Learnerships…… Addressing multiple stakeholder needs. Frank Groenewald October 2003.

Learnerships……Addressing multiple stakeholder needs.

Frank Groenewald October 2003

Today's Business

• Strategy

• Structure

• Process

• Current status

The Strategic Context: Different Stakeholders = Different Needs

Environment Key features

Political • Sector transformation performance and prospects under critical scrutiny• Transformation charter under construction – pressure for meaningful change• Election looming – pressure for creation of employment opportunity• Increasing costs of compliance with spirit and letter of statutory demands

Economic • Sector performance solid• Jobless economic growth in sector • Equity markets under pressure – significant cost pressures in sector

organisations

Social • Unemployment highritical/advanced skills supply very limited• Exaggerated in the case of PDI’s

Technological • Have seen rapid increase in capability, but..• Telecoms remain problematic• E-learning well-understood, but…• Digital divide creates entry-barriers to technological arena and constrains utility

Legal • Equity legislation creates transformation pressure• Funding line established through SDLA & SETA• Realisation of NSDS targets being driven hard by DoL• BANKSETA mandate constrained and under pressure• PFMA compliance non-negotiable• Lifespan of SETA’s uncertain

Physical environment

• Safety and security remains problematic• Absence of affordable public transport means that geographic dispersion of

people remains as a constraint

Learnerships: Problem statement

• In the context of transformation imperatives, jobless sector growth, pressure on internal training costs, the challenge is to conceptualise and implement a learnership strategy that will enable sector learner targets to be met.

• The strategy must add business value, satisfy political imperatives, minimise negative business impact, comply with legislative requirements, be economically practicable, and must be implemented in short time-frames.

The strategy must:

• add business value, • satisfy socio-economic imperatives, • maximize positive and minimise negative

business impact, • comply with legislative requirement, • be economically practicable, and • must be able to be implemented in short

time frames.

Levers

• Focus learnerships on areas where demand for skilled staff is highest as a consequence of scale and labour turnover

• Accommodate learnership recruits within existing recruitment patterns as far as possible, such that learnership candidates meet real staffing needs.

• Focus national need learnerships on a small number of generic learnerships with large numbers of learners

BANKSETA’s Strategic Objective

• To facilitate the rapid scaling up of learnerships in the sector to meet identified demands, such that negative business impact is minimised and business benefit is maximised.

• To achieve the above within the constraints of available funding.

This objective can be achieved by applying strategic principles…This objective can be achieved by applying strategic principles…

Different categories of learnerships and of learners exist

Learnership

Category

Characteristics Strategy implication

National need • Will have to focus on skills required at entry level, where there is no intrinsic skills shortage and where the banks have been relatively effective in meeting their organisational skills needs

• Therefore driven primarily by socio-political imperatives

• Unemployed PDI’s, primarily school leavers, possibly some graduates – Sec. 18.2

• This environment represents the greatest opportunity for driving large numbers of learners, but will also pose the greatest challenges to add business value

Transformation • Driven primarily by managerial \ leadership transformation imperatives

• Moderate numbers required• However, intense competition in the labour market

for these resources will mean that remuneration will have to be well referenced to market

• PDI’s with tertiary education – Sec. 18.2 and 18.1• Note that learnership-based qualification for this

target market will have to be carefully designed in order to ensure that is attractive to prospective entrants, who would be interested in career prospects.

• Learnerships in this may represent the greatest opportunity for learnerships to add business value, but present the greatest challenges to drive numbers.

• However, in order to meet inherent skills requirements in this arena, routes other than learnerships may well be more attractive – learnerships may not yield the greatest returns on investment. Bursaries are an obvious example.

Niche • Driven by skills requirements as well as transformation imperatives

• Numerical targets in line with equity requirements, but at discretion of organisations

• Small numbers reflected to date, although this may change

• These learnerships will contribute to NSDS target realisation.

• They will support BANKSETA service delivery to stakeholders.

• Once again, alternative routes may be more attractive.

• The current approach could be maintained – fund start-up, but leave evolution to market forces.

From a numbers point of view, transformation learnerships are a subset of the national need learnerships

National need n=5000

Transformation n=1250

Niche n=?

Strategic Principle # 1: Focus for impact

Challenges Levers

• Add value • Drive numbers• Minimise set-up costs and the

administrative burden • Minimise operational costs• Minimise unemployed staff at

end of learnerships

• Focus learnerships on areas where demand for skilled staff is highest as a consequence of scale and labour turnover

• Accommodate learnership recruits within existing recruitment patterns as far as possible, such that learnership candidates meet real staffing needs, if this does not violate the sector’s undertaking.

• Focus national need learnerships on a small number of generic learnerships with large numbers of learners

Large numbers can be absorbed more easily using this approach.

A key question is however whether the numbers committed to are to be considered to be over and above normal recruitment intake.

Large numbers can be absorbed more easily using this approach.

A key question is however whether the numbers committed to are to be considered to be over and above normal recruitment intake.

Strategic Principle # 1: Focus for impact

Category Leverage

National need /

Transformation

Niche

Unique leverage point for driving

numbers – focus here

Limited leverage point for driving unique value – focus here

Limited leverage point for driving

NSDS targets

Strategic Principle # 2: Minimise negative business impact

Challenges Levers

•The work load associated with such numbers of learners is going to be onerous.

– Recruitment and selection– Orientation– Formal training– Coaching and mentoring– Assessment– Learner management and

administration

•The costs associated with such administration will be duplicated if carried individually by banks.

•The funds available through the BANKSETA should be leveraged for maximum advantage

• Provide maximised support in each of the areas of need, centralised at a sector level.

• Minimise the role of in-house training providers

• Develop and utilise generic solutions as far as possible

– Work processes– Training providers– Training interventions– LMS– QMS– Etc.

Centralised support will create efficiencies and economies of scale, keeping unnecessary work out of the banks themselves. The support

could be provided to all learnerships, not only the large ones.

Centralised support will create efficiencies and economies of scale, keeping unnecessary work out of the banks themselves. The support

could be provided to all learnerships, not only the large ones.

Principle #2 presents two implementation options

Option Pros Cons

#1 – “Make” a support

infrastructure

• Costs exclude margin - cheaper

• Time - longer

#2- “Buy” a support

infrastructure

• Time - shorter • Costs include margin – more expensive

The cost factor is likely to be the overriding consideration.The cost factor is likely to be the overriding consideration.

Employment & Skills Development Agency (ESDA)

ESDA:• Centralised support function • Create efficiencies and economies of scale • keeping learnership-associated responsibilities

within the banks to a minimum. • Leverage funds available from the BANKSETA

WHY• To facilitate the rapid scaling up of

learnerships.• To minimise negative impact and • To maximise potential benefits

Strategic Principle # 3: Make the detail work, not the concept

Challenges Levers

•Understand the resource implications

•Translating the concept into operational reality within acceptable timeframes.

– Identify detail of proposed sector entity in respect of mandate, governance and control, operational infrastructure and funding requirements, etc.

•Ensuring that the risks associated with the imitative are identified, fully understood, and properly mitigated

• Early adoption in principle• PLAN!• Assess feasibility• Action only once understood –

‘failure to plan is to plan for failure’.

Outsourced resources should be used in order to achieve focus, appropriate competency deployment, and quick turnaround.

Outsourced resources should be used in order to achieve focus, appropriate competency deployment, and quick turnaround.

Funding

Category Funding arrangement

National need /

Transformation

• Funding priority – budget allocation over 3 years.

• Cost must be understood in detail• Value of this initiative is traded-off with other possible initiatives.

Niche • Capped allocation of funding for start-up on an annual basis.

• R300 k per learnership from strategic grants, capped annually by council decision.

Funding

• The initial projection…..R267 000 000.00• 50% …….• BANKSETA:

– 80% of the sector strategic fund over a three year period ( Approved)

– R6 000 000.00 from the 2002/3 sector strategic fund ( approved)

• 50%….…• The BANKSETA will seek a grant from the NSF

for the remaining cost – R138 000 000.00 ( in process R 25000.00 per learner)

• Graduates subsequently employed by the banks will incur a cost.

Summary

Strategic Principle Recommendations

1. Focus for impact •Make an impact by focusing on the optimal leverage point for intervention – ‘national need learnerships’

•Drive numbers by focusing efforts on a limited range of sector wide learnership initiatives

•Simplify each learnership by using whole qualifications, and using primarily distance learning for delivery

2. Minimise negative business impact

•Create a dedicated sector delivery vehicle

3. Make the detail work • Appoint consultancy to produce detailed business plan and feasibility analysis for early adoption

Agreements thus far…

• The Accelerated Learnership Initiative will:– Develop 5000 learners over a 3 year period– Develop Matriculants and Graduates at a

75% to 25% ratio– Focus on ‘whole’ qualifications and not Unit

Standard based qualifications– Source qualifications in line with the sector

priority skills need– Ensure the inclusion of entrepreneurial and

generic business skills in the qualifications to allow for cross sector deployment of learners on completion

Agreements thus far…(continued)

• The BANKSETA will facilitate the process on behalf of the banking sector by:– Obtaining commitment for the project

targets from all stakeholders (DONE)– Assisting the Institute of Bankers (IoB) to

be registered as an Employment and Skills Development Agency (ESDA) (In process)

– Agreeing with the banks to provide for the workplace component of the learnership. (DONE)

– Accepting overall responsibility for project delivery. (DONE)

• Allow for changes in banking operating environment

General

• Way forward• Time lines• Process agreements