POLITICAL ANALYSIS: Why Business Needs to Own Transformation
4th April 2017

We saved a client R300,000 on workplace skills planning. In One Meeting

WSP And ATR
BEE Novation
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BEE Novation

BEE novation is a Durban and Pietermaritzburg based company that helps businesses improve their BEE status while reducing costs.
BEE Novation
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Skim-reading just the bolded text may save you time

 

Workplace Skills Development (WSP) and Annual Training Report (ATR) Have Significant Impact on Bottom Lines

We recently recommended a skills development plan to a client that cost R300 000 less than the one the business had intended to pursue. Businesses typically benefit from free staff and staff training as it reduces some of their operational costs significantly. The upskilling and vocational involvement of staff can increase productivity by about 400%, according to Harvard Business Review.

The deadline for submitting WSPs and ATRs to your SETA is the the 30th of April. (If you do not know which SETA you fall under or have had no contact with them, phone or email us urgently). Companies that fail to correctly complete and submit these documents will receive zero points on the skills’ development element of their BEE scorecards.  This will leave their competitors with relatively stronger BEE scorecards, greater chances of getting mandatory and discretionary grant money from SETAs, and better-trained workforces. The Review says the “skills gap persists mainly because employers are unwilling or unable to pay market price for the skills they require.” In South Africa, employers are paying a skills levy but many don’t make the most of what they’ve paid for.

It’s not enough for just one company to submit its WSPs correctly. If its stakeholders (clients, suppliers, service providers and business partners) don’t do so as well, it may still lose BEE points for working with companies with weaker scorecards. It may be beneficial to check that the companies in your directory are not only B-BBEE-compliant, but retain or grow their points by observing this milestone. We help protect our clients’ scorecards by ensuring their stakeholders are following through with their WSPs.

Given that businesses already pay a skills development levy, legislation defines the rules of a profitability and liquidity competition some are winning at, and others aren’t. It’s the same rules and same framework for everyone:

  1. BEE indicates how many of which people should be put on learnerships, as well as the points their employers can earn for compliance.
  2. An understanding of skills development clarifies which learnerships those learners should be put on.
  3. Learnership management ensures an Annual Training Report that’s reflective of the previous year’s Workplace Skills Plan for maximal grant pay-out from the SETA. It also secures BEE points.
  4. A knowledge of how SARS works helps businesses get tax rebates of up to R80 000 per learner per annum (e.g., if your company had 10 learners on learnership, SARS could give you up to R800 000 in tax rebates).
  5. An understanding of Employment Equity helps prevent fines (starting at R1.5 million for a first-time offense), legal action and reputational damage.
  6. If your business doesn’t connect these five tools for a stronger return on investment, it leaves more skills levy money available to your competition, making them more likely to become more profitable and cash-flush than you. Their financial benefits compound, while you experience unnecessary obstacles.

If you’re concerned your business will miss the deadline or some aspect of the process, contact our offices for help completing your WSPs and ATRs for submission to your SETA so you can also get all your BEE points.

 

Additional Information

In case you’re not completely convinced that a sound training plan makes business sense, you may also read this Forbes’ article, and this one.

The first article is titled, Why Your Employee Training Is A Waste Of Time And Money — And What To Do About It. The gist of it is that big companies often have “no strategic focus to their training. Companies don’t train employees in the skills most critical to the business’s stage of development. They send the wrong people to the training, over-train them and spend too little time on implementation”:

“For training to have real value, your company must first have a clear strategy and execution plan in place.”

And,

“Spend less, not more. Successful training doesn’t require millions of dollars. Using more effective methods will reduce what you spend.”

The other one is titled, Why Employee Development Is Important, Neglected And Can Cost You Talent. It opens with this observation:

“It’s hard to think of an important aspect of management more neglected than development planning — helping your employees shape the future direction of their careers. Yet for a variety of reasons, this valuable activity is often ignored… or handled as a bureaucratic exercise… or an afterthought.”

We hope these articles will help persuade you give more thought to the value of well-planned training. As Benjamin Franklin and Winston Churchill reputedly said, “Failing to plan is planning to fail.” We can help you plan more successfully.

 

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