Welcome to the World of Work!

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Introduction

South Africa’s youth can no longer rely on the idea that a qualification – especially a degree – is an automatic license to enter the job market.  In fact, the youth must get used to the mantra: “There are no jobs! But there is work”.

Welcome to the world of work!

The harsh fact is that big many big corporates actively start recruiting high achieving university students after the first semester in the second year.  That is when most academic institutions identify students who have very high marks in the semester exams and who make it onto the so-called Deans’ Lists or Golden Key Lists.  These lists showcase students who are in the Top 20th percentile of academic performance at a university.

Deans’ Listers and holders of Golden Keys are being cherry picked for the positions that prestigious employers have.  In a world where there is an oversupply of persons wishing to entry the job market, students who are not in the top 20th percentile from the second year onwards, find that they have to fend for themselves.

One of the biggest complaints from employers is that freshly ground diplomats or graduates are far from work ready.  Employers point out that young diplomats or graduates are able to regurgitate theory by the reamsful but that are not able to apply that theoretical knowledge in real work situations.  For this reason, many employers choose to recruit people who are already employed at other places.  This means that new entrants with no work experience are automatically disqualified from entering the workplace.

Newly qualified persons are also inculcated with the myth that a degree is the only key to employment.  Some parents and teachers encourage the youth to “go for any degree” because degreed persons have a greater chance to find a job than non-degreed individuals.

Such arguments are blissfully unaware of the fact that the weight of critical skills shortages in the country require artisans, technologists with National Diplomas and practitioners with National Diplomas.  Unfortunately, for the last ten years or so the idea that degrees are essential have done a disservice to professions where lower level qualifications are a requirement.

The media is full of stories regarding youth who say they have N6 qualifications in, for example, Engineering who cannot find any work.  What the youth has never been told by some colleges is that all NATED require specific practical work-related experience and work-related portfolios of evidence before the N-qualification can be awarded.  Sausage machining students through from N1 to N6 and boasting that people are qualified without ever completing the practical component of the NATED qualifications, is deceitful.

All of the above make it seem as if there is no hope for South Africa’s youth.  No matter what they study, it seems that they qualify themselves into a dead end.

Employers, parents and the youth alike, think that all qualifications other than a degree are inferior.  There are, however a range of National Qualifications that are overseen and examined by professional bodies.  Some of the qualifications in this category have a required pass mark of 60% or more, compared to the required pass mark of 50% for all other qualifications.  In addition, since some professional bodies recognise National Certificates, Higher Certificates and National Diplomas in which students meet the required pass mark of 60% or more, it stands to reason that this range of qualifications must be taken seriously.

When employers have to choose between candidates, they should consider which person would be able to add more value to an organisation; the person with a National Qualification that has a required pass mark of 60% and that is recognised by a range of professional bodies, or the person whose qualification has a required pass mark of 50, and whose qualification is not recognised by a professional body?

Above group of non-degree qualifications (60% or more required pass mark and recognised by a professional body) have one more advantage that employers, parents and students should think about.  These qualifications equip the student to understand what happens in the real world.  In addition, being recognised by a range of professional bodies, means that students can start their own professional practices in compliance with the mandates given to them by a whole range of professional bodies.

The end of jobs and the beginning of work

Almost 40% of South Africa’s economy is driven by small and medium enterprises.  In addition, many SMME’s do not necessarily have the skills to offer sustainable products or services to the market.  Some find it hard to understand how to effectively manage, advertise, market, sell.

Why then, could the young person with a lower qualification that is recognised by a professional body not offer their professional services to such SMME?  Would it not make sense to the youth to offer their professional services at a modest fee to an SMME in the community and grow in stature and competence alongside that SMME?

There are no jobs.  But there are thousands of opportunities for anyone who has a qualification, recognised by professional bodies, to create a suite of services that they can offer to the community.

That is the true spirit of entrepreneurship.  It may take a few years to make your first million.  But every millionaire had to start somewhere to convince a hard-nosed client that the product or service offered by the budding entrepreneur can make a sustainable difference to the client and to the economy.

 

 

 

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Structural Collapses: Anger, Empathy and Sadness

 

Growth Institute extends condolences to the families who experienced losses of lives in the aftermath of the structural collapse on 1 February 2019 at the Hoerskool Driehoek[1].

Any loss of life is unacceptable, and the loss of young lives cannot be excused.  Maintenance at South African public schools have been lacking for many years.  The State’s fiscus, being stripped bare by State Capture Initiatives, Bossassa and other forms of economic sabotage, is under pressure to upgrade and maintain schools.  In addition, there is ever-increasing pressure to build new schools and to make good on the reckless promises about free education for all.

Can the State explain to the parents, who lost the children at Driehoek Hoerskool, why it has neglected the school infrastructure and the education system in exchange for enrichment schemes to the benefit of the New Elite?  Can the State also explain how all these self-enrichment schemes contribute to building a strong and competitive economy?

The State should hang its head in shame and self-deprecation.  The fact that this accident happened at a former Model-C school should not be used as an excuse to say someone has a racist motive, wishing to exaggerate the incident beyond all proportions.  Instead, the focus should be on the lives lost and on the aggravating factors of neglect that contributed to this terrible accident.

Whether the accident happened at a so called “White Monopolistic Capital” school or not, the fact remains that this accident was preventable. The fact remains that someone overlooked a potential hazard that should have been removed to safeguard parents and teachers alike.

A thorough investigation must be undertaken and the factors leading to this terrible incident must be identified and dealt with.  If it means that one or many has to lose their jobs because their negligence added to the accident, then let’s deal with the matter as civilly as possible.

We hope that this incident is the first and the last.  Schools are the incubators of tomorrow’s leaders.  Neglect, lack of will to do the right things, elf-enrichment, corruption, hate speech, racism an all other social vices cause these incubators to fail.

And a failed school system translates into a failed nation.

[1] https://ewn.co.za/2019/02/01/four-pupils-killed-after-walkway-collapses-at-vanderbijlpark-school

Kudos, Minister Gordhan!

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The announcement by Minister Gordhan on 6 December 2018 that all leave for senior Eskom managers are cancelled[1], is a fresh breeze.  Growth Institute cannot recall when last did a Minister step in to hold officials to account not because they do not tow the party line but because they did not do their job.

In addition, the fact that the Minister went as far as to speak about the incompetence of Eskom officials[2], sent positive signals such as which South Africa has not seen in many years.  If Eskom is repositioning itself as a business[3], then the question is what has been Eskom’s operational premise in the past.

In 2005, Henry Mintzberg argued that states cannot develop unless its leaders also develop to become competent managers[4].  Mintzberg’s views was based on what he found in Ghana.  Clearly, African leaders – including the long-forgotten Rainbow Nation – are blissfully unaware of the link between competent leadership and a competitive economy.  The exception seems to be Mr. Gordhan.  His insight that economies thrive under competent leadership and whither when political rhetoric is stronger than leadership, is encouraging for all except for the Eskom management team.

For the first time in many years, Eskom senior management will be forced to come out of their ivory towers and practice the old craft (not graft!) of “Managing by Walking Around”.  Corporate Stupidity, said the famous Ed Yourdon, happens when managers are fed half-truths, non-facts and bold-faced lies and when managers accept such defective reasoning to make important decisions, causing the managers to look stupid.  Being forced by the Minister to go see for themselves, will hopefully compel Eskom’s vast cadre of management to discover ugly truths that they cannot blame on wet coal, coal that is too dry, Apartheid, English Colonialism, Dutch Colonisation or whatever other excuse was offered in the past to shy away from managerial incompetence.

The Minister threw down a gauntlet that his predecessors did not have the courage to dare because they were held hostage by a system of incompetence in exchange for patronage.  It will be interesting to see what would happen to the heaps of dead wood that the Minister is about the discover in the next few weeks.  Now is the time to perform painful but necessary surgery not only to pull Eskom from near death but to take actions that will convince investors that managers in public enterprises (Eskom, PIC, Post Office, SAA and many others) will be shipped out if they do not shape up. Hiding behind labour unions and running to courts to hold on to the self-imposed right to stand at a feeding trough where no one controls your fiscal gluttony, must be called out.

Since 2008, South Africa moved from the overall 45th place on the World Economic Forum’s Global Competitiveness Index to the 61st place in the 2017/2018 report.  Dropping 16 places in ten years should be a matter of national disgrace.  South Africa can no longer inculcate a mantra of mediocrity.  It may win votes at the polls but it costs the economy and the country’s standing on the stage of nations.

Instead of “Aloota Continua”, let the surgery begin to heal the economy.

[1] https://ewn.co.za/2018/12/06/eskom-needs-to-get-the-basics-right-gordhan

[2] https://www.fin24.com/Economy/Eskom/gordhan-there-will-be-no-dark-christmas-20181206

[3] https://www.fin24.com/Economy/Eskom/gordhan-eskom-should-be-allowed-to-compete-in-the-renewable-space-20180829-2

[4] http://www.hobest.es/files/articulos-blog/h.-mintzberg-developing-leaders-developing-countries

Youth Unemployment: Wake up, SETA!

youth unemployment

South Africa is in a conundrum regarding our scarce skills shortages.  The Skills Development Act expects industry to train as many people as possible through learnerships.  Industry is willing to engage in learnership programs but there is a growing dissatisfaction in how SETA handles the qualifications that must be issued at the end of each learnership.

Industry is dissatisfied with the fact that SETA can take as long as three years to issue a qualification associated with a learnership.  Delays at SETA to issue qualifications make it impossible for industry to claim part of the tax rebates that they are entitled to.  At present, industry can claim a learnership entry tax rebate of R 40 000 for every person that was placed on a learnership.  For every person with a disability, the learnership entry tax rebate is R 60 000.  For every person that completes a learnership, industry is entitled to a exit tax rebate of at least R 40 000 (or R 60 000 in case of persons with disabilities).

Claiming the learnership entry tax rebate is relatively easy to accomplish.   On the other hand, claiming a learnership exit tax depends on when SETA issues the national qualification that is associated with the learnership.

It can take as long as three years for SETA to issue a qualification and this has a significant knock-on effect on industry’s capability to claim tax rebates after a person completed a learnership.

Incapabilities at SETA to issue qualifications sooner, also means that there are many young people who have studied through a learnership and who cannot get a job until such time that SETA issues their qualifications to them.

SETA’s incapability to issue qualifications in a shorter timeframe scuppers the intentions of the Skills Development Act and it creates an unwillingness in industry to place persons on a learnership.

It is time for the Minister of Labour, the Minister of Education and the Minister of Finance to hold SETA accountable for their inability to issue qualifications on time.  The departments represented by these Minsters are important components in the success or failure of the Skills Development Act.  If anyone of these three Ministries fail to do its part, the entire learnership system is under threat.  Since all three State departments play a pivotal part, levels of cooperation between these departments to issue qualifications on time, is not negotiable.  It must happen and there can no longer be room for a siloed approach to South Africa’s skills crisis.

President Ramaphosa initiated an investor conference that started on 26 October 2018.  One of the expected outcomes of the investor conference is to attract more investments so that more jobs can be created.  Job creation depends on presenting as many qualified people as possible to the job market.

But, if SETA takes up to three years before a qualification is issued, how can jobs be created if industry wants to see that a person is qualified for a specific role?

Until SETA expedites the issue of qualifications, it is not possible to solve one of many complexities associated with South Africa’s unemployment statistics.

Mahala for Billions

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The Mid-Term budget was mute on some of the biggest elephants in the room.

In view of the dirty washing coming out in the State Capture Hearings, the SARS pickle and the VBS Mutual Bank mutually assured destruction, how would the State be able to make good on it promises on free education?

The Minister said there is “nothing for mahala”.  But the State must admit they have in hand mahala for billions.  This makes the doctrine of free education unsustainable.  The Minister has stated that the State’s wage bill needs an intervention.  From an education viewpoint, the one big elephant to cull is the inefficiencies associated with TVET colleges.

Can the nation afford an education system where less than 10% of first years eventually complete a level 4 qualification[1]?  Funding for TVET colleges is based on head count and not on throughput.  In addition, the State pays all salaries for staff at TVET colleges.  The State also foots the bill for the upkeep of all facilities at the TVET colleges.

The Minister should consider a TVET funding model where throughput and not headcount is the norm.  State funding for other public universities and colleges is based on throughput and not on headcount.  There can no longer be a justification to treat TVET colleges different from the rest of the public education spectrum.

For years, the State has spoken about bloated wage bills in the public sector.  To demand that the Minister explains why previous plans to curb the State’s expense have failed, is not appropriate because the Minister inherited a Treasury where word and deed is sorely mismatched.  The real challenge to the Minister will be to act and to make sure that there are effective measures to prevent more leaks in the fiscus.

Now is the time to hold all recipients of State funding to account and to demand that the phenomenon of “billions for mahala” stops.  A State that does not demand counter performance because it wants to safeguard votes at the ballot has only itself to blame.  History is not the reason for the current wasteful expenditures that the State experiences.  Greed and the urge to get rich quick is the other big elephant in a room.  A tender that charges R 40 for 500 millilitres of bottled water Is not in the best interest of the State.  Instead it is one of the many small rodents that decays the State’s primary responsibility of delivering services to the people.

The TVET education system must explain why less than 10% of students who started an NC(V) 2 program eventually finishes with an NC(V) 4 qualification three years later.  The low real throughput rates at TVET colleges is a big concern to an economy that has an ever-growing skills crisis.  The NC(V) 4 qualification is equivalent to a Grade 12.  In order to stand out and to contribute to the workeracy movement, there is a demand for more persons that have diplomas at Level 5 and Level 6.  In addition, the State must insist that students meet all course requirements (including practical work components) before TVET colleges award a qualification.  The current practice to ignore the practical work components, leaving students with incomplete qualifications, must stop.

The Global Competitive Index shows a strong correlation between the quality of education and the overall competitiveness of an economy.  That is a fact that the Minister cannot ignore.  If South Africa is honest with itself, must acknowledge how more than ten years of populism and fiscal leakages have been detrimental to the country’s competitive stature.

Strong leadership, discipline, holding wasters to account must be the focus areas going forward.  In the end, the strength of a nation is measured by the strength of the economy and not by the numbers at the ballot.

[1] https://city-press.news24.com/Voices/is-it-time-to-ditch-the-national-certificate-vocational-20181002