQYHUW WR D %&RP $FFRXQWLQJ GHJUHH ZLWKLQ RQH\HDUHQDEOLQJWKHPWRWKHQDSSO\IRUDUWLFOHFOHUNSRVLWLRQVDWDXGLWLQJ¿UPV 6XFKDSURJUDPPHFDQHDVLO\EHLPSOHPHQWHGDVDOHDUQHUVKLSDWD¿UPZLWKWKH university as the training provider. v Another way in which learnerships can be used to absorb more graduates with less DSSURSULDWH TXDOL¿FDWLRQV LV LQ WKH %XVLQHVV 3URFHVV 2XWVRXUFLQJ %32 VHFWRU VHH%R[ 0DQ\¿UPVLQFOXGLQJWHOHFRPPXQLFDWLRQVDQG¿QDQFLDODQGEXVLQHVV VHUYLFHV¿UPVDUHHQUROOLQJJUDGXDWHVZLWKQRQWHFKQLFDOTXDOL¿FDWLRQVEXWZLWK some IT skills in call centre learnerships where they quickly learn basic business and 10 The issue of learnerships for middle-management occupations (NQF levels 6 to 8) is explored further in section 3.4.2 15 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen FRPPXQLFDWLRQVNLOOVSHUWDLQLQJWRWKHVSHFL¿FFDOOFHQWUHZRUNWKDWWKH\SHUIRUP 7KLVSUHVHQWVDZRQGHUIXORSSRUWXQLW\WRJUDGXDWHVWRHQWHUWKHZRUNSODFHJDLQ YDOXDEOHH[SHULHQFHDQGPRYHRQWREHWWHURSSRUWXQLWLHV 16 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey ! " # ! $ "#!$#" % & '' "#!$#" ())* # " + + + #"+++ ,-! & # " $ -! $+ #"+++ , # " # " % . , / % ' . . . 0 1) 2) 3 0 & ()) ))) 2)) ))) & # " $ # " . *2 ))) 4)) ))) & 56) 5472 89$ 4: 02 # 3 ' & % ; ! + 3 & ; " #"+++ , & . " #" < . 17 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen 3.3.4 Administration and Costs of Learnerships 7KH FRPSOH[ EXUHDXFUDWLF SURFHVVHV VXUURXQGLQJ WKH HVWDEOLVKPHQW RI OHDUQHUVKLS programmes and the enrolment and assessment of learners were frequently raised as a major EDUULHUWRH[SDQGLQJOHDUQHUVKLSV,QVRPHLQVWDQFHVWKHSURFHVVRIVHWWLQJXSDQGUHJLVWHULQJ OHDUQHUVKLSVLVVHHQDVWRRFXPEHUVRPHWRPDNHLWDZRUWKZKLOHH[HUFLVH$WWKH6(7$OHYHO PLVPDQDJHPHQWLQHIILFLHQFLHVDQGKLJKVWDIIWXUQRYHUUDWHVZHUHVRPHRIWKHSUREOHPV PHQWLRQHG7KLVZDVDFRPPRQVHQWLPHQWDFURVVDOO¿UPV7KHIHZ¿UPVWKDWIHOWWKHSURFHVV ZDVIDLUO\VWUDLJKWIRUZDUGW\SLFDOO\KDYHUHSUHVHQWDWLRQRQWKH6(7$ERDUGVZKLFKLPSOLHV WKH\KDYHEHWWHUNQRZOHGJHRIWKHSURFHGXUHV,QDGGLWLRQWKHVDPSOHRI¿UPVLQWHUYLHZHG represent those that typically have the resources and capacity to deal with SETA problems as FRPSDUHGWRVPDOOHU¿UPVZKRGRQRWKDYHWKHUHVRXUFHVDQGFDSDFLW\\HWPDQ\RIWKH¿UPV ¿QGWKH6(7$HQYLURQPHQWDGLI¿FXOWHQYLURQPHQWLQZKLFKWRIXQFWLRQZLWKRQH¿UPJRLQJDV IDUDVWRFDOOWKHSURFHVVDµQLJKWPDUH¶ ,QFHQWLYHVIRUWKHSULYDWHVHFWRUWRUHJLVWHUOHDUQHUVKLSVFRPHLQWKHIRUPRIWD[EUHDNVDQG learnership grants. Companies who take on previously unemployed learners are entitled to a WD[EUHDNRIDPD[LPXPRI5SHUOHDUQHU5FODLPDEOHLQWKH\HDURIHQUROPHQW DQG5FODLPDEOHLQWKH\HDURIFRPSOHWLRQ)RUWKRVHWKDWWDNHRQHPSOR\HGOHDUQHUV SHUFHQWRIWKHLQLWLDO5PD\EHFODLPHG)URP0DUFKWKHPD[LPXPLQLWLDO DOORZDQFHVIRUH[LVWLQJHPSOR\HHVLQFUHDVHGWR5 XSIURP5 DQGWR5 IRUQHZHPSOR\HHV XSIURP5 7KHPD[LPXPDOORZDQFHXSRQWKHFRPSOHWLRQRIWKH learnership increased from R25 000 to R30 000.11 The other incentive offered is a grant for putting people onto learnerships. The actual size of WKHJUDQWLVGHWHUPLQHGE\WKH6(7$V7KHJUDQWVDUHPDQDJHGDQGGLVEXUVHGE\WKH6(7$V WKHDPRXQWGHSHQGLQJRQWKHOHYHORIFRPSOH[LW\RIWKHOHDUQHUVKLSWKHLQSXWFRVWVWKH GLI¿FXOW\DVVRFLDWHGZLWKFRQYLQFLQJHPSOR\HUVWRWDNHRQOHDUQHUVHWF7KHJUDQWLVPHDQWWR FRYHUWKHOHDUQHUDOORZDQFHDVZHOODVWKHFRXUVHIHHVIRUWKHWUDLQLQJDQGRWKHUDVVRFLDWHG costs. The grants for taking unemployed people onto learnerships are typically higher than for taking on employed people. Firms generally indicated that the incentives were well below aggregate actual direct costs ERUQHE\¿UPVZKLFKLQFOXGHVWLSHQGVWUDLQLQJPDWHULDOVDQGWXLWLRQFRVWV:KHQDGGLQJ WKH LQGLUHFW FRVWV VXFK DV VWDII DGPLQLVWUDWLYH DQG LQIUDVWUXFWXUDO UHTXLUHPHQWV WKH net cost per learner becomes substantial. Few firms could provide accurate estimates of the net cost of learnerships. Crude estimates of the net operating cost per learner per year were in the region of R35 000. When also accounting for staff and infrastructure 11 More favourable allowances were also introduced to promote the enrolment of disabled learners (National Treasury, 2006a). 18 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey UHTXLUHPHQWVWKHDFWXDOEXGJHWRXWOD\LQFUHDVHGWRDERXW5SHUOHDUQHUSHU\HDU12 7KHPDMRULW\RIILUPVLQWHUYLHZHGLQGLFDWHGWKDWWKH\FRXOGRQO\H[SDQGWKHLUOHDUQHUVKLS SURJUDPPHVLIWKHJUDQWVZHUHLQFUHDVHGWRVXFKDQH[WHQWWKDWDOODGPLQLVWUDWLYHFRVWVZHUH FRYHUHGVLQFHWKHFXUUHQWLQWDNHRIOHDUQHUVZHUHLQYDULDEO\EDVHGRQWKH¿UPV¶QHHGV7KLV UDLVHVWKHLVVXHRIPDUJLQDOVXEVLGLHVDVDSROLF\RSWLRQ VHHH[DPSOHLQVHFWLRQ Anecdotal evidence presented by many of the respondents suggested that high start-up costs SUHYHQWHGPDQ\VPDOO¿UPVIURPVHWWLQJXSDQGRIIHULQJOHDUQHUVKLSV2IWHQODUJH¿UPVKDYH one or two full-time staff members that are dedicated to dealing with SETAs and taking care RIWKHDGPLQLVWUDWLYHUHTXLUHPHQWVUHODWHGWROHDUQHUVKLSV6PDOOHU¿UPVFDQQRWDIIRUGVXFK H[SHQGLWXUHV7KHVDPHJRHVIRUWUDLQLQJSURYLGHUV VPDOOHUWUDLQLQJSURYLGHUVFDQQRWDIIRUGWR DSSO\IRUDFFUHGLWDWLRQDQGRIWHQORVHRXWRQWUDLQLQJFRQWUDFWVEHFDXVHRIWKLV6PDOO¿UPVSOD\ DYHU\LPSRUWDQWUROHLQFUHDWLQJHPSOR\PHQWRSSRUWXQLWLHVEXWWKHFXUUHQWOHDUQHUVKLSV\VWHP LVGHVLJQHGLQVXFKDZD\WKDWLWLVGLI¿FXOWIRUVPDOOHU¿UPVWRSDUWLFLSDWH )LQDOO\DWDQLQVWLWXWLRQDOOHYHOPDQ\¿UPVIHOWWKDWEHWWHUFRRUGLQDWLRQDQGFODULW\ZDVQHHGHG about the respective roles of the Departments of Labour and Education in the learnership V\VWHP6LQFHOHDUQHUVKLSVLQYROYHERWKHGXFDWLRQDQGHPSOR\PHQWDUHDVRIRYHUODSUHTXLUH constant and consistent collaboration between the Department of Labour and the Department RI(GXFDWLRQZKLFKPDQ\UHVSRQGHQWVIHOWZDVODFNLQJ $ULVLQJRXWRIWKHDERYHVRPHRIWKHSROLF\LPSOLFDWLRQVLQFOXGH v ([SORULQJ ZD\V RI VLPSOLI\LQJ WKH EXUHDXFUDWLF SURFHVVHV RI WKH 6(7$V ZLWKRXW FRPSURPLVLQJ WKH FUHGLELOLW\ RI WKH TXDOL¿FDWLRQ REWDLQHG WKURXJK D OHDUQHUVKLS This is perhaps the greatest challenge and many feel that there is no real solution RWKHUWKDQWRJLYH¿UPVPRUHUHVSRQVLELOLW\DQGWUXVWLQJWKHPPRUHLQDZDUGLQJ TXDOL¿FDWLRQV 6LPSOL¿FDWLRQ ZLOO DOVR UHGXFH FRVWV ZKLFK ZLOO DOVR DOORZ JUHDWHU EX\LQIURPVPDOOHU¿UPV v Reviewing the cost of providing training and education via a learnership programme by vesting administrative control and authority with registered education and WUDLQLQJ SURYLGHUV 7KH LQIUDVWUXFWXUDO DQG VWDI¿QJ UHTXLUHPHQWV RI OHDUQHUVKLSV RIIHUHGDW¿UPVDUHHQRUPRXV(GXFDWLRQDOLQVWLWXWLRQVSHUKDSVKDYHDFRPSHWLWLYH advantage in administering the process of assessing the academic performance RIVWXGHQWVDQGDZDUGLQJTXDOL¿FDWLRQV)LUPVVKRXOGEHDOORZHGWRIRFXVRQZKDW WKH\GREHWWHUQDPHO\SURYLVLRQRIZRUNSODFHWUDLQLQJDQGSUDFWLFDOH[SHULHQFH 12 Note that these figures may not be reliable averages across all industries and firms. 19 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen v 7KHIDFWWKDWOHDUQHUVKLSVDUHOLQNHGWRDQDFDGHPLFTXDOL¿FDWLRQPDNHVLWDQRYHO LGHD WUDQVIHUDELOLW\ RI D TXDOL¿FDWLRQ DFURVV LQGXVWULHV EXW LW DOVR LQWURGXFHV DGPLQLVWUDWLYHFRPSOH[LWLHV XQLWVWDQGDUGVDVVHVVPHQWSURFHVVHVDFFUHGLWDWLRQ etc.). 20 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey ! " #$ " % & ' ()* + % !+ ' , * - .* -' & / 0 " 1 2 ' " " % & + 3 ' /& ' 4 " 2 ' " 4 ( * ( * 5 + 1 " "6 % & 7 8 7 9 : % 7 88; 0<0= 9 / & 8 % " 97 0 ( * 4 ' " 5 47 >" + ' &' " ( *' 9 7 " 4 5 0 ( * 4 & - 9% " 0 5 + 4? ' " ( * = 8 - -+ 5 - ' " " & " ' 2 8 * : " ' -;< 5 ' 5 4 # , 0 " + 2 " + + & ' 0 " " ' 9 + * ' 5 ' " @ = ' " = 4// @' " " 8 / 0 1 2 + " 0 5 ' " " + " + " ' " + " " + >" + ' A " ' A ' " ' + ' ' ' + " + ! + ' + 2 ( + !!" # # $ % & ' ( ) *& & # + # & ( # & , ( # 21 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen ! " ! ! ! # !! ! ! ! ! ! ! $ !! ! % % &! !$ " ! ' " ( ) !! &* ! ! ! + , - ! ! ! ! ! . ! ) ! ! /010 ! ! + ' " ( 1 " ! ! ! ! ! ! ! ! " 2 , 3 3 ! ! ! ! " !! ! ! ! ! 4 2 ! ! ! 4 ! ! ! ! ! 5 !, ! " ! " ! ! ! ! $ . 3 5 ! " # $ % & ! " " ! ' & ( # " " " ) ") * + # ! * ! # ! ! ' # ! ! " " ' 6 , 4 ! # ! ! ! !! . # ! ! 3% ! , 3. ! " !! ! ! 4 4 ! ! ! ! 3% !&&! ! , ! !! 22 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey 3.4 Vacancies, Scarce Skills, Education and Training 3.4.1 Identifying Scarce Skills 9DULRXVW\SHVRIVKRUWDJHVH[LVW LQSDUWLFXODUWKUHHPDLQDUHDVFDQEHLGHQWL¿HGDVFULWLFDO v 6KRUWDJHRIDUWLVDQVDQGRWKHUWHFKQLFDOO\WUDLQHGZRUNHUVVXFKDVHOHFWULFLDQV WHFKQLFLDQV PHFKDQLFV HWF(QJLQHHUV DQG VFLHQWLVWV DOVR OLVWHG KLJK RQ WKH OLVW of scarce skills. These shortages were especially raised as a concern in the manufacturing sectors. v 6KRUWDJHDWPLGGOHWRVHQLRUPDQDJHPHQWOHYHO7KLVVNLOOVVKRUWDJHH[LVWVZLWKLQ DOOLQGXVWU\W\SHVHJPLQHPDQDJHUVRUVKDIWPDQDJHUVLQWKHPLQLQJLQGXVWU\ foremen and managing engineers in the manufacturing industry and general EXVLQHVVPDQDJHUVLQWKHVHUYLFHVLQGXVWU\0DQDJHPHQWVNLOOVLWVHHPVDUHVR SUREOHPDWLFWKDWSRDFKLQJLVHQGHPLFDFURVVLQGXVWULHV)RUH[DPSOHHQJLQHHUV DQGPLQHPDQDJHUVDUHRIWHQFRD[HGLQWRDFFHSWLQJSRVLWLRQVLQWKHEDQNLQJRU ¿QDQFHLQGXVWU\ v $VIDUDVHQWU\OHYHOSRVLWLRQVDUHFRQFHUQHGWKHFRQVWUDLQWDVPHQWLRQHGLVQRW QHFHVVDULO\WKHTXDQWLW\RIJUDGXDWHVEXWUDWKHUWKHTXDOLW\RIWKHVHJUDGXDWHV$W WKHJUDGXDWHOHYHOWKHUHIRUHWKHSUREOHPVHHPVWRUHODWHWRDVNLOOVGH¿FLW LQWHUPV of quality) rather than a skills shortage (in terms of numbers). 7KHSKHQRPHQRQRIULVLQJJUDGXDWHXQHPSOR\PHQWKDVWREHYLHZHGZLWKLQWKHFRQWH[WRIVNLOOV VKRUWDJHVDQGYDFDQFLHVWKDWH[LVWLQWKHSULYDWHVHFWRU7KHWKLUGSRLQWDERYHLVLQWHUHVWLQJDV it suggests that graduate unemployment relates either to an oversupply of graduates in general RUSHUKDSVPRUHOLNHO\VRDQRYHUVXSSO\RILQDSSURSULDWHO\TXDOL¿HGRUSRRUTXDOLW\JUDGXDWHV 6RPH¿UPVH[SOLFLWO\QRWHGWKDWWKHDYHUDJHQHZUHFUXLW¶VHGXFDWLRQLVRIDORZHUTXDOLW\WKDQ LQWKHSDVWZKLOHRWKHUVVXJJHVWHGWKDWLIWKH\FRXOG¿QGPRUHJRRGTXDOLW\JUDGXDWHVWKH\ ZRXOGLQFUHDVHWKHLQWDNHRIJUDGXDWHV7KLVUDLVHVWKHLVVXHRIJUDGXDWHHPSOR\PHQWWDUJHWV LHKRZPDQ\JUDGXDWHVZRXOG¿UPVHPSOR\LIWKHUHZDVQRTXDOLW\LVVXHDWKDQG" 7KHQXPEHURIJUDGXDWHVDEVRUEHGLQWHUPLWWHQWO\E\¿UPVDSSHDUVLQPDQ\FDVHVWREHGULYHQ E\WKHTXDOLW\RIVXSSO\+HQFH¿UPVZKRUHTXLUHDVHWQXPEHURIJUDGXDWHVPD\DFWXDOO\HQG up adjusting these targets downwards given the skills and quality of the pool of the applicants. &RQYHUVHO\¿UPVKDYHLQGLFDWHGWKDWWKH\DUHZLOOLQJDQGDEOHWRLQFUHDVHWKHLQWDNHLIIDFHG ZLWKDKLJKHUTXDOLW\RIODERXUVXSSO\7KHQRWLRQWKHUHIRUHLQDQRGGZD\WKDWVXSSO\FUHDWHV LWVRZQGHPDQGVHHPVWREHSDUWLDOO\WUXHDWWKHPDUJLQKHUH ,QVHFWLRQZHH[SORUHVRPHRIWKHUHDVRQVIRUWKHVNLOOVVKRUWDJHVDVGH¿QHGLQWKH ¿UVWWZREXOOHWSRLQWVDERYH:HORRNDWERWKWKHVXSSO\DQGGHPDQGVLGHLVVXHVWKDWKDYH contributed to this problem. Section 3.4.3 considers some of the concerns around the skills 23 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen deficit problem and inadequate or inappropriate qualifications obtained by graduates at secondary and tertiary institutions. 3.4.2 Explaining Skills Shortages D *UDGXDWLRQ/HYHOVLQ7HFKQLFDO4XDOL¿FDWLRQVDW8QLYHUVLWLHV and Universities of Technology .UDDN SUHVHQWVYDULRXV¿JXUHVVKRZLQJHYLGHQFHRIGHFOLQLQJQXPEHUVRIHQJLQHHULQJ VWXGHQWV JUDGXDWLQJ IURP WHUWLDU\ LQVWLWXWLRQV )RU H[DPSOH XQLYHUVLW\ JUDGXDWHV ZLWK engineering bachelor’s degrees declined from a peak of just under 1 600 in 1994 to around LQ6LPLODUO\GHVSLWHWKHDOPRVWIRXUIROGLQFUHDVHLQHQUROPHQWVDWXQLYHUVLWLHV RIWHFKQRORJ\EHWZHHQ DQGWKHQXPEHURIVWXGHQWVJUDGXDWLQJZLWKQDWLRQDO GLSORPDVKLJKHUGLSORPDVDQGGHJUHHVLQHQJLQHHULQJGHFOLQHGGUDPDWLFDOO\$V.UDDNQRWHV “it is ironic that institutions of technology … are currently witnessing a dramatic decline in a key µKDUG¶WHFKQRORJ\¿HOG HQJLQHHULQJ ZKLOHJUDGXDWLRQVLQµVRIWHU¶QRQWHFKQLFDOVXEMHFWV VXFK as business studies) expand” (2003). Adding further to the shortages is engineering graduates’ unwillingness to do front-end HQJLQHHULQJZRUNDSUREOHPLGHQWL¿HGE\RQHRIWKHFRQVWUXFWLRQ¿UPVLQWHUYLHZHG0RVW students show a strong preference for working as engineering consultants in a services environment rather than working at manufacturing plants or mines. It is apparent that training at universities and universities of technology is skewed towards SURGXFLQJZRUNHUVIRUWKHUDSLGO\H[SDQGLQJWHUWLDU\ VHUYLFHV VHFWRUZLWKODUJHQXPEHUVRI VWXGHQWVJUDGXDWLQJLQPDQDJHPHQWVFLHQFHVFRPPHUFHDQG¿QDQFH$OOWKLVFRPHVDWWKH H[SHQVHRIWKHPLQLQJDQGPDQXIDFWXULQJVHFWRUV:KLOHVXFKDVKLIWWRZDUGVVHUYLFHVZDV SHUKDSVMXVWL¿HGE\PDUNHWFRQGLWLRQVGXULQJWKH VPDQXIDFWXULQJ¿UPVDUHFXUUHQWO\ facing skills shortages in the face of increasing demand for their products. Demand is fuelled IXUWKHUE\JRYHUQPHQW¶VSODQVWRGUDPDWLFDOO\VWHSXSSXEOLFVHFWRULQYHVWPHQWLQWKHQH[WIHZ years. b. Enrolment at Tertiary Educational Institutions Related to the above is the unique situation in the South African tertiary education system whereby a huge premium is placed on university educations as opposed to technical TXDOL¿FDWLRQVREWDLQHGDWXQLYHUVLWLHVRIWHFKQRORJ\WHUWLDU\FROOHJHVRU)(7FROOHJHV:KHQ FRPSDUHGWRIRUH[DPSOHWKH8QLWHG.LQJGRP6RXWK$IULFD¶VHQUROPHQWDWWHUWLDU\LQVWLWXWLRQV DSSHDUVWREHKLJKO\VNHZHGWRZDUGVµDFDGHPLF¶LQVWLWXWLRQV XQLYHUVLWLHVDQGXQLYHUVLWLHVRI technology) and away from FET colleges. Figure 1 shows clearly that South Africa has a large VKDUHRIVWXGHQWVDWWHQGLQJXQLYHUVLWLHVDQGWHFKQLNRQVUHODWLYHWR)(7FROOHJHV,QWKH PRVWUHFHQW\HDUIRUZKLFK¿JXUHVFRXOGEHIRXQGRQO\SHUFHQWRIVWXGHQWVDWWHQGLQJ 24 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey DWHUWLDU\LQVWLWXWLRQLQWKH8QLWHG.LQJGRPZHUHDWWHQGLQJDXQLYHUVLW\RUWHFKQLNRQZLWKWKH UHPDLQGHU SHUFHQW DWWHQGLQJ)(7FROOHJHV,QWKHVDPH\HDUDWWHQGDQFHDWWHUWLDU\ LQVWLWXWLRQVLQ6RXWK$IULFDZDVKHDYLO\VNHZHGWRZDUGVXQLYHUVLWLHVDQGWHFKQLNRQVZLWK almost two-thirds of students attending universities or technikons. In that year 65.1 per cent of all tertiary students in South Africa were studying at universities or universities of technology. University students alone comprised 44 per cent of all students. Figure 1: Enrolment at Public Educational Institutions in South Africa and the United Kingdom ! Source: (South African) Department of Education (2003) and UK Higher Education Statistics Agency (see www.hesa.co.uk). Given the nature of skills shortages many firms felt that government should subsidise or SURPRWHWHUWLDU\HQUROPHQWLQ¿HOGVRIVWXG\RUWUDLQLQJWKDWDUHPRUHSUDFWLFDOO\RULHQWDWHG 0DQXIDFWXULQJILUPVLQSDUWLFXODUH[SHULHQFHVKRUWDJHVRIH[SHULHQFHGDUWLVDQVZKLFK suggest that higher enrolment at technical FET colleges is crucial. Firms also called for greater collaboration between educational institutions and the business sector on curriculum design in order to address problems associated with irrelevance of certain course modules and the lack of practical application of theory. Collaboration entails developing courses together and FUHDWLQJRSSRUWXQLWLHVIRULQWHUQVKLSVRUH[SHULHQWLDOWUDLQLQJDVSDUWRIDFDGHPLFFRXUVHV,WLV FUXFLDOWKDWWKHTXDOL¿FDWLRQDQGSUDFWLFDOH[SHULHQFHREWDLQHGDWHGXFDWLRQDOLQVWLWXWLRQVDUH relevant to the needs of employers. 25 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen c. Workplace Training and the Policy Environment Adding to the current woes of the manufacturing sector is the apparent decline in apprenticeship training during the 1990s. Kraak (2003) shows that the number of apprentices LQWUDLQLQJLQ6RXWK$IULFDGHFOLQHGIURP LQ WRLQ DGURSRIDOPRVW SHUFHQW$QXPEHURIUHDVRQVH[LVWIRUWKLVGHFOLQHLQFOXGLQJHFRQRPLFUHDVRQV FRQWUDFWLRQLQ RXWSXW DVZHOODVWKHSROLF\HQYLURQPHQW7KHVHDUHGLVFXVVHGIXUWKHUEHORZ This decline was driven by the contraction in output in the manufacturing sector over this SHULRG)LUPVIROORZHGVWUDWHJLHVRIµULJKWVL]LQJ¶LQDQDWWHPSWWRUDLVHHI¿FLHQF\DQGUHGXFH FRVWV)LUPV¶H[SHFWDWLRQVRIIXWXUHVNLOOVUHTXLUHPHQWVZHUHVXFKWKDWWUDLQLQJGLGQRWIHDWXUH high on the list of priorities for the sector. The lack of training provided can perhaps be seen DVVKRUWVLJKWHGE\¿UPVDOWKRXJKWKHUHFHQWERRPSKDVHDQGWKHSODQQHGLQFUHDVHVLQSXEOLF sector investments could perhaps not have been foreseen at the time. From 1998 onwards with the implementation of the Skills Development Act of 1998 (amended LQ ZKLFKSURYLGHGWKHLQVWLWXWLRQDOIUDPHZRUNIRUWKHGHYHORSPHQWDQGLPSOHPHQWDWLRQ RIQDWLRQDOVHFWRUDODQGZRUNSODFHVWUDWHJLHVWRGHYHORSDQGLPSURYHWKHVNLOOVRIWKH 6RXWK$IULFDQZRUNIRUFHIXUWKHUXQFHUWDLQWLHVDURXQGWKHIXWXUHRIWKHDSSUHQWLFHVKLS system emerged. The Skills Development Act of 1998 effectively repealed the Manpower 7UDLQLQJ$FWRI ZKLFKJRYHUQHGDSSUHQWLFHVKLSV+RZHYHUVFKHGXOHWZRLQWKH6NLOOV Development Act made provision for those sections in the Manpower Training Act pertaining to apprenticeships to remain in force until the Minister repealed them by notice in the Government *D]HWWH7KH$FWWKHUHIRUHVHHPHGWRVXJJHVWWKDWDSSUHQWLFHVKLSVZHUHEHLQJSKDVHGRXW and replaced with learnerships. Adding to these suspicions is the fact that learnerships have a PXFKEURDGHUVFRSHLQWHUPVRIWKHFRYHUDJHRIRFFXSDWLRQVDQGWKXVLQDVHQVHHQFRPSDVV apprenticeships. More recently various sectoral Black Economic Empowerment (BEE) charters were drawn XSE\WKH6HFWRU(GXFDWLRQDQG7UDLQLQJ$XWKRULWLHV 6(7$V DQGYHU\RIWHQWKHZRUGLQJ LQWKHVHFKDUWHUVVXJJHVWHGWKDWµ%((SRLQWV¶ZKLFKDUHDZDUGHGWRILUPVWRGHWHUPLQH ZKHWKHUWKH\DUHµ%((FRPSOLDQW¶RQO\DZDUGHGSRLQWVIRUOHDUQHUVKLSVVSHFL¿FDOO\DQGQRW DSSUHQWLFHVKLSV7KLVKDVOHGVRPH¿UPVWRFRQYHUWDSSUHQWLFHVKLSVWROHDUQHUVKLSVLQRUGHU WRFRPSO\ZLWKWKH%((FKDUWHUV,QIDFWVRPH¿UPVLQGLFDWHGWKDWWKH\RQO\SURYLGHWUDLQLQJ based on the learnerships system because of the BEE points that are on offer. In the absence of learnerships they would have provided training based on their own models. It appears now as if there is a realisation among policymakers that apprenticeships may SHUKDSVEHPRUHDSSURSULDWH,QIDFWVWHSVDUHEHLQJWDNHQWRµEULQJEDFNDSSUHQWLFHVKLSV¶ DQGWRUHVWRUH¿UPVIDLWKLQWKHIXWXUHRIDSSUHQWLFHVKLSV:KLOHWKHFKDQJHRYHUIURPWKH DSSUHQWLFHVKLSWROHDUQHUVKLSVLQLWLDOO\DSSHDUHGWRLPSO\WKHHQGRIDSSUHQWLFHVKLSVLWQRZ 26 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey starts to seem that it was merely a name change. In an article published by The Skills Portal 763 WKHDXWKRUUHSRUWVRQDVWDWHPHQWE\WKH0LQLVWHURI/DERXUZKHUHKHVDLGKH never repealed the sections in the Manpower Training Act that pertains to apprenticeships and IXUWKHUDVNHG¿UPVWR³please take on apprentices” as this “the right thing to do”. In addition most of the Sector and Education Authorities (SETAs) offer the same grants for learnerships DQGDSSUHQWLFHVKLSV$FFRUGLQJWRRI¿FLDOVDWWKH'HSDUWPHQWRI/DERXUWKH'HSDUWPHQWRI Trade and Industry also recently proposed that learnerships and apprenticeships be awarded the same BEE points. Such a step will certainly remove all skewed incentives to implement learnerships over and above apprenticeships when the latter is in fact more appropriate for the ¿UPFRQFHUQHG ,QVXPPDU\WKHUHIRUHWKHHFRQRPLFFLUFXPVWDQFHV VORZJURZWKDQGXQFHUWDLQWLHVDERXW WKHIXWXUH WKDWSUHYDLOHGGXULQJWKH VFRXSOHGZLWKWKHXQFHUWDLQSROLF\HQYLURQPHQW UHJDUGLQJZRUNSODFHWUDLQLQJSUREDEO\OHGWRDGHFOLQHLQWKHQXPEHURIZRUNHUVWUDLQHGDWWKH workplace. d. Middle-Management Training 'HVSLWHWKHIDFWWKDW¿UPVFLWHVNLOOVVKRUWDJHVDWPLGGOHPDQDJHPHQWOHYHODVDPDMRUFRQFHUQ YHU\IHZ¿UPVDUHXVLQJOHDUQHUVKLSVWRRIIHUVXEVLGLVHGWUDLQLQJIRUPLGGOHPDQDJHPHQWOHYHO .UDDN SUHVHQWV¿JXUHVIURPWKH'HSDUWPHQWRI/DERXUIRU0DUFKVKRZLQJWKH distribution of the number of registered learnerships programmes across different NQF levels. About 39 per cent of the programmes are targeted at NQF levels 1 to 3 (equivalent to pre- PDWULFXODWLRQ ZKLOHSHUFHQWRISURJUDPPHVDUHWDUJHWHGDW14)OHYHOVDQG PDWULF and matric plus diploma). The remainder (14 per cent) are for NQF levels 6 to 8 (equivalent to higher education degrees and postgraduate courses). In Figure 2 the 2002 estimates are FRPSDUHGZLWKWKHODWHVW¿JXUHVIURPWKH'HSDUWPHQWRI/DERXU E 7KH¿JXUHVKRZVD relative increase in the bias towards registering lower-level learnership programmes.13 In order to effectively address skills shortages at the mid-career level more subsidised learnerships programmes should be registered at the NQF 6 to 8 levels. This requires no change in the design of the learnership system – the system is already equipped to deal with KLJKHUOHYHOOHDUQLQJ,WPHUHO\UHTXLUHVFKDQJLQJWKHPLQGVHWVRIWUDLQLQJSURYLGHUV¿UPVDQG SETAs so that the learnership system is not only seen as entry-level training. It may even UHTXLUHDFKDQJHLQWKHPLQGVHWRIHPSOR\HHVPDQ\RIZKRPUHJDUGOHDUQHUVKLSVDVEHQHDWK WKHP7KHYDULRXVVWDNHKROGHUVLQFOXGLQJ6(7$V¿UPVDQGHGXFDWLRQDOLQVWLWXWLRQVVKRXOG 13 This may be due to the fact that the subsidies for unemployed learners are higher than those for employed learners, thus creating a bias towards enrolling unemployed learners onto lower NQF level learnerships. Perhaps a reconsideration of the incentive system is needed. Higher subsidies for NQF level learnerships where scarcities are most severe should perhaps be considered. 27 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen work together towards developing and implementing suitable and appropriate higher-level OHDUQHUVKLSSURJUDPPHVWKDWZRXOGJHDU¿UPVWRZDUGVWUDLQLQJIXWXUHPDQDJHUV Figure 2: Registered Learnership Programmes by NQF Category, 2002 and 2006 !!" %!" !" $!" !" !" !" !" #!" !" !" #!!# #!!& Source: Kraak (2003) and Department of Labour (2006b). Note: 7KHVHDUHWKHSURSRUWLRQVRISURJUDPPHVUHJLVWHUHGQRWOHDUQHUV7KH¿JXUHVIRUOHDUQHUVDUHQRW available at NQF level. e. Other Factors: The Brain Drain and Employment Equity 7KHEUDLQGUDLQKDVDOVRKDGDKXJHLPSDFWRQPDQXIDFWXULQJFRQVWUXFWLRQDQGPLQLQJ LQGXVWULHVHVSHFLDOO\LQHQJLQHHULQJUHODWHG¿HOGV,QDQRQOLQHDUWLFOHSXEOLVKHGE\WKH6RXWK $IULFDQ,QVWLWXWLRQRI&LYLO(QJLQHHULQJ /DZOHVV WKHDXWKRUHVWLPDWHVWKDWWKHLQGXVWU\ KDGORVWDSSUR[LPDWHO\HGXFDWHGDQGWUDLQHGVWDIIZKRKDYHJUDGXDWHGVLQFH $ “large percentage´KDVHPLJUDWHGZKLOHWKHUHVWKDYHHLWKHUWDNHQHDUO\UHWLUHPHQWRUPRYHG into other jobs. Ironically the author estimates that between 3 000 and 6 000 civil engineering SURIHVVLRQDOVZLOOEHQHHGHGLQWKHQH[WIHZ\HDUVWRPDWFKWKHGHPDQGIRUVNLOOVGULYHQ E\ODUJHSURMHFWVVXFKDV*DXWUDLQWKH6RFFHU:RUOG&XSH[SDQVLRQDW(VNRPDQG Transnet. Another interesting observation by Lawless (2006) is about the age distribution of civil HQJLQHHULQJSURIHVVLRQDOVLQ6RXWK$IULFD,WVKRZVDODUJHJURXSRIH[SHULHQFHGHQJLQHHUV LQWKHLUODWHIRUWLHVDQGROGHU,QFRQWUDVWWKHUHDUHLQVXI¿FLHQWQXPEHUVRIPLGFDUHHUVWDIIWR FDUU\RXWWKHEXONRISURGXFWLRQ7KHDXWKRUQRWHVWKDWLQWKHUHVWRIWKHZRUOGROGHUPRUH H[SHULHQFHGZRUNHUVDUHEHLQJUHWDLQHGE\UDLVLQJWKHUHWLUHPHQWDJHZKLOHDWWKHVDPH time increasing the number of young people in training. Emigration and early retirement of 28 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey H[SHULHQFHGPLGFDUHHUZRUNHUVLVFHUWDLQO\LPSDFWLQJRQSURGXFWLYLW\DQGRXWSXWLQ6RXWK Africa. A recent report published by Finweek (2006) suggested that 75 per cent of Eskom ZRUNHUVVXUYH\HGLGHQWL¿HGWKHVWDIIVKRUWDJHVDQGLQDSSURSULDWHVNLOOVDVWKHPDLQUHDVRQV EHKLQGWKHHOHFWULFLW\VXSSO\FULVLV2QHRIWKHEDQNVLQWHUYLHZHGPHQWLRQHGVSHFL¿FDOO\WKH KXJHSUREOHPVWKH\KDGZLWKUHWDLQLQJH[SHULHQFHGPLGGOHPDQDJHPHQWVWDIIPHPEHUVPDQ\ of whom emigrate or set up their own businesses in South Africa. ([SODLQLQJWKH6NLOOV'H¿FLW a. Quality of Primary and Secondary Schooling 7KHPDMRULW\RI¿UPVLGHQWL¿HGORZTXDOLW\SULPDU\DQGVHFRQGDU\VFKRROHGXFDWLRQDVDPDMRU factor behind the labour market problems in the South Africa. The poor quality of teachers and the low number of passes in matric mathematics and science was frequently raised as something that needs urgent attention. The transition from rural schools to tertiary education and the working environment is often daunting to people from disadvantaged backgrounds. 7KLVH[SODLQVKLJKGURSRXWUDWHVDWWHUWLDU\LQVWLWXWLRQVSRRUSHUIRUPDQFHGXULQJIRUPDOMRE interviews and the inability of disadvantaged individuals to adapt to the working environment. 6FKRROVDQGWRODUJHH[WHQWWHUWLDU\HGXFDWLRQDOLQVWLWXWLRQVDUHDOVRIDLOLQJLQWKHSURYLVLRQ of proper career guidance despite well-publicised facts about poor job prospects for students VWXG\LQJLQDUWVKXPDQLWLHVDQGWKHVRFLDOVFLHQFHV The quality of education needs to be addressed at a primary and secondary school level. School pupils need to be encouraged to follow mathematics and science as subjects. Career guidance councillors should educate them about the importance of these subjects. At the same WLPHWKHTXDOLW\RIWHDFKHUVLQWKHVH¿HOGVQHHGVWREHDGGUHVVHGWKURXJKEHWWHUWUDLQLQJDQG remuneration packages. ,QUHVSRQVHWRWKHVORZSURJUHVVLQWUDQVIRUPLQJDQGLPSURYLQJWKHVFKRROLQJV\VWHPDQG HVSHFLDOO\PDWKHPDWLFVDQGVFLHQFHWHDFKLQJDQXPEHURI¿UPVLQWHUYLHZHGLQGLFDWHGWKDW they are actively involved in school education. Firms invest in mathematics and science SURMHFWVZKLOHVRPHIXQGOHDUQLQJFHQWUHVFRPSXWHUODERUDWRULHVDQGVRRQ)LUPVYLHZVXFK initiatives not only as corporate social investments but also long-term investments in their RZQ¿UPVDVWKH\ZLOOEHQH¿WIURPDQLQFUHDVHGVXSSO\RIPDWULFXODQWVZLWKSDVVHVLQVXLWDEOH subjects. 29 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen b. Quality of FET Colleges 7KHVWDWHRI)(7FROOHJHVDQGSDUWLFXODUO\WKHTXDOLW\RIHGXFDWLRQDQGWUDLQLQJSURYLGHGDW WKHVHLQVWLWXWLRQVLVDQRWKHUFRQFHUQ6RPH¿UPVDUHRIWKHRSLQLRQWKDWWKHFXUUHQW)(7 system is not generating the quantity or quality of artisans that used to be produced under the old system of industry training boards. While major restructuring of the FET system has DOUHDG\WDNHQSODFH±UHFHQWO\)(7FROOHJHVZHUHPHUJHGLQWRFROOHJHVZKLOHDIXUWKHU R1.5 billion is being invested as part of the FET recapitalisation project – FET colleges have IRUWRRORQJEHHQVHHQDVLQHIIHFWLYHDQGLQHI¿FLHQW .UDDN 7KH6RXWK$IULFDQ)(7V\VWHPFXUUHQWO\DFFRPPRGDWHVWKUHHW\SHVRI)(7FROOHJHVQDPHO\ WKHJHQHUDODFDGHPLF)(7WKHYRFDWLRQDO)(7DQGWKHLQGXVWU\EDVHG)(77KHJHQHUDO academic FET’s offer “DVRFDOOHGµZKROH¶TXDOL¿FDWLRQFRQVLVWLQJRIH[LWOHYHORXWFRPHVZKLFK schools will offer and which will no doubt form the basis for university entrance criteria” (Papier ZKLOHWKHYRFDWLRQDODQGLQGXVWU\EDVHG)(7VDUHPRUHSUDFWLFDOO\RULHQWHG$VZLWK the move from apprenticeships to learnerships the college education system also appears to be moving away from a pure vocational training model to what some would term a more µEDODQFHG¶YRFDWLRQDODQGDFDGHPLFWUDLQLQJPRGHOGULYHQE\DQHHGWRHGXFDWHSHRSOHIRUWKH PRGHUQVRFDOOHGµNQRZOHGJHEDVHGOHDUQLQJVRFLHW\¶ 3DSLHU 7KHUHDUHWZRLPSRUWDQW issues here. )LUVWO\EURDGHGXFDWLRQHQVXUHVLQFOXVLRQLQWKLVNQRZOHGJHVRFLHW\DQGGHDOVWRVRPHH[WHQW with complaints from employers about young people that leave education without a balanced HGXFDWLRQWKDWHQDEOHVWKHPWRIXQFWLRQLQWKHZRUNSODFH+RZHYHUWKHQHZYRFDWLRQDO TXDOL¿FDWLRQVRQWKH14)PD\EHDFDXVHIRUFRQFHUQIRU)(7FROOHJHVZKRLQWKHSDVWKDYH EHHQWUDLQLQJH[SOLFLWO\IRULQGXVWU\7KHDGGLWLRQDOHGXFDWLRQDOUHTXLUHPHQWVDUHSRWHQWLDOO\ WDNLQJVWXG\DQGWHDFKLQJWLPHDZD\IURPSXUHYRFDWLRQDOWUDLQLQJ$V3DSLHUVXJJHVWV³… it PD\ZHOOEHWKDW)(7TXDOL¿FDWLRQVZLOODJDLQQHLWKHUVDWLVI\WKHGHPDQGVRIWKHZRUNSODFHQRU the requirements of Higher Education” (2006: 6). The realities in South Africa are that young people need to acquire technical skills that would make them workplace ready and more HPSOR\DEOHEXWDWWKHVDPHWLPHVRIWHUVNLOOVDUHDOVRODFNLQJ7KLVSUHVHQWVDPDMRUGLOHPPD and challenge to the FET sector. Perhaps the greatest challenge to the FET sector is regaining the trust of industry. A second is the quality issue. Many of the learnerships currently in place are being managed DQGUXQE\SULYDWHLQGXVWU\EDVHG)(7FROOHJHV$QXPEHURI¿UPVLQWHUYLHZHGLQGLFDWHGWKDW WKH\KDYHJRQHWKHURXWHRIDSSO\LQJIRUDFFUHGLWDWLRQDVDWUDLQLQJSURYLGHUHLWKHUGXHWRD ODFNRIIDLWKLQWKHSXEOLFHGXFDWLRQ )(7 V\VWHPRUEHFDXVHWKH\IHOWWKDWWKH\FRXOGSURYLGH EHWWHUTXDOLW\DQGPRUHDSSURSULDWHWUDLQLQJWKHPVHOYHV6PLWKHWDO ¿QGDVLPLODU WUHQGDPRQJWKHVDPSOHRI¿UPVDQGOHDUQHUVLQWHUYLHZHGE\WKHP³[d]espite massive efforts in South Africa to transform public … FET colleges´0DQ\RIWKHODUJH¿UPVREYLRXVO\KDYH 30 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey WKHFDSDFLW\HFRQRPLHVRIVFDOHDQGH[SHULHQFHWRRIIHUWUDLQLQJ:KHWKHUWKLVWUDLQLQJFDQ EHRIIHUHGDWDORZHUFRVWWKDQWKHFRVWRIRXWVRXUFLQJWKHVHUYLFHLVXQFOHDU(LWKHUZD\WKH SHUFHSWLRQRI¿UPVLVWKDWWKH\FDQSURYLGHKLJKHUTXDOLW\PRUHDSSURSULDWHSUDFWLFDOWUDLQLQJ WKDQ)(7FROOHJHVWKDWFDWHUVIRUDZLGHYDULHW\RI¿UPV c. Quality of Education at Tertiary Institutions and Functional Illiteracy $QRWKHUJHQHUDOFRQFHUQUHODWHVWRWKHTXDOLW\RIHGXFDWLRQRIIHUHGDWWHUWLDU\LQVWLWXWLRQV7KLV PDQ\IHOWLVGULYHQE\WKHVWURQJIRFXVRQHQUROOLQJODUJHQXPEHUVRIVWXGHQWVUDWKHUWKDQ focusing on the quality of education. Firms felt that educational subsidies at tertiary institutions should be based on a combination of student numbers and quality rating of the institution RUWKHTXDOL¿FDWLRQVRIIHUHGUDWKHUWKDQWKHWKURXJKSXWUDWHDVLVSUHVHQWO\WKHFDVH7KH current subsidisation system is creating the wrong incentives for educational institutions. It is also important that these institutions limit enrolment in degree or diploma courses with poor employment prospects. Poor academic performance of students (discussed in section 3.2) also relates to high functional illiteracy among students and poor soft skills. Tertiary educational LQVWLWXWLRQVVKRXOGIRFXVRQEULQJLQJVRIWVNLOOVHQWUHSUHQHXULDOVNLOOVDQGFRPPXQLFDWLRQVNLOOV on board as part of bridging courses for students. 31 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen ! " # $ ! % & % ! " '" ( $ ) ' ( * ' ( + ' + ( " , * "! ',*"( + $ '- . - / - / . / . / 0 " / / )/ ) ( # " 1 . 0 ) ) '))( " , . , ', ( ! 32 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey ! " # ! ! $"#!!% & ' ( ) * $+ ! , % $+ , % - $+ . , % / + 0 1 " 2 3 $23 % - 4 ' + ' ! ! "# $ %#& ' 33 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen 4. Policy Options 4.1 On Skills Shortages and Vacancies 4.1.1 Immigration Service Centre Some of the short-term solutions proposed to deal with the skills scarcity problem include UHKLULQJHDUO\UHWLUHHVDVVLVWLQJDQGHQFRXUDJLQJ6RXWK$IULFDQVOLYLQJDQGZRUNLQJDEURDG to come back and sourcing foreigners with relevant scarce skills. The latter policy option has enjoyed the most media coverage in recent months. A scarce skills list published by the Department of Home Affairs in February 2006 contains 56 different occupation types and sets a quota of scarce skills that may be sourced from abroad at 46 500 (Department of Home $IIDLUV )LJXUHVKRZVKRZWKLVTXRWDLVDOORFDWHGDFURVVGLIIHUHQWEURDGRFFXSDWLRQ FDWHJRULHV2IWKHVHMREVSHUFHQWDUHLQVFLHQFHDQGHQJLQHHULQJWKXVUHÀHFWLQJWKH critical shortages in this broad occupational category. Agricultural scientists make up 21 per FHQWRIWKHWRWDOZKLOHRFFXSDWLRQVLQWKHKHDOWKDQGPHGLFDOVFLHQFHVDFFRXQWIRUSHU cent. The rest is distributed between people with Information Communication Technologies ,&7 VNLOOV SHUFHQW PDQDJHPHQWDQGFRPPHUFHVNLOOV SHUFHQW DQGWKHHGXFDWLRQDO SURIHVVLRQ SHUFHQW 7KHTXRWDVDUHRQO\DSSOLFDEOHWRIRUHLJQHUVZLWKDWOHDVW¿YH\HDUV UHOHYDQWH[SHULHQFH7KLVHQVXUHVWKDWWKHLPSRUWDWLRQRIVNLOOVGRHVQRWLPSDFWRQ6RXWK Africans competing for entry-level positions (graduates). An important provision attached to the sourcing of skills from abroad is that the foreign recruit should be employed in a position where he or she can act as a mentor or coach for young HQWU\OHYHOZRUNHUVLQWKH¿UP9DULRXVRWKHUVXFKVFDUFHVNLOOVOLVWVKDYHEHHQSXEOLVKHG UHFHQWO\DQGDVXEVWDQWLDOOLWHUDWXUHH[LVWVDURXQGWKHPHWKRGVXVHGWRLGHQWLI\VFDUFHVNLOOV 7KHVHLQFOXGHOLVWVE\WKH+XPDQ5HVRXUFHV'HYHORSPHQW&RXQFLO WKH1DWLRQDO Advisory Council on Innovation and the Department of Science and Technology (2003) and WKH+XPDQ6FLHQFH5HVHDUFK&RXQFLO VXUYH\HGE\3RZHOODQG*URHQPH\HU(GLJKHML 0RVWLQFOXGHHQJLQHHUVDUWLVDQVDQGWHFKQLFLDQVZKLOHRFFXSDWLRQVVXFKDVHGXFDWRUV DQGDFDGHPLFVVFLHQWLVWVDQGELRORJLVWVDQGSHRSOHZLWKVNLOOVLQWKHDUHDRI,QIRUPDWLRQ Communication Technology (ICT) are also prominent. 34 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey Figure 3: Composition of Scarce Skills Quotas across Broad Occupation Categories Source: Department of Home Affairs (2006). 7KHVKRUWDJHRIH[SHULHQFHGVNLOOHGHPSOR\HHVKRZHYHUGH¿QHGUHTXLUHVDEROGHUDQG PRUHHI¿FLHQWLPPLJUDWLRQSROLF\&XUUHQWO\WKHWXUQDURXQGWLPHDQGDVVRFLDWHGEXUHDXFUDWLF inertia around immigrant worker applications makes this particular labour market intervention RSHUDWLRQDOO\LQHIILFLHQW,QDGGLWLRQLWUHPDLQVDPRRWSRLQWZKHWKHUWKHOLVWLGHQWLILHGE\ WKH'HSDUWPHQWRI+RPH$IIDLUVLVLQIDFWDQH[KDXVWLYHDQGDFFXUDWHUHSUHVHQWDWLRQRIVNLOO shortages in the domestic economy. Given this we propose that an Immigration Service Centre IRUODUJHHVWDEOLVKHGFRPSDQLHVEHVHWXS,QWKH¿UVWLQVWDQFHWRDYRLGVHFRQGJXHVVLQJ ¿UPVRQWKHLUODERXUGHPDQGQHHGVLWLVSURSRVHGWKDWWKH'HSDUWPHQWRI+RPH$IIDLUVOLVW EHYLHZHGRQO\DVDJXLGHOLQHIRUVNLOOVLQQHHG6HFRQGO\LQRUGHUWRREYLDWHWKHLQVWLWXWLRQDO LQHI¿FLHQF\RIVXFKDFHQWUHVXFKDQLPPLJUDWLRQVHUYLFHVKRXOGJXDUDQWHHWKHSURFHVVLQJRI DOOLPPLJUDWLRQSDSHUZRUNZLWKLQDPRQWKZLWKDOOGXHGLOLJHQFHDURXQGWKHVSHFL¿FRFFXSDWLRQ LQQHHGEHLQJXQGHUWDNHQZLWKLQWKLVSHULRG 4.1.2 Middle-Management Training The sourcing of skills from abroad should be seen as a short-term measure to alleviate current shortages. In the longer run the ideal should be to train South Africans for these positions. At present learnerships are almost entirely focused on the lower NQF levels. This probably has WRGRZLWKWKHIDFWWKDWWKH16'6LVIDLUO\H[SOLFLWLQVXJJHVWLQJWKDWWKHXQHPSOR\HG\RXWKDUH SDUWLFXODUO\YXOQHUDEOHDQGKHQFHDVSHFLDOWDUJHWRIWKH16'6±DVUHÀHFWHGLQWKHKLJKHU subsidies for unemployed learners. 35 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen As pointed out in section 3.4.2 the irony about workplace training is that despite the severe VNLOOVVKRUWDJHVDWPLGGOHPDQDJHPHQWOHYHOIHZ¿UPVDUHXVLQJOHDUQHUVKLSVWRSURYLGH WUDLQLQJDWWKHKLJKHU14)OHYHOV,QIDFWDVVKRZQLQ)LJXUHWKHSURSRUWLRQRIOHDUQHUVKLS programmes at the NQF 6 to 8 levels has actually declined since 2002. The learnership system LVDOUHDG\HTXLSSHGWRGHDOZLWKKLJKHUOHYHOOHDUQLQJDQGQRWKLQJSUHYHQWV¿UPVIURPXWLOLVLQJ LWDVDZD\RISURYLGLQJVXEVLGLVHGWUDLQLQJIRUVNLOOHGZRUNHUVDVZHOO$VQRWHGSUHYLRXVO\WKH YDULRXVVWDNHKROGHUVLQFOXGLQJ6(7$V¿UPVDQGHGXFDWLRQDOLQVWLWXWLRQVVKRXOGZRUNWRJHWKHU towards developing and implementing suitable and appropriate higher-level learnership SURJUDPPHVWKDWZRXOGJHDU¿UPVWRZDUGVWUDLQLQJIXWXUHPDQDJHUVDQGXOWLPDWHO\WDUJHWHGDW ZKHUHWKHVKRUWDJHVFXUUHQWO\H[LVW 4.1.3 Restructuring and Marketing of FET Colleges A number of possible policy options regarding FET colleges present themselves. Hopefully WKHVHWRJHWKHUZLWKWKH)(7UHFDSLWDOLVDWLRQSURMHFWZLOOEHEHQH¿FLDOWRVWDQGDUGVDQGTXDOLW\ of training and education at FET colleges. This process should be monitored closely to ensure DQRSWLPDORXWFRPH6RPHVSHFL¿FSROLF\LVVXHVLQFOXGH v 7KHPRYHWRZDUGVµZKROHHGXFDWLRQ¶ VHHVHFWLRQ LVGULYHQE\WKHQHHGWR HQVXUHLQFOXVLRQLQWKHNQRZOHGJHVRFLHW\EXWLWLVDOVRFUXFLDOWKDWLQGXVWU\VWDQGDUGV DUH PHW DV IDU DV ¿UPV¶ H[SHFWDWLRQV RI SUDFWLFDO NQRZOHGJH DQG H[SHULHQFH LV concerned. This requires a process of quality control as well as regular consultation with industry about the curricula at FET colleges. v 6XSSRUW IURP LQGXVWU\ LV FUXFLDO 0DQ\ ¿UPV KDYH DSSOLHG IRU DFFUHGLWDWLRQ DV training providers and opt to conduct learnerships and apprenticeships themselves rather than outsourcing this to FET colleges or other academic institutions. This is DUHÀHFWLRQRIWKHGLVWUXVWRIWKHSULYDWHVHFWRULQSXEOLFWUDLQLQJDWSUHVHQWZKLFK poses a threat to the credibility and future of the FET system. v 3HUKDSV D µVRIW¶ UHFRPPHQGDWLRQ EXW RQH ZH IHHO WKDW LV YLWDO UHYROYHV DURXQG the fact that FET colleges are viewed within the African community as a second- EHVWRSWLRQIRUSRVWPDWULFWUDLQLQJ+HQFHDNH\SROLF\LQWHUYHQWLRQZRXOGLQYROYH PDUNHWLQJ)(7VLQ$IULFDQFRPPXQLWLHVDQGLQSDUWLFXODUUHSRVLWLRQLQJWKHPZLWKLQ these communities as institutions offering valuable and highly marketable skills. 7KH VHYHUH VKRUWDJH RI DUWLVDQV UHSRUWHG FRQVLVWHQWO\ E\ PDQXIDFWXULQJ ¿UPV UHLQIRUFHVWKHQHHGIRUWKLVLQWHUYHQWLRQ&RUSRUDWH¿QDQFLDODQGORJLVWLFDOVXSSRUW could be considered for such a marketing campaign. 36 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey 4.2 On Education and Human Capital 4.2.1 Addressing Poor Quality of School Outcomes )LUPVODPHQWLQJWKHSRRUTXDOLW\RIVFKRROLQJOHDGVWRWZRVKRUWWHUPVROXWLRQVZKLFKZH believe can be facilitated through JIPSA. These are: v Greater funding of career guidance services that are offered either at schools or off- site. These will prove invaluable in inculcating the importance of mathematics and VFLHQFHDPRQJVWOHDUQHUVZKLFK¿UPVEHOLHYHGLVQRWIXOO\DSSUHFLDWHGE\\RXQJ people. v The restructuring of educators’ remuneration packages (currently under negotiation EHWZHHQ WKH 'R( DQG 6$'78 RQ WKH EDVLV RI VFDUFH VNLOOV +HQFH ZH ZRXOG H[SHFWWKDWWKURXJKVXFKDUHDOORFDWLRQVFLHQFHDQGPDWKHPDWLFVHGXFDWRUVIRU H[DPSOHZRXOGEHUHPXQHUDWHGPRUHWKDQRWKHUHGXFDWRUV 4.2.2 Restructuring State Subsidies for Tertiary Institutions The mismatch between labour demand and supply as a function of problems with supply of labour through tertiary institutions is well-known. We propose the following short-term solutions: v 7KDW WKH FXUUHQW VWDWH VXEVLG\ V\VWHP ELDVHG KHDYLO\ LQ IDYRXU RI WKURXJKSXWV should be restructured to include a (regularly reviewed) ranking of the quality of the LQVWLWXWLRQDQGDQµHPSOR\DELOLW\¶FULWHULRQ,QVWLWXWLRQVUDQNHGDVKLJKTXDOLW\RQHV ZKLFKWKURXJKWKHLUFHUWL¿FDWLRQPDQDJHWRVHFXUHHPSOR\PHQWIRUPRVWRIWKHLU JUDGXDWHVDUHWKHUHIRUHOLNHO\WRDWWUDFWWKHODUJHVWSURSRUWLRQRIWKHVXEVLG\ v $VSHFLDOGLVSHQVDWLRQoutside of current funding envelopesVKRXOGEHVHFXUHG WR VXSSRUW WHUWLDU\ HQUROPHQW LQ DUHDV ZKHUH WKHUH DUH VNLOOV VKRUWDJHV $JDLQ HPSOR\HUVVKRXOGGH¿QHZKHUHWKHVHVKRUWDJHVH[LVW 37 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen 4.3 On Workplace Training 4.3.1 Increasing the Number of Learners 7KHRQHVXEVWDQWLYHDQGIDLUO\XQLTXHUHVXOWWRHPHUJHIURPWKHVXUYH\LVWKDWLQPDQ\FDVHV ¿UPVDUHSODFLQJexistingHPSOR\HHVRQOHDUQHUVKLSV3XWGLIIHUHQWO\OHDUQHUVDUHLQGLYLGXDOV WKDW¿UPVZRXOGKDYHKLUHGDQ\ZD\RULQIDFWKDYHKLUHGDOUHDG\+HQFHDVDQDFWLYHODERXU market policy with the intention of inducing employment effects over-and-above market-driven LQFUHDVHVWKHOHDUQHUVKLSSURJUDPPH±DWOHDVWIURPWKHHYLGHQFHKHUHDQGRQWKLVLQGLFDWRU – appears to have been unsuccessful. :HSURSRVHDJDLQRQWKHEDVLVRIVXJJHVWLRQVIURPPDQ\RIWKH¿UPVDPRUHDJJUHVVLYH learnership programme that would in part: v Increase the number of learners by 20 per cent from its current estimated annual ¿JXUHRIWRDSSUR[LPDWHO\OHDUQHUVSHUDQQXP0DQ\RIWKH¿UPVLQ WKHVXUYH\KDGLQGLFDWHGWKDWWKH\FRXOGSRVVLEO\LQFUHDVHWKHQXPEHURIOHDUQHUV provided that the state covered all the costs of the additional learners. v +HQFHUHODWHGO\ZHSURSRVHWKDWWKHLGHDRIDPDUJLQDOVXEVLG\LVH[SORUHGIXUWKHU DVRXWOLQHGDQGH[SODLQHGLQ%R[7KHEDVLFLGHDLVWKDWWKHVWDWH¿QDQFHVWKH marginal cost of taking additional learners over and above the current intake. This is based on the apparent assumption that the current value of the subsidy SHUOHDUQHUGRHVQRWDFWDVDQLQFHQWLYHWRWDNHRQOHDUQHUVDQGKHQFHOHDUQHUV represent people that would have been trained and employed in any event. A very URXJK¿JXUHLQGLFDWHVWKDWWKHQHWFRVWWRFRPSDQ\IRUDOHDUQHU RQFHWKHVWDWH VXEVLG\ DQG WD[ DOORZDQFHV DUH DFFRXQWHG IRU LV DSSUR[LPDWHO\ 5 SHU DQQXP8OWLPDWHO\WKHQWKLVZRXOGHQWDLODGPLWWHGO\RQH[WUHPHO\URXJK¿JXUHV DWRWDO¿QDQFLDOFRPPLWPHQWRI5PLOOLRQZKLFKLQWKHFRQWH[WRIRYHUDOOVNLOOV development budget14 IDOOV ZLWKLQ WKH H[SHQGLWXUH OLPLWV VHH$SSHQGL[ % ,W LV FOHDUWKDWXQGHUWKHSUHVHQWFRQGLWLRQVZKHUHQRµDERYHHTXLOLEULXP¶HPSOR\PHQW LVEHLQJJHQHUDWHGLWPD\EHDQLQYHVWPHQWZRUWKH[SORULQJ 14 R1.8 billion from the NSF alone is being allocated to SETAs for strategic community level projects and for unemployed learners in learnerships. This excludes R3.1 billionreceived by SETAs in skills development levies. 38 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey 4.3.2 Reinstating Faith in Apprenticeship Training for Manufacturing $VQRWHGDERYHVNLOOVVKRUWDJHVDWWKHHQWU\RUJUDGXDWHOHYHODQGWKRVHDWWKHPLGFDUHHU level are very different in nature. Many firms interviewed tended to agree that there are HQRXJKJUDGXDWHVFRPLQJWKURXJKWKHHGXFDWLRQV\VWHPEXWWKDWWKHTXDOLW\RIHGXFDWLRQ and training is a concern.15$FFRUGLQJWR6PLWKHWDO 6RXWK$IULFDOLNHPDQ\RWKHU FRXQWULHVLQFOXGLQJWKH8QLWHG.LQJGRP 8. $XVWUDOLD1RUZD\DQG1HZ=HDODQGEDVHGLWV learnerships system on a “reinvented notion of apprenticeships”. Learnerships aim to provide workplace training by an accredited training provider by combining structured learning and ZRUNSODFHH[SHULHQFH7KHLGHDLVWKDWWKHWUDLQLQJZRXOGFXOPLQDWHLQDQDWLRQDOO\UHFRJQLVHG TXDOL¿FDWLRQ :KLOHWKHPDLQDLPRIOHDUQHUVKLSVLVVNLOOVDFTXLVLWLRQLWKDVDOVRGRXEOHGXSLQ6RXWK$IULFD DVDW\SHRIHPSOR\PHQWRUZDJHVXEVLG\7KHLGHDZDVWKDWWKH¿QDQFLDOLQFHQWLYHVDWWDFKHG WROHDUQHUVKLSVZRXOGHQFRXUDJH¿UPVWRHPSOR\PRUHZRUNHUVDQGWKDWKLJKHURYHUDOOVNLOO OHYHOVZRXOGLQFUHDVHWKHHPSOR\DELOLW\RIZRUNHUVLQJHQHUDOZKLFKZRXOGWKHQLQGLUHFWO\ OHDGWRJUHDWHUDEVRUSWLRQ7KHSHUFHSWLRQDPRQJ¿UPVLVWKDWOHDUQHUVKLSVDUH SRWHQWLDOO\ YHU\HIIHFWLYHLQSURYLGLQJZRUNHUVZLWKWKHQHFHVVDU\VNLOOVDQGTXDOL¿FDWLRQVZLWKPDQ\ ¿UPVLQGLFDWLQJWKDWWKHLUZRUNHUVEHFRPHPRUHHPSOR\DEOHDIWHUFRPSOHWLRQRIDOHDUQHUVKLS SURJUDPPH+RZHYHUJLYHQWKDWDODUJHQXPEHURIILUPVVLPSO\SXWH[LVWLQJZRUNHUVRQ OHDUQHUVKLSVWKLVVXJJHVWVWKDWOHDUQHUVKLSVDUHSHUKDSVQRWDVVXFFHVVIXOLQWHUPVRIWKH absorption of more workers in the economy. 7KHDGRSWLRQRIOHDUQHUVKLSVZKLFKDVH[SODLQHGHDUOLHULQLWLDOO\VHHPHGWRLPSO\WKHHQGRI DSSUHQWLFHVKLSVLQWURGXFHGDORWRIXQFHUWDLQW\DERXWWUDLQLQJLQJHQHUDO:RUNSODFHWUDLQLQJ for artisans and technicians was in the past based only on the apprenticeship system. The TXDOL¿FDWLRQDWWDFKHGWRDSSUHQWLFHVKLSWUDLQLQJLVQRWQHFHVVDULO\6$4$DFFUHGLWHGZKLFK VLPSO\PHDQVWKDWWKHTXDOLILFDWLRQLVQRWQHFHVVDULO\DOLJQHGZLWKWKHµWUDQVIHUDEOH¶14) V\VWHP4XDOL¿FDWLRQVDUHKRZHYHUJHQHUDOO\UHFRJQLVHGLQUHVSHFWRIWKHVSHFL¿F trade. The training has a more practical focus and this is arguably more important given the nature of WHFKQLFDORFFXSDWLRQV/HDUQHUVKLSVDFWXDOO\LQFRUSRUDWHDUWLVDQW\SHWUDLQLQJEXWDUHDWWDFKHG WRD6$4$UHFRJQLVHGDFDGHPLFTXDOL¿FDWLRQ7KLVKDVVRPHEHQH¿WVWRWKHWUDLQHHLQFOXGLQJ WUDQVIHUDELOLW\DQGUHFRJQLWLRQRIWKHTXDOL¿FDWLRQEXWLWDOVRLQWURGXFHVDQDGPLQLVWUDWLYH EXUGHQWRWKH¿UPUHODWLQJPRVWO\WRWKHUHTXLUHPHQWVRIWKHDVVHVVPHQWSURFHVV 'XULQJWKHLQWHUYLHZVDQXPEHURI¿UPVHVSHFLDOO\WKRVHLQWKHPDQXIDFWXULQJDQGPLQLQJ VHFWRUVFRPSODLQHGDERXWWKHDGGHGDGPLQLVWUDWLYHEXUGHQEURXJKWDERXWE\WKHDFDGHPLF UHTXLUHPHQWVRIOHDUQHUVKLSV)LUPVIHHOWKDWWKHLUFRUHEXVLQHVVFRPSHWHQF\LVWUDLQLQJQRW 15 This may not necessarily be true for university or university of technology-trained engineers. However, it seems to hold for technical workers trained at FET colleges. 39 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen DVVHVVLQJWKHDFDGHPLFPHULWRIDFDQGLGDWH¶VTXDOL¿FDWLRQ7KHPRUHDFDGHPLFRUWKHRUHWLFDO approach is certainly appropriate for many of the occupations that were not previously covered E\DSSUHQWLFHVKLSV7KLVLVHVSHFLDOO\WUXHIRURFFXSDWLRQVLQWKHVHUYLFHVLQGXVWULHVHJFDOO FHQWUHRSHUDWRUVRUDFFRXQWLQJFOHUNV+RZHYHULWLVQRWDOZD\VDSSURSULDWHIRUDUWLVDQW\SH training. The apparent realisation among policymakers (see section 3.4.2) that apprenticeships are LQVRPHLQVWDQFHVPRUHDSSURSULDWHRUSUHIHUUHGE\¿UPVLVDVWHSLQWKHULJKWGLUHFWLRQ$V PHQWLRQHGEHIRUHVWHSVDUHEHLQJWDNHQWRµEULQJEDFNDSSUHQWLFHVKLSV¶DQGWRUHVWRUH¿UPV faith in the future of apprenticeships. These include an announcement by the Minister of /DERXUWKDW¿UPVVKRXOGFRQWLQXHWRHQURODSSUHQWLFHVDQGWKDWKHKDVQRLQWHQWLRQRIUHSHDOLQJ WKHUHOHYDQWVHFWLRQRI$FW$OVRSURSRVDOVDUHEHLQJFRQVLGHUHGWRJLYHDSSUHQWLFHVKLSVWKH same status as learnerships in terms of grants receivable from SETAs as well as BEE points DZDUGHGIRUWUDLQLQJSHRSOH$FOHDUSROLF\VWDQGSRLQWQHHGVWREHWDNHQRQWKHLVVXHDV\HDUV of training may already have been lost due to the uncertain policy environment surrounding workplace training. This does not mean that learnerships should now be abandoned again LQIDYRXURIDSSUHQWLFHVKLSV/HDUQHUVKLSVKDYHWKHLUPHULWVLQFHUWDLQW\SHVRIHQYLURQPHQWV MXVWDVDSSUHQWLFHVKLSVVXLWPDQXIDFWXULQJ¿UPVZLWKDVWURQJIRFXVRQSURYLGLQJSUDFWLFDO ZRUNSODFHWUDLQLQJIRUDUWLVDQVWKDWGRQRWQHFHVVDULO\QHHGD6$4$DFFUHGLWHGTXDOL¿FDWLRQ ,QVWHDGWKHUHIRUHZKDWLVUHTXLUHGLVDFOHDUVLJQDOIURPWKH'HSDUWPHQWRI/DERXUDQGLWV UHVSHFWLYH6(7$VUHJDUGLQJWKHUHODWLRQVKLSEHWZHHQOHDUQHUVKLSVDQGDSSUHQWLFHVKLSVZLWKD YLHZWRHQVXULQJWKDW¿UPVDUHHTXDOO\LQFHQWLYLVHGWRLQYHVWLQERWKOHDUQHUVDQGDSSUHQWLFHV 4.3.3 Being Creative with Learnerships 0DQ\¿UPVKDYHEHQH¿WHGIURPDSSO\LQJOHDUQHUVKLSVLQµQRQWUDGLWLRQDO¶ZD\V7KHOHDUQHUVKLS V\VWHPLVDÀH[LEOHV\VWHPWKDWFDQEHDGDSWHGWRDQ\W\SHRI6$4$DFFUHGLWHGTXDOL¿FDWLRQ 6RPHH[DPSOHVLQFOXGH v 0DQDJHPHQWOHYHO OHDUQHUVKLSV VHH SUHYLRXV GLVFXVVLRQV VHFWLRQV DQG 4.1.2) v Soft skills training (see section 3.3.3) v %ULGJLQJFRXUVHVWRFORVHWKHVNLOOVJDSHJDFFRXQWLQJEULGJLQJFRXUVHVDQGFDOO FHQWUHRU%32FRXUVHV VHHVHFWLRQDQG%R[ 1RWRQO\GRVXFKFUHDWLYHDSSOLFDWLRQVDGGUHVVWKHJUDGXDWHXQHPSOR\PHQWSUREOHPEXWWKH\ may also solve many of the problems faced by employers with regards to middle-management YDFDQFLHVSRRUVRIWVNLOOVRIJUDGXDWHVDQGLQDSSURSULDWHTXDOL¿FDWLRQVDPRQJDSSOLFDQWV 40 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey 4.4 Other Policy Issues 4.4.1 Promoting Bursary Schemes %XUVDU\VFKHPHVDUHXWLOLVHGE\PDQ\ODUJHU¿UPVHLWKHUDVDFRUSRUDWHVRFLDOLQYHVWPHQW or as a core part of the recruitment process. We propose here that the state sets up a EXUVDU\VFKHPHLQFRQMXQFWLRQZLWK¿UPVWKDWZRXOGVXEVLGLVHDQ\net additions to their FXUUHQWSRRORIEXUVDUV+HQFH¿UPVZRXOGEHLQFHQWLYLVHGWRLQFUHDVHWKHLUH[LVWLQJTXRWD RIEXUVDUVDVWKHVHFRXOGSRWHQWLDOO\EHIXQGHGE\WKHVWDWH7KHVWDWHFRXOGRIFRXUVHEXLOG LWVRZQFULWHULDLQWRVXFKD¿UPEDVHGEXUVDU\SURJUDPPHHQVXULQJWKDWHTXLW\JRDOVDQG employment guarantees are secured. Firm-based bursary schemes have a number of distinct DGYDQWDJHV)LUVWO\LWORFDWHVODERXUGHPDQGQHHGVGLUHFWO\ZLWK¿UPVHQVXULQJHIIHFWLYHO\ that the institutions of human capital are supplying the required skills to the labour market. 6HFRQGO\WKH¿UPFDQEHFRPHLQYROYHGPRUHGLUHFWO\LQWKHHGXFDWLRQRIWKHVWXGHQWLQWKH sense that they can provide academic support and guidance as to subject choice – something LQWKLVPRGHOWKDWWKHVWDWHZRXOGQRWQHHGWRSD\IRU7KLUGO\¿UPVFDQRIIHUUHOHYDQWSUDFWLFDO H[SHULHQFHWREXUVDU\KROGHUVE\FUHDWLQJRSSRUWXQLWLHVIRUYDFDWLRQZRUN±DQLQEXLOWZRUN H[SHULHQFHSURJUDPPH)LQDOO\DOOWKLVFRPHVDWDIDLUO\ORZULVNWRWKHFRPSDQ\JLYHQWKH FRQWUDFWXDOREOLJDWLRQVRIWKHEXUVDUWRZRUNIRUWKH¿UPRQFRPSOHWLRQRIKLVRUKHUVWXGLHV,I poached by another employer the bursar would have to pay back the bursary. 4.4.2 Public Graduate Unemployment Databases 7KH'358KDVPDQDJHGWRVHFXUHWZRGDWDEDVHVRIXQHPSOR\HG\RXQJSHRSOH7KH¿UVW IURPWKH8PVRERPYX 41 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen 5. Conclusions $FOHDUXQGHUVWDQGLQJRIWKHQDWXUHDQGH[WHQWRIYDFDQFLHVRUVNLOOVVKRUWDJHVLQWKHHFRQRP\ may help us better understand the graduate unemployment problem. The South African PDQXIDFWXULQJVHFWRUIDFHVVHYHUHVNLOOVVKRUWDJHVLQWHFKQLFDORFFXSDWLRQVVXFKDVDUWLVDQV engineers and scientists. In all sectors shortages of middle- to senior-management personnel was also raised as a concern. These shortages are viewed as critical constraints to accelerated JURZWKLQ6RXWK$IULFD7KHHFRQRP\KDVHQWHUHGDERRPSKDVHIXHOOHGE\ORZLQÀDWLRQDQG LQWHUHVWUDWHVKLJKUHDOLQFRPHOHYHOVDQGLQFUHDVHGSXEOLFLQYHVWPHQWH[SHQGLWXUH7KH GDQJHULVQRZWKDWSURGXFWLRQFDQQRWNHHSSDFHGXHWRVNLOOVFRQVWUDLQWVZKLFKPD\OHDYH government’s 6 per cent growth target a distant dream. ,QDGGUHVVLQJWKHVKRUWDJHVRIVNLOOHGWHFKQLFLDQVDUWLVDQVHQJLQHHUVDQGPLGGOHWRVHQLRU PDQDJHPHQWJRYHUQPHQWKDVSURSRVHGDSROLF\ZKHUHE\LPPLJUDWLRQODZVDQGWKHZRUN SHUPLWDSSOLFDWLRQSURFHVVZLOOEHJUHDWO\VLPSOL¿HGDQGUHOD[HGLQDQHIIRUWWRPDNHLWHDVLHU for people who possess critical skills to enter and work in South Africa. This is an important VKRUWUXQLQLWLDWLYHDQGLIXWLOLVHGSURSHUO\E\¿UPVPD\DOOHYLDWHVRPHRIWKHPRVWFULWLFDOVNLOOV VKRUWDJHVLQWKHVKRUWWHUP$WWKHVDPHWLPHKRZHYHULWLVHTXDOO\LPSRUWDQWWRFXUEWKHORVV of critical skills through emigration with the use of aggressive retention strategies. In the longer run it is to reinvest time and effort towards the development of new skills internally. The restructuring of the FET college system will hopefully improve the quality of WHFKQLFDOWUDLQLQJDOWKRXJKPDQ\KDYHUDLVHGFRQFHUQVDERXWWKHQHZSURSRVHGFXUULFXOD 3URSHUFRQVXOWDWLRQEHWZHHQWKHDXWKRULWLHVHGXFDWLRQDOLQVWLWXWLRQVDQGLQGXVWU\PD\HQVXUH that public education and training is appropriate and quality-driven. Workplace training in the form of learnerships and apprenticeships are generally viewed in a positive light by ¿UPVDQGVKRXOGEHH[SDQGHGDQGLPSURYHGHYHQIXUWKHU:KLOHWKHUHDUHVRPHFRQFHUQV DURXQGWKHHI¿FLHQF\DQGEXUHDXFUDWLFSURFHVVHVZLWKLQWKH6(7$VLWLVLPSRUWDQWWKDW¿UPV buy into the process of training and developing internal talent. Various policy ideas around WKHLPSOHPHQWDWLRQDQGXVHRIOHDUQHUVKLSVDQGDSSUHQWLFHVKLSVZHUHUDLVHGLQWKLVUHSRUW LQFOXGLQJOHDUQHUVKLSVIRUPLGGOHPDQDJHPHQWWUDLQLQJRSWLRQVIRUFUHDWLQJLQFHQWLYHVIRU¿UPV WRLQFUHDVHWKHLQWDNHRIOHDUQHUVDQGUHLQVWDWLQJWKHIDLWKLQWKHDSSUHQWLFHVKLSV\VWHPDVDQ alternative to learnerships where appropriate. If the economy is successful in enrolling more learners it may potentially have a large impact on employment. $VIDUDVJUDGXDWHXQHPSOR\PHQWLVFRQFHUQHGWKHSUREOHPKDVEHHQLGHQWL¿HGDVDVNLOOV GHILFLW3RRUTXDOLW\HGXFDWLRQLQDSSURSULDWHTXDOLILFDWLRQVDQGSRRUVRIWVNLOOVLVFDXVLQJ ¿UPVWRKLUHIHZHUJUDGXDWHVWKDQWKH\ZRXOGKDYHKDGWKHTXDOLW\RIWKHVHODERXUPDUNHW entrants been higher. Reforms have to start at primary and secondary school level with proper HGXFDWLRQDQGJRRGTXDOLW\WHDFKHUVHVSHFLDOO\LQWKHDUHDVRIPDWKHPDWLFVDQGVFLHQFH Career guidance and incentives to students (or academic institutions) to enrol in the right areas 42 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey RIVWXG\DUHFUXFLDO/HDUQHUVKLSVPD\DOVREHXVHGWRFORVHWKHVNLOOVJDSHLWKHUWKURXJK VRIWVNLOOVWUDLQLQJRUEULGJLQJFRXUVHVWKDWSURYLGHQRWRQO\ZRUNSODFHUHDGLQHVVWUDLQLQJ but also retrain graduates in the right study areas. While these are all measures to directly LPSDFWRQJUDGXDWHHPSOR\PHQWRUDWOHDVWWKHHPSOR\DELOLW\RIJUDGXDWHVLWLVTXLWHOLNHO\ WKDWJUDGXDWHHPSOR\PHQWOHYHOVZLOODOVREHQH¿WLQGLUHFWO\IURPVNLOOVDFTXLVLWLRQDWPLGGOH WRVHQLRUPDQDJHPHQWOHYHO2QFHIHZHUYDFDQFLHVH[LVWDQGPDQDJHPHQWOHYHO¿UPVZLOOEH DEOHWRDEVRUEPRUHJUDGXDWHVDVZHOODVVNLOOVDQGH[SHULHQFHZLOOEHDYDLODEOHIRUWUDLQLQJRI young recruits. 8OWLPDWHO\WKHQWKHDERYHVWXG\WKURXJKJOHDQLQJLQIRUPDWLRQIURPQDWLRQDOO\UHSUHVHQWDWLYH VWDWLVWLFVDQGDVPDOOEXWVLJQLILFDQWVDPSOHRIILUPVKDVDWWHPSWHGDQRYHUYLHZRIWKH graduate unemployment issue. It is clear that in both our prognosis of the problem and a VHOHFWEXWKRSHIXOO\IRFXVHGVHWRISURSRVDOVPXFKVWLOOQHHGVWREHGRQHWRUHVROYHZKDWLV probably one of the key constraints to long-run growth in the South African economy. 43 DPRU WP 06/115 Kalie Pauw, Haroon Bhorat, Sumayya Goga, Liberty Ncube & Carlene van der Westhuizen 6. References 'HSDUWPHQW RI +RPH $IIDLUV ³7KH 1DWLRQDO 6FDUFH DQG &ULWLFDO 6NLOOV /LVW´ Government Gazette, No. 28480. Department of Labour (2006a). “National Skills Development Strategy (NSDS) ,PSOHPHQWDWLRQ5HSRUW ´'HSDUWPHQWRI/DERXU3UHWRULD$YDLODEOH online at www.labour.gov.za. Unpublished. 'HSDUWPHQWRI/DERXU E ³5HJLVWHUHG/HDUQHUVKLSVE\6(7$V´'HSDUWPHQWRI/DERXU Pretoria. Available online at www.labour.gov.za. 27 January 2006. )LQZHHN ³(VNRPLQIRUDVNLOOVVKRFN³FinweekSRVWHG0DUFK$YDLODEOH online at ZZZ¿QFR]a. JSE/Liberty Life (2006). “JSE/Liberty Life Investment Challenge.” Available online at http: //university.jse.co.za/Company/top40companies.htm. 10 March 2006. .UDDN$ ³+5'DQGWKH6NLOOV&ULVLV´,QHuman Resources Development. Education, Employment and Skills in South AfricaHGLWHGE\.UDDN$DQG3HUROG+3UHWRULD HSRC Press. .UDDN$ ³7KHFKDOOHQJHRIWKHµVHFRQGHFRQRP\¶LQ6RXWK$IULFD 7KHFRQWULEXWLRQ RIVNLOOVGHYHORSPHQW´Journal of Vocational Education and Training, 57(4): 429- 452. /DZOHVV$ ³1XPEHU 1HHGV$ZDNHXSFDOOWRDGGUHVVWKHFDSDFLW\FULVLVLQ6$ FLYLOHQJLQHHULQJ´SXEOLVKHGRQOLQHDWZZZFLYLOVRUJ]D6RXWK$IULFDQ,QVWLWXWLRQRI Civil Engineering. 1DWLRQDO 7UHDVXU\ ³0HGLXP 7HUP %XGJHW 3ROLF\ 6WDWHPHQW´ 1DWLRQDO 7UHDVXU\ 3UHWRULD$YDLODEOHRQOLQHDWZZZ¿QDQFHJRY]D2FWREHU 1DWLRQDO7UHDVXU\ D ³%XGJHW5HYLHZ´1DWLRQDO7UHDVXU\3UHWRULD$YDLODEOH online at ZZZ¿QDQFHJRY]a 3DSLHU - ³)(7 6HPLQDU 3DXZ.DQG(GZDUGV/ ³(YDOXDWLQJWKH*HQHUDO(TXLOLEULXP(IIHFWVRID:DJH Subsidy Scheme for South Africa.” Paper presented at the Biennial Conference of the Economic Society of South Africa 6HSWHPEHU6RPHUVHW:HVW 3RZHOO/DQG*URHQPH\HU(GLJKHML6 ³7KH,GHQWL¿FDWLRQRI6FDUFHDQG3ULRULW\ 6NLOOV$Q,QWURGXFWLRQWRWKH0HWKRGRORJLFDODQG&RQFHSWXDO&KDOOHQJHV,QYROYHG´ 5HSRUWSUHSDUHGIRUWKH$FFHOHUDWHGDQG6KDUHG*URZWK6RXWK$IULFD $6*,6$ initiative. 6 February 2006. 44 Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey 5HSXEOLFRI6RXWK$IULFD ³0DQSRZHU7UDLQLQJ$FW1RRI ´3UHWRULD 5HSXEOLFRI6RXWK$IULFD ³6NLOOV'HYHORSPHQW$FW1R RI ´3UHWRULD 5HSXEOLFRI6RXWK$IULFD ³6NLOOV'HYHORSPHQW/HYLHV$FW1R RI ´3UHWRULD 6PLWK0--HQQLQJV5DQG6RODQNL* ³3HUVSHFWLYHVRQ/HDUQHUVKLSV DFULWLTXH RI6RXWK$IULFD¶VWUDQVIRUPDWLRQRIDSSUHQWLFHVKLSV´Journal of Vocational Education and Training, 57(4): 539-564. 763 ³$SSUHQWLFHVKLSVDUHQRWGHDG´The Skills PortalSRVWHG)HEUXDU\ Available online at www.skillsportal.co.za. 45