The True Cost of Training

In our practice, we often encounter views from employees who express their frustration with the fact that training is not regarded as being “part of the budget”. In other cases, requests for training are denied because companies see that as an unnecessary expense. Even when we deal with business managers when asked to propose a training program to them, the cost card or the budget card is played ever so often.

We agree in principle that companies have to be as frugal as possible in regards to expenditure. However, it remains somewhat of a puzzle why companies would diligently pay skills development levies but do not take action to leverage the recovery of the skills development levy through training.

Government’s skills development strategy puts emphasis on equipping as many people as possible with useful qualifications. There are specific directives in terms of tax rebates that can be claimed for training that leads to a qualification. In fact, the skills rebate model, if used properly, translated into the recovery of 80% or more of training costs.

SARS offers entry rebates and exit rebates on training programs that lead to a qualification.

Getting the entry rebate is relatively easy. The exit rebate, on the other hand, is linked to a qualification that must be achieved within a given period. Here lies the problem for many companies.

Not many learners actually finish a qualification. There are many reasons for learners not finishing what they started. The one reason that is in direct control of companies is the way employees are selected for training.

Companies who have strict selection criteria stand a greater chance to qualify for exit tax grants than those that simply want to tick a few compliance boxes.

For more details on optimising tax benefits, contact us for an appointment.

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The Elephant of Opportunity

SETTING THE SCENE

Never in the history of this country has unemployment been as high as it is.  Never in the history of the country are there so many desperate youth wanting to have an opportunity.   Never in the history of a country are there so many willing to give others a chance.

Opportunity

THE REALITY

Why is it then, that those who are offered an opportunity simply shy away from it?  They flee as if an angry elephant wants to take out its wrath on them.  The fact that someone gets and opportunity and not use it, remains a great puzzle of humanity.

It is not often that a company is willing to provide a free education to an unemployed person.  In fact, this opportunity would have been part of a twelve-month internship, after which the candidate would have had a chance to be employed in a full time capacity.  Certainly, an opportunity such as this cannot be missed?

LESSONS FROM THE REST OF THE WORLD

MEET CHRIS

220px-Chrisgardner

Chris Gardner’s story is told in the movie “Pursuit of Happiness”.  It tells how Chris had to compete at all odds for job as a stockbroker.  Days went by where Chris did not have any hope but he kept on trying and trying – knowing that he needs to persevere if he wants to have a plum opportunity at a world famous firm.  There were days that Chris believed the whole world turned its back on him.  But Chris knew that giving up was not an option.

GOOGLE INTERNSHIPS

Google internships are highly sought after.  Though thousand apply to be admitted on an internship, only a few hundred are given the chance.  And, of the few that are given a chance, only a fraction may be lucky enough to be offered a job at Google.

There are many similar stories all around the world where thousand compete for a single opening that may or may not be offered to them.  Yet, it does not discourage those hopefuls to TRY by being the best!  With the exception of a few, candidates that compete for chances such as the Google Internship are highly qualified.  The come out of college or university with very high marks.  In fact, many finished their degrees or diplomas CUM LAUDE.

COMING BACK TO THE QUESTION

Being offered a bursary to study for free AND to earn a monthly internship stipend certainly provides some sort of stability to a person that would have been destitute otherwise.  Is some income – no matter how small – not better than no income at all?  Is a free education not better than no education at all?

In Afrikaans there is a saying that could be directly translated as “complaining with white bread in hand”.  There was a time that white bread was the epitome of luxury in Afrikaans culture.  Thus, the saying means that someone who has some luxury (even a modest white bread) will still find time to complain.  Being offered a free education is exactly the same a complaining with white bread in hand.

Recently, Growth Institute offered someone a chance to get an education.  At first, the person was eager to get on board.  But when the person was asked to come in for an interview, all sorts of excuses come out.  Thus, a golden opportunity was wasted.

THE AGE OF ENTITLEMENT IS OVER!

There seems to be a riddle of entitlement in this country and that it simply erodes all our competitive advantages faster than we can build such competitive advantage.  It is time to realise the age of entitlement is over.  We can choose to move forward by our efforts or to decay in our own unwillingness to try.

In Search of Readiness

STATING THE MYTH

School leavers need a bridging course before they can attempt to enrol at a university for a degree or diploma.  In addition, those who do not passed Grade 12 with at least a 70% average will NEVER be able to go to university.  Last, those who have only Grade 10 and Grade 11 are forever doomed to be part of a low paid and underqualified workforce.

DEBUNKING THE MYTH

Whilst it is true that not all school leavers cannot immediately enrol into a university program, there are options available to anyone who thinks that he/she will never be able to go to university.  In fact, anyone who cannot be admitted to a university today can indeed prepare him/her over a period of four years to obtain a professional qualification that will allow that person into a degree program.

Insufficient admission points at the end of Grade 12 do not mean all doors to tertiary education have closed irrevocably.  In addition, a person that passed Grade 10 or Grade 11 actually has an equal chance to obtain a university degree one day as long as they completed a professional qualification with an accredited institution such a Growth Institute.

Growth Institute’s Achiever Program© is linked to professional qualifications in Accounting and Business Administration.  This program allows students to qualify with a National Diploma (NQF 6) within three to four years.  After students obtained their National Diplomas, they can apply to a local university where the can enrol into a bridging program that steers them towards a B Com. Honours degree in Business Management.

FACING THE FACTS

The fact is that many students who are presently enrolled at university fall out in the first year.  They become discouraged and live with a belief that they will never be able to obtain a tertiary qualification.  This “Horde of Disillusionment” is one of the biggest contributors to skills shortages in South Africa.

However, students who first enrol into programs such a Growth Institute’s Achiever Program, stand and greater chance to obtain degrees after three to four years’ study at a lower level.  These students have a great sense of accomplishment and achievement.  In addition, they are valuable knowledge assets to an organisation because:

  1. They are often forced to study part-time
  2. They have an opportunity to link theoretical knowledge with practical experience while they study
  3. They are committed students and workers because they have more at stake than their peers who are full time students

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HOW A CHOCOLATE BAR TRANSFORMED A COMMUNITY

There once was a man in Pennsylvania.  An ordinary man that made chocolates.  This man may not have made the best chocolates in the world.  In fact, the Mexicans, Belgians and the Swiss are far better at the art of chocolate making.

But the legacy of this man went far beyond chocolate.  He made a difference to a whole community.

Meet Milton

Milton Hershey 2

This man’s name was Milton Hershey.  He lived in Hershey Pennsylvania.  And, yes, he made Hershey chocolates.

Why talk about Milton Hershey?

Mr. Hershey was a businessman – the founder of the Hershey Chocolate Company.  And he was a far-sighted philanthropist.  Employees of his company had access to schools, hospitals and other community services that were all paid for by the Hershey Chocolate company.  In fact, Hershey, Pennsylvania is known as a “Company Town”.

Milton Hershey can be remembered as a person who invested in many aspects of a community.  From our perspective, we salute Milton S. Hershey for his investments in the schooling of Hershey employees and others.

So What?

Not a day goes by in South Africa where someone is not pointing to, what they say is, a failed state.

  • Government is expected to build more schools
  • Government is expected to improve the quality of education
  • Government must….
  • Government must….

For the last eighteen, Growth Institute has advocated that corporates should take more initiatives and replicate the efforts of Milton Hershey in Pennsylvania.  Although there are many CSI projects about, not many (if any) come close to the efforts of Milton S. Hershey.

Some say that a dream of our own, South African, “Hersheyville” is preposterous because it does not befit corporates to be that kind.  Others argue that it is simply impossible.  A third group emphatically states that one should not step in where Government seems to fail.  They argue that stepping in worsens the perceived education crisis instead of improving on it.  Of course a fourth group argues that such an idea is a colonial vestige of Apartheid and that such heresy needs to be eradicated to preserve “our Africanness”.

A Breath of Fresh Air

The criticism against efforts such as that of Milton Hershey almost let us give up on the hope that there is still hope for our weak education system.  Then, yesterday happened.  We had an appointment with a prospective new client.  This client is a big international corporation and we were stunned by the fact that they have been working on the same ideas as did Milton Hershey.  This prospective client does not make chocolates.  They are a big engineering firm who took up a challenge to make a difference in this country.

Being involved in a school and having built three academies from scratch in a relatively short time, signals that this company takes the upliftment of communities very seriously indeed.

They are what Francis Hesselbein refers to, a circular company.  In other words, this company exists in a community.  They recruit employees from the community and educate those in the community that do not have a fair chance in a failing school system.

Effect on Sustainability

In less than three years, this company started to see an improvement in the quality of their own workforce.  Staff is expected to participate in training program, and staff is expected to pass course well above the required pass mark for such course.

Those close to retirement age are given an understudy to make sure that years of knowledge is transferred.  In other words, a legacy of experience in ploughed back into the minds and actions of the next generation of workers.

In addition, workers are constantly ready to move into senior roles because the company spent their Skills Development Levy wisely so that succession plans hardly are scuppered by the non-availability of those who need to step into vacant positions.

In short, this company has built itself a sustainable pipeline to attract people that are willing and eager to learn and to make a difference in their own personal circumstances.

Thank you for your vision, Mr. Hershey

The Fear of Learnerships

Fear

Industry sentiments

  • “We feel cheated. They never deliver what they promise!”
  • “The certificates being issued are worthless.  It is just pieces of paper”
  • “Relieving critical skills shortages? Really?  Tell me something new!”

The reality

For a very long time, industries have been exposed to solutions that cost them more than the benefit they are supposed to harvest from it.  Thus, it is no wonder that industry is sceptical about learnership programs.  And rightly so!  Over the last 28 years, Growth Institute’s directors have gained valuable insights into the world of skills development.  We need to concur that there are operators out there that can, in the kindest form, be described as selfish profiteers.

Unfortunately, the actions of some have extremely negative effects on the Skills Development Community.  It is time to rethink the reality.

A threat to sustainability

It is a fact that the state of skills in South Africa puts organisational sustainability under threat because:

  • An unskilled workforce has limited opportunity for career advancement
  • An unskilled workforce is incapable of making critical decisions when faced with a situation that customers or managers rely  on them
  • Organisations are forced to appoint supervisors or managers “from the outside” – often at a great cost because there are simply no suitable internal candidates for positions.  In addition, “outsiders” often experience a long learning curve before they can start to add value to an organisation
  • Customers have little or no tolerance for anyone appearing to be incompetent despite having spent hours in the training room

A call to action

Recognition

Organisations need to consider the outcome of any training program or skills development program carefully.  Not all programs lead to actual qualifications that are recognised by the South African Qualifications Authority (SAQA).  Programs that do not lead to an actual qualification often stand in the way of an organisation who wants to claim skills development rebates from the South African Revenue Service (SARS).

International Recognition

Next, many operators boast about “International Accreditation”.  This does not mean that such a qualification is better than a local version.  Unless SAQA lists the qualification and unless the qualification has not expired, skills development grants and SARS rebates may not be possible.  Thus, organisations are often disillusioned because what they were promised was not what they experience.

Performance

Organisations place candidates on a learnership program in the hope that such candidates will add knowledge value to the organisation.  Often, however, Growth Institute encounters candidates that do not have the basic scholastic aptitude to succeed on a learnership.  To ensure the best possible value for a learnership, a “Middle Down” approach may be appropriate.  In other words, give preference to current and future leaders.  Once that core is strengthened, expand the program into the rest of the organisation.  Clients who follow such “Middle Down” approach seem to identify operational inefficiencies quicker than those who follow a shotgun approach.

Linking a learnership to performance goals incentivise people more than simply being put in a training room.  One of our clients linked performance, promotions, salaries, bonuses to the degree of success that employees have on a learnership program.  For this client, the term “Bottom Ten Per Cent” has taken on a complete new meaning.  In fact, performance levels have increased by more than 75% over the least five years.

Bridges

Organisations, who allow for the design and implementation of bridging programs that assist those with limited scholastic ability, reap greater rewards over time.  Often, the leap that a worker must make from his/her current position to a tertiary certificate or diploma is greater than the proverbial “Quantum Leap”.  Those who are not taken through a bridging intervention before attempting a first tertiary study simply fade away in the first few months.

Conclusion

Small adjustments to current or future learnership programs can make a world of difference!

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The Grudge of Skills

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The Grudge of Skills

In a recent edition of the WITS Business School’s Journal, the old tune to kick-starting the economy with entrepreneurship, skills development and infrastructure has again been echoed.

In principle these ideals make sense but in practice, the picture is sometimes (if not most of the time) far removed from reality.  Entrepreneurship and infrastructure development require deep skills bases.

In the contemporary discourse, “Skills Development” is mentioned in the same sentence as “BBBEE Scorecard”.  In fact, some in industry regard the two concepts as the same syllable.  Because there is a perception that skills development is always a result of the BBBEE scorecard, industry regards it as a grudge purchase.

  • They feel the BBBEE scorecard is enforced without rhyme or reason
  • Some in industry simply want to spend on training so that “the right boxes and be ticked”
  • Others attempt efforts to make a success of skills development but their internal capabilities are inadequate to ensure successful skills development programs

In addition, companies above a certain turnover must pay Skills Development Levies to the State.  The idea being that the State has, via Skills Development Levies, a pool of funds that can be used by industry to alleviate skills shortages in the country

In a short survey done by Growth Institute, it was remarkable how many we companies we encounter that do not make use of the opportunities created by tools such as Skills Development Levies, SARS Rebates and SETA grants.  It seems a mystery as to why opportunities as lost.

The survey did show that some segments in industry reveal the classic Ticker© behaviour.  In other words, regulatory compliance and true skills development are two mutually exclusive matters.

Tickers© do not care about giving skills improvement or skills building opportunities to employees and communities.  Ticker©-based learnerships create immense frustration for trainers, facilitators and employers alike because the calibre of learner is simply unique and almost not capable to obtain valuable and practical insights from learning interventions.

As long as Tickers rule, for so long will this country be exposed to circle arguments about moving the economy forward by means of skills.

This is the official blog of Growth Institute (PTY) Ltd.

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http://www.growthinstitute.co.za

Sustainable Recruiting

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CONFERENCE: SUSTAINABLE RECRUITING

Date and Venue: 9 July 2015 at the Birchwood Conference Centre, Viewpoint Road, Bartlett, Boksburg

TOPICS OF THE DAY

  • Burning Platforms on BBBEE and Skills Development
  • Softening the impact of the new B-BBBEE codes on recruitment
  • Equipping recruiters for the 2024 recruitment landscape
  • Implementing vetting solutions to avoid costly mistakes
  • Becoming an indispensable part of skills development solutions
  • Recruiting disabled candidates
  • Overcoming scares skills challenges
  • Panel Discussion

REGISTRATION AND COSTS:

All key decision makers and senior managers at recruitment and HR companies receive preferential rates as shown hereunder

Early registration discounts. Invoices for tax purposes will be generated on request.

Early Registration (before 12 June 2015) – Recruitment and HR Practitioners R 2 600-00 per delegate
Standard Registration (until 1 July 2015) – Recruitment and HR Practitioners R 3 000-00 per delegate
Early Registration (before 12 June 2015) – Others R 2 800-00 per delegate
Standard Registration (Until 1 July 2015) – Others R 3 000-00 per delegate
10% Group discount (for 5 or more from same company)
EFT ONLY: Bank details will appear on booking invoice

 BOOKING

Book for the event by clicking on https://podio.com/webforms/12283610/842372

Proof of payment for all bookings as well as all dietary requirements must be send to us as an attachment via the booking form.

TERMS AND CONDITIONS FOR THIS EVENT

  1. SPACE TO THIS EVENT IS LIMITED AND ALL REGISTRATIONS ARE HANDLED ON A “FIRST COME, FIRST SERVED” BASIS.
  2. ALL BOOKINGS REQUIRE A 100% DEPOSIT ON RESERVATION.
  3. GROWTH INSTITUTE RESERVES THE RIGHT TO RESCHEDULE THIS EVENT IF IT DOES NOT MEET OUR MINIMUM NUMBER OF DELEGATES REQUIRED TO HOST THE EVENT.
  4. DELEGATES THAT CANNOT ATTEND THE ORIGINALLY BOOKED EVENT CAN TRANSFER THE BOOKING TO SOMEONE ELSE IN THE SAME COMPANY.
  5. GROWTH INSTITUTE WILL NOT CONSIDER REFUND REQUESTS IN CASE THAT SOMEONE CANNOT ATTEND THE EVENT. INSTEAD, DELEGATES WILL BE OFFERED A SEAT (FREE OF CHARGE) TO A SUBSEQUENT EVENT ON THE SAME TOPIC.
  6. ALL PAYMENTS TO BE MADE VIA EFT AT TIME OF BOOKING.
  7. PAYMENT REFERENCE:
    1. PLEASE USE YOUR NAME OR THE NAME OF YOUR ORGANIZATION AS A REFERENCE.
    2. PLEASE PREFIX YOUR REFERENCE WITH REC2024
  8. LIMITED EXHIBITION SPACE IS AVAILABLE TO DELEGATES
  9. DELEGATES WHO WISH TO MAKE USE OF SAID EXHIBITION SPACE SHOULD NOT NOTIFY GROWTH INSTITUTE IN WRITING.
  10. IN CASE OF (10) ABOVE, GROWTH INSTITUTE RESERVES THE RIGHT TO CHARGE AN EXHIBITION FEE OF R 5 000-00 (FIVE THOUSAND RAND) PER DELEGATE
  11. DELEGATES SHOULD CONSULT WITH THEIR TAX CONSULTANTS WHETHER THE COST OF THIS EVENT CAN BE CLAIMED FROM SARS. GROWTH INSTITUTE DOES NOT MAKE ANY UTTERANCES ABOUT DELEGATES’ ABILITY TO MAKE SUCH CLAIMS TO SARS
  12. SUBMITTING BOOKING FORMS AND PAYMENTS FOR THE EVENT TO GROWTH INSTITUTE AND/OR ITS APPOINTED AGENTS CONSTITUTE ACCEPTANCE OF THESE TERMS AND CONDITIONS

Official Blog of Growth Institute (PTY) Ltd

http://www.growthinstitute.co.za