Maximizing your Returns on Skills Initiatives


With South Africa’s current constraints to grass roots and tertiary education, employers can improve not only the productivity of their employees but also the quality of their employees’ personal circumstances. Thereby not only contributing to the economy of South Africa, but changing the world of work.

This is a call to action for employers to place a higher emphasis on employee training and development, understanding that it is an investment not only in their business but the economy in which they operate in. There are multiple benefits to training your existing workforce: Increased productivity and performance; Increased employee engagement; and Reduced employee turnover; amongst others. However, this comes at a cost.

This article is focused on bringing awareness to employers on the relief measures available when providing meaningful training to their employees and the simultaneous benefit to both the individual and the business in this evolving world of work..

What training takes priority within my organization?

Before addressing the relief measures, the training that takes first prize will always be compliance training based on sector/industry specific requirements. This training, although a headache keeps the doors open, however often it is the only training done due to it being a legislative requirement.

1. Compliance Training:

This training is required based on industry specific criteria and needs to be prioritized. It keeps the business in operation and compliant with certain acts such as Occupational health and Safety and Employment Equity Act.

2. Operational Training:

The next priority is the organization’s need to operate effectively and efficiently. Often this takes the form of internal training on own systems and processes, ensuring optimal operations. This could include external providers in certain industries where accreditation or a qualification is required.

3. Technological Training:

The third priority is training required for technological advancements and systems such as the Microsoft Suite of application to master the ever-evolving technology in which many operations take place. This enables an employee to work remotely and flexibly which is hugely desired and sought after in the new world of work.

4. Further Human Resource Development.

Another priority is to develop the leaders of the future by developing employees on a personal level, equipping them with leadership and business skills, which enables them to progress within the workplace. This, unfortunately, is prioritized last due to the limited available budget which is utilized to cover compliance required training.

Understanding the way in which training is prioritized, helps guide an organisation on where to spend their limited available budget.

In addition to accurately prioritizing the type of training your workforce requires, employers are faced with the challenge of prioritizing who receives training within the workforce and where the bulk of their budget is spent. Legislation like B-BBEE and Employment Equity (especially the amendments to the Act) reaffirm the need to train Black employees and those from designated groups. This strategy will help employers achieve their sectoral targets from the limited available talent pools of suitably qualified people.

Employers have the opportunity through their training initiatives to achieve compliance across multiple Acts and simultaneously ensure the future of their businesses, through strategic workplace training plans and ongoing learning that prepare their existing employees for future success.

Relief measures available in executing more than what your current budget allows

Within South Africa, employers whose annual payroll/wage bill is equal to or above that of R 500,000 are required to a Skills Development Levy to SARS which is equal to 1% of their annual payroll amount. This contributes to the country’s overall skills development needs within the workplace as defined in the Skills Development Act 97 of 1998 as well as the Skills Development Levies Act 9 of 1999.

Employers who are contributing to this National Fund for skills development in South Africa and who comply with the Skills Development Act, can claim 20% back through their relevant Sector Education and Training Authorities (SETA’s). If employers don’t claim back this percentage, the business is essentially subsidizing the training implemented by other companies, including their competitors.

Employers can also benefit from other funding and tax incentives through their participation in discretionary grants and Learnerships for both employed and unemployed people. These tax incentives are lucrative and make larger amounts of funds available for other training needs, such further Human Resource Development (the last of the priorities).

The available relief measures to employers through the SETA Grants and Tax Incentives are designed to increase and encourage employers in the private sector to participate in further developing their workforce as well as the large number of unemployed people in South Africa who are of age to work but lack the relevant skills to enter the job market. Tapping into this pool of funding is vital in reducing the actual spend from the employer’s funds.

With the latest improvements in technology, training has become incredibly accessible through e-learning and virtual training and has become an effective way to reduce the overall cost of training for qualifications and online skills programmes for the entire workforce. In the changing world of work, training is readily available at the click of a button and on your own time.

Employers need to ensure they are benefiting from such initiatives with the associated relief measures so that they may retain and attract top talent, slash the cost of training and can train even more people on high quality qualifications than ever before.

For more information on the above topic, please contact LabourNet Eastern Cape at Regional Support: 087 292 5808. Contact: Phikolomzi Malamlela (060 6428 659) at or Lindy-Lee Roseberry (066 038 5551) at or Robert Niemand (082 824 7359) at

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