How to Speak to the CFO about Learnerships

“Our greatest asset is our workforce.”

Every CEO says this but not every CEO means it. This is not an accusation. It is simply a fact in the world of business.

In our beautiful country, unemployment is on the rise. And from a business perspective, you need to consider your B-BBEE score if you want to take your company to new heights. To kill two birds with one stone, you will need to turn to learnerships if you want to make a difference both in your company and in your community. But how do you, as the Human Resource Professional, convince the CFO that learnerships are the way of the future? You have to remember that the CFO thinks differently to you. They think in rands and cents. So how do you move the CFO of your company over to your side? You have most likely guessed by now. You will need to speak in rands and cents to the CFO.

The Research

There are numerous ways to fund learnerships. In some instances, your company will not even spend a cent. Over the course of the next few weeks, we here at i-Fundi will bring the research to you. We will tell you the secret pathways you can explore to help you on your way to write a stellar proposal document to the CFO and, ultimately, the CEO. And we will even speak in Rands and cents to make the proposal you will write easier to understand by a person interested in the money aspect of your business.

The Meeting

Make that appointment, sit in front of your CFO and explain with confidence how learnerships will benefit the company. At this point, you will speak mostly about finances and how many new clients your company can gain with a higher B-BBEE score. Will you help slay the unemployment problem? Yes, but you can keep that as a footnote depending on the person to whom you are talking. Any CFO will be so impressed with the financial aspect that you will not need to mention any other benefits. If your company happens to have a heart for the people who work in the organisation, then you can colour in the picture with talk of unemployment and of how learnerships will improve the lives of the employees.

Do you have a question about learnerships? Do you need guidance when it comes to talking to your boss about Human Resource problems? Do not hesitate for a moment to get in touch with us. Fill in the form found on the Contact Us page and we will be in touch as soon as possible.

Tax Incentives Extended

The Employment Tax Incentive and the Learnership Tax Incentive were under review within recent months and on Friday 9th December, the South African government extended the Learnership Tax Incentive for five years, and the Employment Tax Incentive for two years. What’s more, the R20 million cap was removed following some concerns about “higher levels of potential employment.”

As you know, the Employment Tax Incentive is in place to encourage employers to hire inexperienced youth by reducing the cost of hiring such an individual. The Learnership Tax Incentive encourages skills development. In the upcoming weeks, we here at i-Fundi will take a closer look at these two tax incentives to see the financial benefits they hold for your company when you implement learnerships.

If you would like to know more about the Employment Tax Incentive and the Learnership Tax Incentive and how these can help your business to fund learnerships, get in touch with us by filling out the form on our Contact Us page or call us direct at 011 290 5900.


Implementing Learnerships

By Stefan Lauber

Companies often ask where they can find learners.

There are numerous options.

A company may choose from the many applications that they receive over time. The unemployment problem in South Africa ensures that you will always find desperate job seekers handing in their CVs.

A company may also work through a recruitment agency or they may partner with schools or non-profit organisations, particularly if they are looking for disabled learners. An approach that works well is for companies to ask their employees for referrals. Your staff members know your company’s culture and would not like to embarrass themselves by introducing wrong candidates to you. Showing how your company makes an effort to reduce unemployment through learnerships can also greatly increase employee engagement. When screening the applicants, the old adage, “recruit for attitude and train for skills” is still correct. But make sure that you define first what can be trained and what cannot.

However, Learnerships are not only for the unemployed. Companies can enrol their staff on a national qualification recognised by SAQA, and research has shown that skilled staff members perform better. Numerous surveys have also shown that millennials are looking for growth on the job when choosing their employers. To retain their staff, organisations need to communicate clearly how their career paths match with ladders of learning and increased earning power. Developing staff also builds leadership, which in turns helps again with attrition. As the saying goes, an employee leaves a bad manager, not a company.

An organisation that is properly implementing a learnership will attract many benefits. The workshop clearly showed how companies could develop their own talent pipeline, while reducing costs and contributing to Broad-Based Black Economic Empowerment. Companies not yet aware of the new BB-BEE codes will have to acquaint themselves with them because they are already in effect.

Grow Your Own Exceptional People – Just Add Learnerships

By Stefan Lauber

Staff members in every company feel that they are overworked and that they could use help from people who have been well trained and who know what they are doing. Did you know that you have the opportunity to train your staff, even if you have no additional funds? Since the learner’s salary can be counted as training expenditure, learnerships are one of the easiest ways to boost your training spend within your current budget. In that way, you can earn up to 20% of the total BB-BEE score and another 5 points if you hire the learners at the end of the learnership.

However, earning BB-BEE points at minimal cost is only one concern. How can employers be confident that learners add real value to their business? Common wisdom suggests that the performance of learners with no previous experience would lag behind that of experienced hires. The results contradict that assumption. We see time and again that learners trained by i-Fundi perform exceptionally well. One of the reasons is the quality of the training, and another reason is that learners are highly motivated; they are eager to prove themselves and are grateful for the opportunity to apply their new skills.

Being able to prove the value of learnerships is essential if learnerships are to become a pillar of a company’s talent management strategy. Human Resource practitioners need to speak the language of business, which is rands and cents. They need to show the Return of Investment of their initiative. Although everyone agrees with that, a few clients systematically measure their returns.

Aegis, a leading international outsourcer, compared the performance of recruits with experience against that of learners with no experience on an international project. The learners outperformed hires with previous experience within the first 30 days, and were retained for longer even though their salaries were lower. They were also less absent and more punctual, a fact I personally attribute to their eagerness to succeed. They knew they had been given a massive break and wanted to work hard to give something back.

Who should manage the implementation of a learnership programme? Someone who really enjoys developing people. Learners can sense whether a company has their interest at heart or not. They commit if they feel that you genuinely care about them.

Only a few companies are willing to deal with the administrative burden of having their training accredited. They would rather work through an external training provider. Companies have to make sure that a provider’s accreditation is current. Being able to obtain SETA certificates for the learners is obviously vital but often easier said than done. Not only must a provider be able to meet all the requirements of a SETA but it must also be able to drive the process to cut through red tape. Therefore, it is important for an employer to check references with previous clients and possibly even talk to the relevant SETA.

Having implemented over 10 000 learnerships, we have learned that you need strong project management skills. Before starting, both parties need to agree on roles and responsibilities, scope and the schedule for the project—all of which become part of a Service Level Agreement. Apart from that, your partner must be committed to walking the distance with you, and to resolving any issues as soon as they arise.

Providers must have the experience to design a programme in such a way that the schedule does not conflict with operational needs. Asking learners to complete large amounts of work outside the classroom is also doomed to fail as many learners leave home very early in the morning, returning late in the evening. Yet the programme still needs to meet the standards of SAQA. Being able to balance these conflicting needs requires a mature provider.

In order for you to claim your BB-BEE points and to take advantage of the available tax incentives, it is important to keep a record of all the necessary documentation. This in itself is not too difficult but requires attention to detail. Particularly important is to make sure that your company completes its yearly Workplace Skills Plan (WSP) and returns the Annual Training Report (ATR) to the relevant SETA. Without it, you can’t score any BB-BEE points for skills development.

A Quick Overview of Funding for the B-BBEE Skills Development Requirement

By Stefan Lauber

With the introduction of the Broad-Based Black Economic Empowerment (BB-BEE) codes, companies have little choice but to implement learnerships. The question is no longer “should you implement learnerships?” but rather “how do you actually get started?”

According to the B-BBEE codes, companies will have to spend 6% of their payroll on the accredited training of previously disadvantaged individuals and need to enrol 5% of the total number of employees on a learnership. Compared to the old codes, the bar has certainly been raised—6% is a large sum. Companies are asking themselves, “How we can get the best Return on Investment if we spend such a huge amount of money?”

In our experience, many of i-Fundi’s clients are no longer just concerned about how to tick the boxes on their compliance checklist. Even though South Africa has over five million unemployed people, companies struggle to find the talent they need to succeed. BB-BEE skills development programmes are increasingly becoming part of an organisation’s talent management strategies. Companies are tired of the recruit, train and poaching cycle. They have decided that they need to grow their own talent because not only is it much cheaper, it also produces a much better calibre of people. We have clients who have made learnerships the main entry point into their organisations.

Funding these programmes has been a major challenge. Typically, organisations have relied on grant funding, be that through the SETA they belong to or other government-sponsored programmes, such as Monyetla. However, given the success of these programmes, there is simply much more demand than that there is money available. Employers do need to find more creative ways to fund such programmes.

Fortunately, South Africa has a very supportive policy environment. A recent i-Fundi workshop showed that companies could hire and train learners at virtually no extra cost if they were to take advantage of the available Learnership Tax Break, the Employment Tax Incentive and the lower salaries paid on learnerships. These savings are virtually equal to the cost of hosting a learner, including training and allowances. In essence, you are getting free labour. Who would not like that?