1. Aligning skills development to your business strategy
By Marion Bell
on behalf of
HRD Training and Consulting
Not about compliance – how can be used for competitive advantage….? 1

2. AGENDA Skills development and business strategy Pivotal Grants
BBBEE and skills development 2

3. QUIZ – Question 1 The role of the SDF is to:
Develop a Workplace Skills Plan (WSP)
Promote, co-ordinate and implement training interventions
Report on skills development activities in the Annual Training Report
Option 1 and 3
Option 1, 2 and 3
None of the above

4. QUIZ – Question 1 Option 1, 2 and 3.
Some SDF’s don’t realise that they are also responsible for the implementation of the training – the SDF function does not end with the submission of the WSP/ATR . Training must be promoted, co-ordinated and implemented by the SDF.

5. QUIZ – Question 2 The training year runs from: 1 July to 30 June
1 April to 31 March
1 January to 31 December

6. QUIZ – Question 2 1 April to 31 March
This allows 3 months for the WSP/ATR to be completed and submitted to the relevant SETA

7. QUIZ – Question 3
How many employees must a company have before they are required to establish a training committee: 50
100
250
500

8. QUIZ – Question 3 50 Employees
The training committee must be representative of all employees, unions and management.

9. QUIZ – Question 4
A Training Needs Analysis is used to determine the skills requirements for a particular job or position
True
False

10. QUIZ – Question 4
False
A Training Needs Analysis is used to determine the training needs of the job incumbent, after the skills requirements of the position have been determined through a Skills Analysis.

11. QUIZ – Question 5
Which of the following methods could be used during a Training Needs Analysis?
Review of the Sector Skills Plan
Questionnaires sent to managers
Interviews with employees
Review of the Employment Equity Report
Analysis of the Organisation’s Strategic Goals

12. QUIZ – Question 5 All the above Don’t forget to also include the:
Operational Objectives
BEE Requirements
Possible Staff Movements (Succession Plans)
Skills Priorities
Scarce and Critical Skills
Job Descriptions
Personal Development Plans
Training Committee Minutes

13. QUIZ – Question 6
Which of the following questions should NOT be included in the Questionnaires or Interviews:
A SWOT Analysis of the department
Scarce and Critical Skills in the department
New Technologies planned by the department
Employment Equity requirements
BEE requirements
Learnerships required by the department
Learning culture in the department
Understanding of job requirements and how these link to Strategic and Operational Objectives
Training required
Attitude towards training

14. QUIZ – Question 6
All the questions should be included in the questionnaires and interview sheets,
Once the document analysis, questionnaires and interviews are completed the SDF prepares a Training Needs Analysis Report.

15. QUIZ – Question 7
The Training Needs Analysis Report does not need to be approved by the Training Committee – only by top management.
True
False

16. QUIZ – Question 7
False
The Training Committee must approve the Training Needs Analysis Report. The Training Committee should also approve the Training Providers used, the training budget (in conjunction with the Finance Department) and the Training Priorities, identified in the Training Needs Analysis.

17. What date is the WSP/ATR due each year?
QUIZ – Question 8
What date is the WSP/ATR due each year?

18. QUIZ – Question 8
30th June

19. Compliance vs. Strategy
Most organisations go through the motions of completing the WSP/ATR for reasons of compliance – and to get 50% of their Skills Development Levy returned
The prime objective should rather be –
“How can we use this process to assist the organisation to achieve it’s Strategic Goals and Objectives?”

20. Development of Organisations
Organisation Vision
Stakeholders
Strategic Objectives
Stakeholders and Directors
Operational Objectives
Managers

21. Operational Objectives
Managers (and HR) have a responsibility to INTEGRATE the Strategic and Operational Objectives into the actual work to be performed by employees.
This crucial step is often missed – Strategic and Operational Objectives are added or tacked on as “Quarterly Objectives” or “Key Performance Areas”, that are never translated formally to an employee’s job description.
If the job description is updated, then the Skills and Training Needs Analysis process is easily facilitated.

22. Establishing Training Priorities
Establish what training most supports the organization priorities… consider:
Organisation’s Vision
Strategic Objectives
BBBEE Reporting
Alignment to Employment Equity Plan
Improved performance
Improved motivation
Alignment to the skills priorities identified by the SETA
Scarce skills
Critical skills

23. Matrix for Training Priorities
Matrix that reflects the prioritisation of training needs
Planned training interventions
Criteria for selection
Total score
Priority
Contribution to vision and objectives
Reason
Alignment to skills priorities identified by the SETA
Contribution to motivation of employees
Contribution to EE Plan
Budgeting Course 8
Part of objectives is to improve financial control in organisation. 10
SETA identified financial training as a skills priority. 5
Employees already motivated. 9
Development of T Sekhute is part of EE Plan. 32 2
Leadership Development Course
In management positions. Must have planning skills.
Not identified.
Both employees are on EE Plan. 27 3
Project Management Certificate Programme
Organisation plans to implement huge projects.
SETA identified project management training as a skills priority. 34 1
MS Word Course
n.a.
Will motivate employees.
Not part of EE Plan 24 4
Administration training
The organisation needs administration skills
SETA identified administration skills as a skills priority.
Will recruit learners from outside.
Will not contribute directly. 23

24. Promote, Co-ordinate and Implement Training
Promote a learning culture in the organisation
Provide managers and employees with training related information
Schedule training interventions
Co-ordinate training interventions and logistical arrangements
Evaluate training interventions
Keep all training records for possible audits
Liaise with the relevant SETA

25. Discussion Point
Do you face any obstacles when performing your SDF functions?
How do we bridge these challenges?

26. Pivotal Grants
12 January 2012, Blade Nzimande, Minister of Higher Education and Training announced his intention to repeal the SKILLS DEVELOPMENT ACT, 1998 (ACT NO. 97 OF 1998)
Changes include
Introduction of Pivotal Grants
Tighter control of monies not paid out for mandatory and discretionary grants

27. New Grant Structure Grant Types 2005 – 2010 (NSDS II)
2011 – 2016 (NSDS III)
Mandatory Grants
50%
WSP & ATR = 40%
Pivotal Grant = 10%
Pivotal Grants
N/A
As above - Pivotal Grant 10%
Discretionary Grants
20% according to defined criteria per SETA

28. What are Pivotal Grants
Mandatory Grants are being reduced from 50% to 40% of the Skills Development Levy.
The balance of 10% of the Skills Development Levy can only be claimed if “formal” study is completed.
Formal study includes university and FET courses that include structured learning at work – e.g. apprenticeships, learnerships, internships, skills programmes. Please refer to your SETA.
Formal study excludes short courses and non-unit standard aligned training.
Open to all race groups, employed and unemployed.

29. Additional Pivotal Funds
A SETA must allocate a pivotal grant to an employer for a learning programme at a level determined by the Director General through a general circular to all SETAs to fund learners on pivotal programmes inclusive of funding of University of Technology students and FET College graduates subject to verification by the SETA to a maximum of 10% of total levies paid by the employer.
In addition, subject to sub regulation (1), a SETA may allocate additional pivotal grant funds to an employer for pivotal programmes, should the employer have spent more than 3% of their payroll on training as reported in the pivotal training report and verified by the SETA.

30. Other conditions of the Act
With effect from 31 March 2013 all surplus funds in a SETA for each financial year must be transferred to the pivotal grant fund within 10 working days after 31 August annually.
With effect from 31 March 2013 all surplus funds in a SETA for all previous financial years must be transferred to the pivotal grant fund within 10 working days.
If the employer does not claim a mandatory grant within the time period specified in sub regulation (2), the SETA must transfer the employer's unclaimed mandatory grant funds to the pivotal grant fund.

31. More conditions…
A SETA must not pay a mandatory grant and pivotal grant to an employer who is liable to pay the skills development levy in terms of section 3 (1) of the Skills Development Levies Act, unless the employer-
has registered with the Commissioner in terms of section 3 (1) of the Skills Development Levies Act;
has paid the levies directly to the Commissioner in the manner and within the period determined in section 6 of the Skills Development Levies Act;
is up to date with the levy payments to the Commissioner at the time of approval and in respect of the period for which an application is made;
has submitted a Workplace Skills Plan and pivotal training report (PTR) that contributes to the relevant SETA sector skills plan as contemplate in section 10 (1) of the Act within the timeframes prescribed in regulation 5 (2) of these Regulations;
with effect from 1st April 2012, has submitted and implemented its workplace skills plan for the previous financial year to the extent that it satisfies the criteria for implementation that must be established and approved by the SETA Accounting Authority based on guidelines provided by DHET; and the WSP and ATR are approved by relevant organised labour structures.

32. When will this come into effect?
The legislation is apparently on hold until next year
Some of the SETA’s are implementing for the current training year (2012/2013), others have said they would wait for the /2014 training year.
Check with your SETA!

33. What do you, as the SDF, need to do… to claim maximum BBBEE points through skills development?

34. What is BBBEE?
Broad-Based Black Economic Empowerment is a process of assisting and educating previously disadvantaged black individuals to enable them to contribute to the economy.
Black individuals is a generic term which means Africans, Coloureds and Indian people who are South African citizens.
A scorecard is a verified report on your current BBBEE status according to the DTI (Department of Trade and Industry) Codes of Good Practice.

35. Elements of the BBBEE Scorecard
Up to 2010
2011
Proposed changes 2012
Ownership
20 Points
1. Ownership
Management Control
10 Points
Consolidated with Employment Equity
Combined to form “2. Employment Equity”
Employment Equity
15 Points
Skills Development
3. Skills Development
Preferential Procurement
25 Points
Combined to form “4. Supplier Development”
Enterprise Development
Socio-Economic Development
5 Points
5. Socio-Economic Development

36. 4. Skills Development
This is money spent developing black individuals to increase their knowledge and skills in the business environment.
To score points:
The organization must be registered with the relevant SETA.
The organization must have workplace skills plan in place.
The organization must have implemented a programme targeted to developing priority skills generally and specifically for black employees.
Any bursaries to be repaid by employees, partially or completely, do not constitute expenditure by the organization for Skills Development

37. Learning Programme Matrix
Cat
Narrative Description
Delivery Mode
Learning Site
Learning Achievement A
Institution-based theoretical instruction alone – formally assessed by the institution
Institutional instruction
Institutions such as universities and colleges, schools, ABET providers
Recognised theoretical knowledge resulting in the achievement of a degree, diploma or certificate issued by an accredited or registered formal institution of learning B
Institution-based theoretical instruction as well as some practical learning with an employer or in a simulated work environment – formally assessed through the institution
Mixed mode delivery with institutional instruction as well as supervised learning in an appropriate workplace or simulated work environment
Institutions such as universities and colleges, schools, ABET providers and workplace
Theoretical knowledge and workplace experience with set requirements resulting in the achievement of a degree diploma or certificate issued by an accredited or registered formal institution of learning C
Recognised or registered structured experiential learning in the workplace that is required after the achievement of a qualification – formally assessed by a statutory occupational or professional body
Structured learning in the workplace with mentoring or coaching
Workplace
Occupational or professional knowledge and experience formally recognized through registration or licensing D
Occupationally-directed instructional and work-based learning programme that requires a formal contract – formally assessed by an accredited body
Institutional instruction together with structured supervised experiential learning in the workplace
Institution workplace
Theoretical knowledge and workplace learning, resulting in the achievement of a South African Qualifications Authority registered qualification, a certificate or other similar occupational or professional qualification issued by an accredited or registered formal institution of learning E
Occupationally-directed instructional and work-based learning programme that does not require a formal contract – formally assessed by an accredited body
Structured, supervised experiential learning in the workplace which may include some institutional instruction
Workplace and some institutional as well as ABET providers
Credits awarded for registered unit standards F
Occupationally-directed informal instructional programmes
Structured information sharing or direct instruction involving workshops, seminars and conferences and short courses
Institutions, conferences and meetings
Continuing professional development attendance certificates and credits against registered unit standards (in some instances) G
Work-based informal programmes
Informal training
Increased understand of job or work context or improved performance of skills

38. Learning Programme Matrix
The Learning Programme Matrix serves as a comprehensive guide on the types of Training Programmes that should be embarked upon
The Learning Programme Matrix is not an exhaustive list of such Learning Programmes
Training should be accredited by a local or international accreditation body
Only expenditure on learning programmes as per the Learning Programme Matrix are considered. Category G may only account for 15% (Informal workplace programmes.)

39. Recent and suggested changes to the Skills Development Component
Broadened the beneficiary base to include external skills development initiatives
Broadened the learnership sub-element to include apprenticeships and internships
Provided definitions for learnerships, apprenticeships, internships and absorption and other supporting definitions
Removed work-based training that does not require a formal contract from the Learning Programme Matrix (namely: categories F and G)

40. The Skills Development Elements
The Skills Development Scorecard comprises 3 elements
Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for black employees as a percentage of the leviable amount using adjusted recognition for gender
Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for black employees with disabilities as a percentage of the leviable amount using adjusted recognition for gender
Number of black employees participating in Learnership or Category B, C and D Programmes as a percentage of total employees using the adjusted recognition for gender.

41. The Skills Development Scorecard
Indicator
Points
Target
1. Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for black employees as a percentage of leviable amount using the recognition for gender adjusted 6
3% of leviable amount
2. Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for black employees with a disability as a percentage of leviable amount using the recognition for gender adjusted 3
0.3% of leviable amount
3. Number of black employees participating in Learnerships or Category B, C and D Programmes as a percentage of total employees using the adjusted recognition for gender
5% of entire workforce

42. Adjusted Recognition for Gender (ARFG)
Black women
ARFG is applied to the calculation for black women in Learning Programmes
Black representation is halved and the black female representation is added
Black female representation is limited to 50% of the prescribed target for that element

43. Disabled Employees Disabled employees have …
A physical or mental impairment
Which is long-term or recurring and
Which substantially limits their ability to work
Only expenditure on black disabled people can be claimed
The target is only 0.3% of the leviable amount

44. Leviable Amount…
The BEE auditor will audit a claim by the measured entity in terms of Skills Development Expenditure for black employees. The final accepted result will be expressed as a percentage of the “leviable amount”.
The “leviable amount” bears the meaning as defined in the Skills Development Levies Act of 1999 as determined using the Fourth Schedule to the Income Tax Act and is essentially the entire payroll of the measured entity in the financial year under review.
Only expenditure on learning programmes as per the skills matrix is accounted for and can be claimed. The claim for “Category G” training is limited to 15% of the total claim.

45. Skills Development Expenditure
100% of Certified Learning Programmes (Uncertified are capped at 15%)
Facilitator costs
Venue costs
Administration and Stationary costs
Meals and Refreshments
Costs not included:
Employee’s salary and travel expenses
Scholarship/Bursary costs to be reimbursed by the employee

46. Example of a Schedule for Element 1 and 2
Types of Training Courses
Learning Programme Matrix Category
ABET Programme
Total Number of Attendees
Number of Black People Attended
Number of Black Women Attended
Number of Black Disabled People Attended
Costs
Policies and Procedures G No
120 53 23 5
2950
Microsoft Excel E 33 12 19 2
3300
Super Selling F 25 14 9
15000
MBA A 1
9000
Total Training Cost

47. Documentation and Information Required
Internal Training:
Attendance registers
Certified copies of ID’s
Proof of costing of internal training
Bursary agreements
Might ask to interview trainee
External Training:
Proof of payment
Proof of attendance

48. Types of Enterprises 3. Generic Entity (Large Entity)
1. Exempt Micro Enterprise (EME) – (Small Entity)
Annual turnover is less than R5 million. These organizations automatically 100% BBBEE compliant to a BBBEE level 4.
If there is 50.01% or more black ownership, then automatically 110% BBBEE compliant to a BBBEE level 3.
2. Qualifying Small Enterprise (QSE) – (Medium Entity)
The Annual Turnover is between R5 million and R35 million.
The QSE can use four of the seven elements to determine the BBBEE status. (Suggestion for 2012 – all 5!)
3. Generic Entity (Large Entity)
A generic scorecard will be completed annually for all organizations with an annual turnover of more than R35 million – on an annual basis.
The organization will be required to be verified on all seven of the BBBEE elements.

49. BBBEE Levels
The BBBEE levels are broken down in 9 levels by an Accredited Verification Agent.
Level 1 being the highest ranking contribution level and Non-Compliant Contributor being the lowest.
Based on the overall performance of a Measured Organization
The BBBEE points are as follows:

50. BBBEE Points and Levels
BBBEE Status
2010
2011
Recognition Level
Level 1
> 100 points
135%
Level 2
> 85 but < 100 points
> 90 but < 100 points
125%
Level 3
> 75 but < 85 points
> 85 but < 90 points
110%
Level 4
> 65 but < 75 points
> 80 but < 85 points
100%
Level 5
> 55 but < 65 points
> 75 but < 80 points
80%
Level 6
> 45 but < 55 points
> 70 but < 75 points
60%
Level 7
> 40 but < 45 points
> 55 but < 70 points
50%
Level 8
> 30 but < 40 points
> 40 but < 55 points
10%
Level 9
< 30 points
< 40 points 0%
Code 10
Certificate Expired
Code 11
Spend excluded (client once-off payments, internal spend)

51. Any Questions????