What the HR Manager Should Know About the Future of SETAs

As the HR Manager of a company looking to improve their workforce through learnerships, you will already be familiar with SETAs. If you are not, here is a quick review:
We currently have 23 SETAs and they function to coordinate skills development across different industries. They accredit training providers in order for these providers to offer the necessary training to employees going through a learnership. There are, however, a few problems associated with the current SETA systems.

The Problems

After the changes which took place in 2009, the SETAs have improved after the integration process but they still have problems. Let us take a look at a few of these problems:

  • Admin costs of SETAs are very high.
  • SETAs vary in their methods and regulations which cause confusion for training providers involved with multiple SETAs.
  • SETAs have annual targets but some of them have failed to achieve these pre-defined numbers. One of the reasons for this is that they fail to disperse the funds made available to them for training purposes.
  • Employers from all sectors complain about delays in grant allocation.

The Proposed Way Forward

Currently, the SETAs are being reviewed and a possible way forward will be made public within the next few years. But you may have seen the headline in City News that said “Blade Nzimande set to scrap SETA’s” in 2015.

The following proposed changes have been made known to the general public:

  • SETAs will be known as SETABs and act as advisory boards only. It was suggested that a few SETAs will fall under one SETAB. No more funds will be allocated by the SETAs themselves. Instead, companies in need of funding will submit documentation to the SETABs who, in turn, will motivate them to the National Skills Fund. The decision lies in the hands of the NSF. If they deem a company worthy, the will distribute the funds to the company via the SETAB.
  • Mandatory Grants will be 20% of all Skills Development Levies paid to SARS. This levy will be paid by all South African companies whose payroll amount paid to their employees exceeds R500 000. The amount to be paid to SARS will be 1% of the entire payroll. These funds will go to the NSF, with SARS keeping 2% for administration purposes. The NSF will keep 18% for their own administration and the SETAs will receive 10% of this for their own administration with a further .5% going to the Quality Assurance Board. The remaining funds would be used for training grants.

For more information about the future landscape of SETAs, go to our Contact Us page and get in touch.

I-Fundi Article by Susan Long