Skills burden haunts CEOs

The latest PwC research‚ released on Thursday (9 May)‚ says 25% of SA CEOs are contemplating a major change in their strategies for managing talent over the next 12 months.

The global survey of over 1‚300 CEOs points to the availability of key skills as the second biggest threat to business growth‚ after the increasing tax burden (63%).

This comes as SA's government cuts mandatory grants‚ or reimbursements‚ that are paid back to companies who engage in sector education training‚ from 50% of the 1% payroll levy to 20%. A study of the training system had found lots of false claims from employers and the use of private consultants to deliver only short-courses that did not carry qualifications or deliver priority skills.

"Businesses are struggling with a widening mismatch between the skills of their workforce and the skills they need to achieve strong growth. There needs to be a joint approach to addressing the problem‚ with businesses and governments working together to plug the skills gap‚" said Gerald Seegers, director of human resource services at PwC.

Skills investment

CEOs are willing to improve their investment in skills too - 61% plan to increase investment in their workforce over the next three years.

Cost-cutting remains a priority for the vast majority of CEOs‚ with 84% of CEOs saying they have initiated restructuring activities in the past 12 months. "The years of cost reductions have brought risk‚ mainly around people. Morale and employee engagements have taken a knock‚" said Seegers.

While the sector education system has been criticised for raising the tax burden and being ineffective‚ government hopes the changes it is implementing will improve workplace training - companies doing genuine training could be in line for reimbursements of more than 50% now.

The Skills Development Act, which defined a new Sector Training and Education Authority (Setas) system, came into force in 1998 with a plan to develop a series of sector skills within a clearly defined framework of the National Skills Development Strategy.

SA's unemployment rate remains in the doldrums despite the management of the Setas moving from labour to higher education in 2009.