Sector Skills Plan

Transcription

1 Sector Plan Services SETA Sector Plan 2014/2015 1

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3 Official sign-off It is hereby certified that this Sector Plan: was developed by the management of the Services SETA in consultation with the Department of Higher Education and Training was informed by extensive literature reviews, data analysis and stakeholder engagement and research accurately reflects the findings in terms of scarce and critical skills within documented limitations to inform strategy planning and performance priorities Liesel Kӧstlich Signature: Senior Manager:, Strategy and M&E Date: Johannes Mouton Signature: Chief Executive Officer Date: Themba Mhambi Signature: Chairperson Date: For more information, please contact: Services SETA PO Box 3344 Houghton 2041 South Africa Tel: Fax: ISBN: Services SETA Sector Plan 2014/2015

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5 Forward This Sector Plan profiles the Services sector, analyses the current realities, identifies scarce and critical skills and discusses implications for planning. Steady growth within the tertiary economy and Services sector and, regulatory and technological change has resulted in structural shifts within the Services sector labour market and increased employer demands for qualified and skilled people. At the same time unemployment, particularly amongst the youth, remains high. The Services SETA industry classification differs from international and national practice creating a reliance on primary data collection to identify scarce and critical skills and quantify demand. Data on Services sector employers requires more in-depth analysis and verification. Improvements in research methodology aimed at strengthening confidence and representivity of findings remains a challenge. A significant number of current occupational qualifications and learning interventions are being underutilised. Furthermore, addressing identified scarce and critical skills requires that these are readily available and employable. Impact on scarce and critical skills will only be realised when learners successfully complete relevant qualifications and are absorbed into the labour market or gain relevant experience and are retained. Developing new qualifications and strengthening provider capacity is costly and time consuming. These investments need to be informed by credible research. Some progress has been achieved in strengthening organisational research capacity and applying academic research practices. Redefining scarce and critical, and aligning qualifications, occupations and skills will improve research questions and design. Ensuring responsive and expedited planning and implementation will become increasingly necessary. Performance evaluations are designed to measure impact overtime. Such research seeks to verify barriers to completion across learning interventions and identify solutions for improvement. Other implications for planning and implementation include aligning and sequencing all elements in the skills development cycle including qualifications development, provider capacitation, career guidance counselling, partnerships, investment and contracting, and learner enrolment and successful completion. Transformational imperatives remain a priority in targeting beneficiaries. JOHANNES MOUTON CHIEF EXECUTIVE OFFICER Services SETA Sector Plan 2014/2015

6 Contents List of Tables... iii List of Figures... iv ACRONYMS... v SYNOPSIS... 1 SECTION 1: RESEARCH METHODOLOGY Background design Qualitative Study: Focus groups Quantitative Study: Surveys Peer review Validation exercise Secondary data analysis Secondary Data Analysis... 8 Section 2: SECTOR PROFILE Purpose Definition of the Services Sector Economics of the Services Sector and its importance to the national economy Workplace Plan (WSP) Findings Geography Employee Workforce Profile Sub sector trends Section 3: PESTEL ANALYSIS Purpose Political Analysis Economic Analysis Economic Performance and Outlook Employment Trends The Services SETA Sector Labour Market The informal services sector Industrial and Special Economic Zones Social Analysis Technology Analysis Services SETA Sector Plan 2014/2015 i

7 3.6 Environmental Analysis Legislative Analysis General challenges in the Services Sector Findings Section 4: SCARCE AND CRITICAL SKILLS IDENTIFICATION Purpose Definitions of scarce and critical skills Factors influencing demand Scarce Demand Trends Analysis for Scarce Critical skills Limitations in relation to this section Section 5: IMPLICATIONS FOR PLANNING Sectoral Development Supply HET enrolments and graduates Services SETA Supply Section 6: RECOMMENDATIONS FOR IMPROVEMENT Changes and Improvements in Methodology Peer Review Challenges Recommendations References Services SETA Sector Plan 2014/2015 ii

8 List of Tables Table 1: Stats SA and International SIC codes aligned to SETAs Table 2: Sub Sector by size, levy paying and non-levy paying Table 3: Scope of Coverage (Sub sector) Table 4: Number of employers per sub sector Table 5: Sub-sector descriptions Table 6: Linkages with other sectors Table 7: Employers by province and sub sector Table 9: Annual percentage change in employment by industry Table 10: Employment by occupation Table 12: SIPs Categories Table 13: Factors influencing labour supply and demand per sub-sector Table 14: Scarce skills list Table 15: Occupations removed after validation exercise Table 16: Critical list Table 17: Cross-cutting critical skills Table 18: Services SETA interventions by NQF levels Table 19: 2013/2014 learner targets Table 20: changes for SSP Table 21: Agenda Services SETA Sector Plan 2014/2015 iii

9 List of Figures Figure 1: Basic 'Triangulation' Model... 4 Figure 2: Finance, Real Estate and Business Services Sector GDP Figure 4: Sector contribution to GDP growth rate Figure 5: Growth in SD Levy income over 6 years Figure 6: LPE vs. NLPE Figure 10: Employment statistics based on WSPs Figure 11: Gross Domestic product per region Figure 12: Employers by province and sub sector Figure 13: Employee race Figure 14: Employee gender split Figure 17: Gross Domestic Product by Sectors Figure 18: Employment in the Business Services Figure 19: Companies by business size Figure 20: Real Estate Services employment levels Figure 21: Real Estate Services earning levels Figure 22: Industries in demand Figure 23: Industries in high supply Figure 24: Services qualification enrolment Figure 25: Services qualification graduates Figure 26: Development Cycle Figure 27: Alignment to organisational plans and imperatives Services SETA Sector Plan 2014/2015 iv

10 ACRONYMS AET Adult Education and Training AgriSETA Agricultural Sector Education Training Authority AIDS Acquired immune deficiency syndrome APP Annual Performance Plan ATR Annual Training Report BANKSETA Banking and microfinance sector Education and Training Authority BBBEE Broad based black economic empowerment BEE Black Economic Empowerment BPO Business Process Outsourcing CATHSSETA Culture, Art, Tourism, Hospitality and Sport Education and Training Authority CCA Customs Controlled Areas CCMA Commission for Conciliation, Mediation and Arbitration CEE Commission for Employment Equity CEO Chief Executive Officer CETA Construction Education and Training Authority CHIETA Chemical Industries Education and Training Authority DEA Department of Environmental Affairs DHET Department of Higher Education and Training DTI Department of Trade and Industry EEA Employment Equity Act ETDP SETA Education Training and Development Practices Sector Education and Training EWSETA Energy Water Sector Education and Training Authority FASSET Finance and Accounting Services Sector Education and Training Authority FET Further Education and Training FAIS Financial Advisory and Intermediary Services FICA Financial Intelligence Centre Act FoodBev SETA Food and Beverages Manufacturing Sector Education and Training Authority FSB Financial Services Board GATS General Agreement on Trade and Services GDP Gross Domestic Product HEMIS Higher Education Information Management System HIV Human Immunodeficiency Virus HDI Historically Disadvantaged Individuals HR Human Resource HRDS Human Resource Development Strategy HRDSSA Human Resource Development Strategy of South Africa HSRC Human Sciences Council HWSETA Health and Welfare Sector Educational Training Authority ICT Information Communication Technology IPAP II Industrial Policy Action Plan II IPO Initial Public Offering IDZ Industrial Economic Zone INSETA Insurance Sector education and Training authority IT Information Technology LGSETA Local Government Sector Education & Training Authority LPE Levy Paying Employer Services SETA Sector Plan 2014/2015 v

11 MERSETA Manufacturing, Engineering and Related Services Sector Education and Training Authority MICT SETA Media, Information and Communication Technologies Sector Education and Training Authority MOU Memorandum of Understanding MQA Mining Qualifications Authority NGP New Growth Path NIPF National Industrial Policy Framework NLPE Non-Levy Paying Employer NQF National Qualifications Framework NSA National Authority NSDS National skills Development Strategy NCV National Certificate Vocational OFO Organising Framework for Occupations PESTEL Political, Environmental, Social, Technological, Economical and Legislation QCTO Quality Council for Trade and Occupations RPL Recognition of Prior Learning SANAC South African National AIDS Council SASSETA Safety and Security Sector Education and Training Authority SAQA South African Qualifications Authority SARS South African Revenue Services SDL Development Levy SDLA Development Levies Act SEDA Small Enterprise Development Agency SETA Sector Education and Training Authority SEZ Special Economic Zones SKA Square Kilometre Array SIC code Standard Industrial Classification code SIPs Strategic Integrated Projects SME Small micro enterprises SMME Small, Medium and Micro Enterprises SQAM Standards, Quality Assurance and Metrology SSP Sector Plan Stats SA Statistics South Africa TETA Transport Education and Training Authority WSP Workplace Plan WTO World Trade Organisation Services SETA Sector Plan 2014/2015 vi

12 SYNOPSIS The Services SETA derives its legislative mandate from the Development Act, 1998 (Act 97 of 1998). In accordance with Section 10 (a) of the Act, each SETA must develop a Sector Plan (SSP) within the framework of the National Development Strategy (NSDS). The Services SETA has prepared the SSP 2014/2015 update in accordance with the requirements of the Department of Higher Education and Training (DHET) and the policy context for skills planning which includes the NSDS III, the Human Resource Development Strategy , the National Accord, the Youth Employment Accord, the Strategic Integrated Projects, the Green paper for Post-School Education and Training, the Quality Council for Trades and Occupation (QCTO) policies and various regulations such as the SETA Grant Regulations (released 3 December 2012, Gazette 25940). This Sector Plan (SSP) 2014/15 aims to give an overview of the economy and employers specific to the Services Sector. This enables the Services SETA to gain insight into the present environment and plan for the future. This is done by researching the scarce and critical skills needed in the Services Sector, outlining the current qualifications needed and those that need to be developed to ensure that gaps are identified and needs met to enable economic growth and expansion of the sector. The SSP is presented in six sections outlining definitions, research, findings, and implementation and planning. It aims to guide the reader through the process of defining scarce and critical skills and how plans will be implemented to meet sector demands. Section one provides an overview of the research methodologies used to update the SSP. Information has been drawn from a number of sources which includes primary research, WSPs, the Services SETA employer s database, Stats SA, the South African Reserve Bank and Career Junction. The research design employed was based on mixed method studies to collect information. A validation exercise with associations and peer review with the services cluster at DHET was also conducted. The mixed method study allowed the Services SETA to triangulate findings, validate research evidence and to update and improve on the sub sector sections. The second section provides a definition of the Services Sector in terms of its scope and size and the economy in which it operates as well as the contribution to GDP of various sub-sectors. A description of the sub-sectors is provided and the linkages these services have with other sectors. The Services SETA employer database and Workplace Plans were analysed for this section. Key findings are 27.9% of employers are levy paying and 72.1% is non-levy paying with 89% falling in the small business category. Largest sub sectors are Business Services, Real Estate Services and Hair Care. This section concludes with an overview of all 16 sub-sectors, identifying trends and providing a brief impression of the environment. Section three examines the external factors and change drivers affecting the Services SETA sub-sectors by using a Political, Environmental, Social, Technological, Environmental and Legislative (PESTEL) Analysis. Policy drivers for the Services sector are discussed in terms of provision and impact for planning. Fundamental changes impacting the sector are: The National Development Strategy (NSDS) III which promotes partnerships between employers, public education institutions (FET colleges, universities, universities of technology), private training providers and SETAs. NSDS III ensures increased access to training and skills development opportunities and measured against, key developmental and transformation imperatives of race, class, gender, geographic considerations, age, disability and the HIV and AIDS pandemic. It attempts to address the challenges of skills shortages and mismatches in the country and improve productivity in the economy. Services SETA Sector Plan 2014/2015 1

13 The SETA Grant Regulations Regarding Monies Received by a SETA and Related Matters which was published on 3 December The main purpose of the regulation is to improve the focus, management and effectiveness of grant spending. The most significant change is the reduction in the mandatory grant percentage from 50% to 20%, and the requirement to plan PIVOTAL training and report on implementation. One of the unintended consequences impact on skills development is a reduction in training and/or WSP submissions due to lack of incentives for employers to support skills development in their companies. Broad-based black economic empowerment (BEE) has had a significant impact on the way business is done in South Africa. The amendments aimed to address issues like fronting, tick box compliance and exorbitant amounts of money that small enterprises have to pay for consultants to prove they were BEE compliant. The amendment to the BEE Codes of Good Practice was published on 11 October The increase of the threshold for qualification as an Exempt Micro-Enterprises is beneficial for the SME s within the sector. The amendments will have a significant impact on businesses as the amended Codes have moved away from being broad-based to narrow-based ownership-centric black economic empowerment. A few policies that have affected and are influencing business in the services sub sectors are: The Consumer Protection Act which has an influence on all businesses as businesses will have to take greater care when interacting with customers to ensure that transactions are fair, reasonable and honest. This mainly affects sub sectors in sales and marketing. The National Environmental Management Act (NEMA) has influenced the cleaning industry. Within South Africa, there is a trend of increasingly available green products and an increase in the amount of companies offering green services. In the cleaning services, environmental conservation laws have cleaning companies to use eco-friendly chemicals which are costly. Recycling of waste has also been legislated for as standards have been set by the Department of Water and Environmental Affairs for the collection and handling of waste. The Financial Advisory and Intermediary Services ACT, 37 of 2002 impacts on the postal services. The Acts were designed to protect consumers of financial products and services, regulate the selling and advice-giving activities and ensure consumers are provided with adequate information about the financial product they use and about the people and institutions who sell these financial products. A major challenge for the Labour Recruitment services has been the amendments to the Employment Service Bill. Staffing providers for the Contact centre industry are also affected by amendment to the labour legislation. The effect of the bill will be added administrative burden on employers for compliance of business making smaller businesses difficult to sustain. Stricter lending criteria s as a consequence of the National Credit Act has impacted on the Real Estate Services in that mortgage loans are classified as credit agreements. The National Credit Act is aimed at regulating the consumer credit market by improving access to credit for those previously excluded, protecting consumers from becoming over-indebted and preventing dubious lending practices. The following general observations can be made from the PESTEL Analysis: Personal services such as hair care and beauty treatments are highly unregulated from a health and safety perspective, both in terms of products used in the market as well as general application of treatments. As such more effort can be channelled towards standardising best practice in these industries. Services SETA Sector Plan 2014/2015 2

14 Formalisation is a major issue affecting the cleaning, funeral, hair dressing and beauty treatment sub-sectors. This has impact on the scope of occupations, work standards and ethics within these sub-sectors. Health and safety issues related to customer wellbeing as well as the environmental impact of business operations, is a dominating theme across most of the Services SETA sub-sectors. SME s as job creators will require technical assistance from the services sector to enable their growth and sustainability. Real estate, labour, recruitment and contact centres have strong enforcement and regulatory regimes. Scarce and critical skills are identified in section four through various research methods and data analysis as described in section one. The outcomes of research are tabulated by sub-sector and outline the skill needs, occupation, intervention and NQF level. Occupations are illustrated as a low, medium and high priority. The demand for skills have been influenced by technology, changes in the world of work and environmental issues. Notably the demand for project manager is on the increase. Business across the sector has acknowledged research as a tool to gain competitive edge and social media training is in demand to market businesses. The top five scarce skills identified are Cleaning Supervisor, Mortuary Attendant, Cleaning Machine Technicians, Earthmoving plant operator and Afro-Hairdresser. The top critical skills have been identified as Databases Analytics, Computer Literacy including internet skills, plant hire operations, professional conduct and Business skills which including planning and business writing. Scarce skills can be addressed through bursaries, learnerships, apprenticeships or internships. The key change that the Department of Higher Education and Training and the SETA s are trying to achieve is a stronger role for the workplace, and workplace experiential learning, in programmes addressing scarce skills occupations. The supply and demand for skills in each sub-sector should be considered in order to tailor Services SETA interventions to impact these sub-sectors. It follows then that section five considers implications for planning in terms of the qualifications and skills within the skills development cycle. Roleplayers will agree on the priorities for programmes aligned to both full qualifications (in respect of scarce skills) and clusters of unit standards or modules (in respect of critical skills). The seven priority programmes identified are persons with disability, small enterprises, cooperatives and non-profit organisations, FET and HET institutions, rural development, strategic integrated projects and youth and NEET. Data sources for this section were from the HEMIS, Services SETA service level agreement and qualification development. The section looks at training and development of the current workforce, through the development and implementation of qualifications by the Services SETA, and support to Further and Higher Education and Training Institutions, mainly through a focus on the development of partnerships to address priorities identified in the SSP. The Services SETA has recognised two types of partnerships for implementation and planning. The first type of partnership under programme four of the Services SETA Annual Performance Plan (APP), is to facilitate the allocation and contracting of discretionary grants for the enrollment of funded learners to increase the flow of new entrants into the labour market. Roleplayers are public and private training providers, community-based organisations, cooperatives and NGOs. The second type of partnership under programme five of the Services SETA APP is to facilitate relationship responsiveness with key roleplayers for the purposes of mutual information sharing with stakeholders who include government, business organisations, trade unions, constituency bodies, public bodies, employers, trade and professional bodies. Relevant contractual partnerships resulting in commitments representing beneficiaries constituencies will be pursued where appropriate. This section ends with links to the Strategic Plan and Annual Performance Plan. In conclusion the SSP reflects on recommendations for improvement in the research methodology in section six. A research agenda is included giving insight into future projects and the way forward in improving and enhancing the Sector Plan. Peer reviews with the services cluster proved to be useful in terms of information sharing and best practices. This section also explores recommendations for quality information to inform Services SETA s strategies in future years. Services SETA Sector Plan 2014/2015 3

15 SECTION 1: RESEARCH METHODOLOGY 1.1 Background In accordance with the legislative mandate from the Development Act, 1998 (Act 97 of 1998), each SETA must develop a Sector Plan (SSP) within the framework of the National Development Strategy. NSDS III places emphasis on establishing a credible institutional mechanism for skills planning. Seta s close contact with industry places them in a good position to document and communicate recent and emerging trends in the economic sectors. SSPs provide an overview of the sector in terms of its profile, trends in employment and other factors affecting the sector, to enable the SETA to plan for training interventions. Another important purpose of a SSP is to identify scarce and critical skill demands. For this, sound research methodologies are to cover the scope of the Services SETA 16 sub sectors. 1.2 design The research design employed was based on mixed method studies in order to triangulate findings. The purpose of triangulation is to increase the credibility and validity of the results. The idea is that the Services SETA can be more confident with results if different methods lead to the same result. This method is a powerful technique that facilitates validation of data through cross verification from two or more sources. As it refers to the application and combination of several research methodologies in the study of the same phenomenon, the Services SETA used both quantitative (validation) and qualitative (inquiry) studies with similar questions in each of the research instruments. Figure 1 illustrates the basic triangulation research method. Figure 1: Basic 'Triangulation' Model The SSP is based on the following research methods: This mixed method study was used to update and improve on the sector dynamics, PESTEL influences and scarce and critical skills list to enable the Services SETA to better respond to the demands of employers. The two modes of research used are quantitative and qualitative research methods. Both methods helped answer Services SETA Sector Plan 2014/2015 4

16 questions and confirm knowledge, to address SSP issues. Other methods employed were a review of existing data and information sources which including Stats SA, the Services SETA employer data base, the South African Reserve Bank Annual Economic report and workplace skills plans and annual training reports. Consultation meetings were also held with Services SETA Managers and the Accounting Authority Risk and Strategy subcommittee and a peer review process with the Services cluster as grouped by DHET. The next sections describe the research methodology, sampling, data collection and data analysis for the methods used. 1.3 Qualitative Study: Focus groups Purpose The purpose of the focus groups was to obtain rich sets of input for the SSP to gain insight into employer s businesses. The research questions were scarce and critical skills, PESTEL factors affecting their business, past trends, future trends and priority areas for the sub sector. Method Regional visits were designed to include one urban area and one rural area in each province in order to get a national view of needs. Focus group discussions were used to gather data using a semi-structured discussion guide with open-ended questions to solicit more information from participants. Participants were clustered into types of Services SETA chambers. Sampling A purposive sampling strategy was used to represent all sub sectors in the SETA, cooperatives, NGOs and FET and HET colleges throughout the country. The total number of delegates that attended is with 17 sessions. Below is a list of the 17 sessions and 47 focus groups the region. FOCUS GROUPS Urban regions Participants Focus groups Free State - Bloemfontein 96 4 Western Cape - Cape Town KZN Durban Eastern Cape - East London Gauteng Midrand Limpopo Polokwane Mpumalanga Nelspruit Eastern Cape - Port Elizabeth Northern Cape - Kimberly 84 1 Gauteng Parktown 76 3 Rural regions Free State - Welkom 46 3 Western Cape - George 42 3 KZN - Port Shepstone KZN - Ladysmith Limpopo - Tzaneen 79 1 Mpumalanga - Secunda 48 1 Northern Cape - Upington 89 Total Data collection Focus groups were held from February to April Each focus group was allocated a scriber and a facilitator and notes were forwarded for analysis. Each focus group had a facilitator to direct conversation. Data analysis Services SETA Sector Plan 2014/2015 5

17 The data was prepared for analysis by checking the raw data for any errors and omissions that may compromise quality standards and data integrity. The data was analysed systematically using the identified themes by sub sectors. 1.4 Quantitative Study: Surveys Purpose The main purpose was to obtain the magnitude of the needs of scarce and critical skills for the sub sector in order to compile projections for the scarce and critical skill list. Method During the regional visits, a one page questionnaire was distributed to the audience in order to supplement information from the focus groups and to gain data from all participants for projections of scarce and critical skills. Sampling A convenience sampling technique was selected due to the availability of respondents attending the focus groups. Data collection Hand out (self-completion) surveys was administered at the 47 focus group sessions. The advantage of this method is that it capitalised on having respondents available and Services SETA staff was able to personally convey the purpose and importance of the survey to respondents and were able to answer questions from participants. The survey was structured with one open-ended question. In total 649 surveys were collected. Participants were as follows: Sub sectors Participants Beauty treatment 14 Business services 185 Cleaning 79 co-op 15 Collective services 4 Contact centre 1 event management 2 Fashion 2 FET 5 Funeral services 28 Government department 4 Hair Care 14 HET 3 Hiring Services 30 Household services 1 Labour Recruitment Services 51 Marketing and Communications 20 NGO, CBO 42 Other 38 Postal Services 2 Project Management 10 Real Estate services 38 Training providers 61 Total 649 Services SETA Sector Plan 2014/2015 6

18 Data analysis The data was prepared for analysis by checking the raw data for any errors and omissions that may compromise quality standards and data integrity. In some instances sub sectors were not specified in the questionnaires. Data analysis entailed organising specific facts about the sub sectors, categorising the data to help cluster them into meaningful groups and interpretation of the data were scrutinised for underlying themes and other patterns informed the 2014/2015 SSP. Data was captured on the Questback research system for analysis and raw data was extracted to Microsoft excels for open ended questions. Data from closed ended questions were extracted from Questback in power point format. 1.5 Peer review SETAs were clustered into economic sectors for a peer review process for the evaluation of SSPs in The objective was reciprocal learning in the areas of data collection, context of planning and SSPs translation into SETA strategic plans. W & R SETA was the lead SETA for the services cluster which included the SSETA, Transport SETA and Culture, Art, Tourism, Hospitality and Sport SETA. The Services Cluster peer review meeting convened in September 2013, followed by the Services Cluster Peer review Report which was submitted to the DHET on 2 October The cluster identified best practices and challenges with recommendations for expanding their work. 1.6 Validation exercise A validation exercise was conducted with Services SETA Associations to validate the research findings on scarce skills. The research methods employed was customised online questionnaires for each sub sector with closed ended questions based on the criteria for validation. These online questionnaires were available for self-completion from 9 17 October This exercise was based on the recommendations of the Services Cluster peer review. The methodology was based on the best practice from W & R SETA and TETA where all occupations considered for the Scarce List were evaluated by stakeholders according to six criteria. The criterion used is: Entry to the occupation requires a long lead time of formal education and training 3 years. which people acquire are being deployed for the uses intended. Shortage of skills causes a significant cost to the company. Hard to fill vacancies - more than 3 months to find suitable candidate There is research and documented evidence to identify an occupation as a scarce skill The nature of the job is critical to the core business function For an occupation to be eligible for inclusion on the Scarce List, at least 3 out of the 6 criteria should be met. This selection process was undertaken by sub sector associations who possess the knowledge and understanding of skills development and who rated occupations based on the criteria above. Participating associations were from the following sub sectors: Sub sectors Participants Labour Recruitment 20 Beauty Treatment 1 Business services 1 Cleaning 3 Collective services 1 Contact Centre 7 Events Management 3 Funeral Services 1 Services SETA Sector Plan 2014/2015 7

19 Hair Care 2 Hiring Services 4 Interior Designing 1 Marketing and communication 32 Postal services 0 Project Management 0 Real Estate 4 Total 80 Results were analysed systematically through the online research tool Questback. Furthermore, the scarce and critical skills lists in section four were developed to reflect the magnitude of the needs of the SSETA s employers. Projections were based on the unallocated employers in all subsectors. The calculations were done as follows: Instrument = (Unallocated members)/ (Sub Sector Grand Total) 100 (Size of company per sub sector) Projected Magnitude = Instrument magnitude for 2014/15 (Scares/Critical) 1.7 Secondary data analysis Two sources of data were used to collect information for the purpose of discussing Services SETA employers profile. WSPs inform SETAs of the employers' skills development needs and enable the SETA to render support. Information is used primarily for demographic and geographic profile. The other source used to derive the information in Table 2 (page 5) was informed by the Services SETA levy paying and non-levy paying employers database. This database is compiled by the South African Revenue Service (SARS) based on levies collected monthly against skills development levy (SDL) numbers. The July 2013 upload was used for the SSP update and was analysed in Microsoft Excel. Closed companies were excluded from the analysis. Unclassified companies related to those employers whose levy paying status had not been verified and unallocated refers to companies who had not been allocated a sub-sector. 1.8 Secondary Data Analysis Data was supplement by Stats SA Quarterly household survey and Quarterly Labour force survey, the South African Reserve Bank Annual Economic Report and the CareerJunction index report. Stats SA Quarterly household survey This report presents the results of the General Household Survey (GHS) conducted annually by Statistics South Africa from The survey collects information on a variety of subjects including education, health, the labour market, dwellings, access to services and facilities, transport, and quality of life. The survey was introduced to address a need identified by the Government of South Africa to determine the level of development in the country and to measure, on a regular basis, the performance of programmes and projects that were implemented to address these needs. Quarterly Labour force survey Services SETA Sector Plan 2014/2015 8

20 Stats SA Quarterly Labour Force Survey is specifically designed to measure the dynamics of the South African labour market, producing indicators such as employment, unemployment and inactivity. It measures a variety of issues related to the labour market, including the official unemployment rate. The sample size for the Quarterly Labour Force Survey is roughly dwellings per quarter. The sample is designed to be representative at provincial level and within provinces at metro/non-metro level. Within the metros, the sample is further distributed by geography type. South African Reserve Bank Economic Report The Annual Economic Report provides the broader economic context of primary, secondary and tertiary sectors and the focus was in the review of economic events is on the calendar year 2012 and the first half of Attention is also given to institutional, legislative and regulatory changes introduced during the period under review that have a bearing on the economy and its functioning. Career Junction Index Although online recruitment information should not be used exclusively to determine where jobs exist and in what quantities, it does give some idea of job demand. But when compared to Stats SA quarterly employment statistics report which is based on a survey of 20,208 tax-paying private and public enterprises, Career Junction uses a sample of 2.4 million which includes their portfolio of registered job seekers and the thousands of jobs published on Career Junction every month. The Career Junction Index reported major demands for employment for the services sector in Recruitment. Document Review Various legislative documents were used to inform the SSP. This is covered in section three of the SSP. Services SETA Sector Plan 2014/2015 9

21 Section 2: SECTOR PROFILE 2.1 Purpose It is important to define and understand the labour market in which the Services SETA operates and the scope and nature of its economic activities therein. The Sector Profile facilitates the analysis of data covering a wide spectrum of standard industry classification (SIC) codes. It includes the definition of the Services Sector, the scope of coverage into manageable sub-sectors, the size and shape of the sector, linkages with other sectors, economics of the Services Sector and its importance to the national economy, Workplace Plan data, as well as employer and sector profiles and trends in the sector Definition of the Services Sector The Services Sector, in the South African skills development context, refers to a cluster of 70 SIC codes which have been determined by the Minister of Higher Education and Training, and fall within the scope of the Services SETA. This should not be differentiated with the tertiary sector of the economy, as outlined in section The ministerial determination of the Sector SIC codes has delineated a sector unique to South Africa s skills development landscape. There are various approaches to categorising industries and occupations used internationally in order to describe the Services Sector. The definitions from the General Agreement on Trade and Services (GATS) and the World Trade Organisation (WTO) refer more, in the South African context, to the tertiary sector of the economy concerned with the provision of services. South Africa has adopted these conventions for use primarily by Stats SA who are the legislated custodians of market, population, economic and government data in the country. The Services SETA SIC codes can be found across three Stats SA major divisions and six International SIC code sections as seen in table 1. Table 1: Stats SA and International SIC codes aligned to SETAs Stats SA SETA International SIC SETA Major Division 1: Agriculture, Hunting, Forestry and Fishing Major Division 2: Mining and Quarrying Major Division 3: Manufacturing Major Division 4: Electricity, Gas and Water Supply AgriSETA, CATHSSETA A - Agriculture, forestry and fishing MQA B - Mining and quarrying MQA CHIETA, FOODBEV SETA, MERSETA, AgriSETA EW SETA C - Manufacturing D - Electricity, gas, steam and air conditioning supply E - Water supply; sewerage, waste management and remediation activities AgriSETA, CATHSSETA CHIETA, FOODBEV SETA, MERSETA, AgriSETA EW SETA EW SETA Major Division 5: Construction CETA F - Construction CETA Major Division 6: Wholesale and Retail trade, repair of motor vehicles, motor cycles and Personal and Household Goods, Hotel and Restaurants W & R SETA, CATHSSETA G - Wholesale and retail trade; repair of motor vehicles and motorcycles I - Accommodation and food service activities W & R SETA, CATHSSETA FOODBEV, CATHSSETA Services SETA Sector Plan 2014/

22 Major Division 7: Transport, Storage and Communication Major Division 8: Financial Intermediation, Insurance, Real Estate and Business Services SSETA, TETA, MICT SETA BankSETA, FASSET, SSETA, INSETA H - Transportation and storage J - Information and communication K - Financial and insurance activities L - Real estate activities M - Professional, scientific and technical activities TETA, SSETA MICT SETA BankSETA, FASSET, INSETA SSETA SSETA, FASSET Major Division 9: Community, Social and Personal Services SSETA, ETDP SETA, HWSETA, LG SETA, SASSETA O - Public administration and defence; compulsory social security P - Education Q - Human health and social work activities R - Arts, entertainment and recreation SASSETA ETDP SETA HWSETA CATHSSETA Major Division 0: Private Households, Exterritorial organisations, Representatives of Foreign Governments and other Activities not Adequately defined SSETA, SASSETA T - Activities of households as employers; undifferentiated goodsand services-producing activities of households for own use N - Administrative and support service activities SSETA SSETA S - Other service activities SSETA The classification reflected in Table 2 is unique to the South African Services SETA environment and as such does not generate much comparative data nationally and internationally. Readily available research and market data is not organised according to this clustering. For this reason it is not possible to define the Sector without giving context and conducting primary research. In order to facilitate the analysis of data covering 70 SIC codes and to provide optimal support to companies and organisations, the Services SETA established six Chambers which cover 16 sub-sectors. It is the intention of the Services SETA to organise its services and consultations within the Chambers, and to plan sector and skills development interventions relevant to these sub-sectors. Services SETA Sector Plan 2014/

23 Table 2: Sub Sector by size, levy paying and non-levy paying Subsector Total Levy paying employers Non Levy paying employers Employers LP Sub sector Large Medium Small Unclassified NLP sub sector Large Medium Small Unclassified Total Total No. % No. % No. % No. % No. % No. % No. % No. % No. % No. % Beauty % 1 0.5% 8 3.7% % % 1 0.1% 2 0.2% % % treatments % Business % % % % % % % % % % services 193 Call centres % % 1 4.2% % 1 4.2% % 0.0% 0.0% % % Cleaning % % % % % % % % % % Collective % 5 1.7% % % % 1 0.4% 6 2.1% % % services % Domestic % 4 100% 0.0% % 0.0% 0.0% % services % Fashion % % % 0.0% % % 0.0% % Funeral % 3 2.3% % % % % 3 0.8% 3 0.8% % % services Hair care % % % % % % % % % % Hiring Services % % % % % % % % % % Household % 3 7.0% % 2 4.7% % 1 1.5% 4 6.0% % 4 6.0% Services Labour % % % % % % % % % % Recruitment Marketing % % % % % % 8 0.4% % % % Postal services % 1 1.7% 5 8.3% % 5 8.3% % 1 0.5% 3 1.4% % % Project % 1 1.5% 2 3.0% % 3 4.5% % 0.0% 1 2.9% % % Management Real estate % % % % % % % % % services % Unallocated % % 3 50.% % 1 0.4% 2 0.8% % % Grand Total % % % % % Source: Services SETA employer database % % % % % Services SETA Sector Plan 2014/

24 Table 2 provides a breakdown of levy paying (27.9%) and non-levy paying (72.1%) employers by sub sector and size of business (small, medium and large). Levies are guided by the Development Levies Act (SDLA). The SDLA requires all employers to pay a skill development levy (SDL) each month towards the National fund. The SDLA applies to all employers except those in the public service; religious or charitable organisations; public entities funded by more than 80% by government; and employers whose total pay to workers is less than R annually and those that do not have to register according to the Income Tax Act. The levy income of the Services SETA is a portion of the 1% of payroll paid by registered employers to SARS. This defines levy paying employers (LPE). Employers exempt from paying the SDL and that fall within the scope of Services sector can register with Services SETA as a non-levy paying employers (NLPE) in order to qualify to participate in specific Services SETA benefits. According to Services SETA database uploaded from DHET and SARS in July 2013, the service sector consists of employers distributed across the 16 sub-sectors. The dynamics of each subsector are different. Some sub-sectors may have fewer employers but represent high employment rates and high turnover. Other employers may be influenced by barriers to entry which include; level of skill for business establishment, core business, regulatory environment, capital outlay, access to markets, and technology. The largest sub sectors in the Services SETA are Business Services, Real Estate and Related Services and Hair Care. The sector comprises of 89% small companies. The sub-sectors are determined by clusters of SIC codes and represent Services SETA employers offering services that are interrelated or have a common business activity. The clustering of subsectors enables the Services SETA to plan and organise skills development interventions for its employers. Table three provides a breakdown of the scope of coverage of the services sector. Table 3: Scope of Coverage (Sub sector) Services SETA sector chambers and sub-sectors Chamber 1: cleaning and hiring services Sub-sector title SIC Gazetted industry descriptor code Hiring Services Office machinery, equipment and rental leasing Renting of construction or demolition equipment with operators Renting of machinery and equipment, without operator and of personal and household Renting of other machinery and equipment Renting of personal and household goods n.e.c Function and catering equipment hire Miscellaneous item hire Truck hire Video hire Truck and plant hire Household Services Dry cleaning and laundering Garden maintenance services Domestic services Domestic services Cleaning Services General cleaning Cleaning of carpet and upholstery Pet care Cleaning equipment and consumable supply Services SETA Sector Plan 2014/

25 Chamber 2: Communications and management services Marketing and communication 9001 Marketing services 9002 Marketing communications (Inc. Public relations) 9008 Direct Marketing Market research and public opinion polling Brand marketers Contact centres Contact centre management of people Postal services National postal activities Banking via post office Mail handling Chamber 3: Labour and collective services Labour recruitment Services Permanent employment agencies Labour recruitment and provision of staff Private employment agencies and temporary employment services Personnel services agencies Temporary employment services Collective services Activities of professional organisations Professional bodies Chamber 4: Management and business services Bargaining councils and dispute resolution Associations, federations and umbrella bodies Business services Import and export of various metals Other business activities General consulting services Business activities n.e.c Other recreational activities Other service activities Quality management and related services Ngo management and services Non-financial business management and management consulting Other service activities n.e.c Project management Generic project management Event and conference management excluding the operation of convention centres Chamber 5: Personal care services Hair care Ladies hair dressing Men s and ladies hairdressing Beauty treatment Beauty treatment Nail technology including nail technologist, nail technicians and distributors and agencies of nail products Non-allied registered perfumery including aromatic oils and related products, perfumery consultants, sales people and agencies of nail products Health and skin care incl. health and skin care therapists, stress therapists and cosmetologists, slimming salons and distributors of slimming products Services SETA Sector Plan 2014/

26 including slimming machines Make-up artistry Distributors of slimming products including slimming machines Distributors of makeup products and related merchandise Funeral services Cutting, shaping and finishing of stone Funeral and related activities Coffin making by funeral enterprises Fashion Modelling agencies Chamber 6: Real estate and related services Fashion design not related to clothing Real estate services Decorators/interior designers and decorators Real estate activities Real estate activities with own or leased properties Real estate duties on a fee or contract basis Real estate valuation services Property management services Estate agencies Valuers, including auctioneers Table 4 depicts the number of employers per sub-sector over a three year period. Business services are the largest sub-sector with (81%) employers. These are typically professional services organisations that are characterised by very low barriers to entry. Three sub-sectors, namely Contact Centres, Domestic Services and Fashion, have less than 100 employers each. Table 4: Number of employers per sub sector Number of Number of Number of Sub-sector Employers Employers Employers (2011) (2012) (2013) Marketing and communication Contact centres Hiring Services Household Services Domestic services Cleaning Postal services Labour recruitment Services Collective services Business services Project management Hair care Beauty treatment Funeral services Services SETA Sector Plan 2014/

27 Fashion Real estate services Unallocated Total Source: Services SETA employer database (2011, 2012, 2013) Table 5 provides typical employers located within the sub-sectors. It endeavours to give a definition of the sub-sector through unpacking its typical membership base. Table 5: Sub-sector descriptions Services SETA employers and their services Hiring Services Household Services Domestic Services Cleaning Marketing Contact centres Postal Services Labour Recruitment Services Collective Services Business Services Project Management Hair Care Truck and construction plant hire; building and construction equipment; earthmoving, excavating and crane hire; hire function, office supplies and equipment; small tool hire; video hire; clothing, garment, costumes and other equipment hire. Garden maintenance - maintain the general health or condition, and the presentation of a garden; lawn mowing, lawn repair and renovation; pruning, spraying pesticides, fertilising or soil care, replacing old or sick plants, maintaining indoor plants, tree surgery Dry cleaning and laundering - family and commercial laundries; garment pressing; and agents and other laundry facilities. The employment of hired workers by private households for the performance house cleaning, child care, cooking, gardening and personal services. The performance of similar tasks for hire in public institutions and business, including hotels and bordering houses The provision of cleaning services to individuals, households, and businesses (contract cleaning): general cleaning services; cleaning of carpets and upholstery; industrial cleaning and pet care. Includes marketing and public relations. Identifying client needs; planning and executing services to meet clients objectives; promote a company s image or products amongst the public, researching, promoting, selling and distributing products or services; branding developing public awareness of a company and its brand; four key roles - products and services; promotion; distribution and pricing. A centralised office used for Business Process Outsourcing. The purpose is for receiving and transmitting large volume of requests by telephone; administering incoming calls for product support or information enquiries from consumers; outgoing calls for telemarketing, clientele, product services, and debt collection. Activities related to the this service are national postal activities; banking via the Post Office; mail handling and courier services; connecting with the world by distributing information, goods, financial and government services. Companies offering employment services; permanent and temporary employment agencies; labour recruitment and provision of staff; labour broking the provision of persons with skills needed by employers for a defined period of time; companies offering outsourced human resources services Bargaining councils; collective bargaining on terms and conditions of employment; the negotiation of collective agreements; conciliation, mediation and arbitration services. Management consultants; business advisors; management and outsourcing of payroll services; administration services; quality management; Black Economic Empowerment (BEE) verification agencies; organisations and independent consultants providing services in a particular area such as quality management, general management, payroll, the environment, technology, human resources, marketing, communication, engineering etc. Methodical approach to planning and guiding project processes from start to finish; five stages: initiation, planning, executing, controlling, and closing. Project managers oversee teams working on individual projects in a variety of fields, including construction, engineering and business. An effective project manager needs a diverse skill set. Hairdressers, hairstylists and cosmetologists offer beauty services, such as shampooing, Services SETA Sector Plan 2014/

28 Beauty Treatment Funeral Services Fashion Real Estate Services cutting, colouring and styling hair. Cosmetologists may be trained to give manicures, pedicures and scalp and facial treatments, provider make-up analysis and clean and style wigs and hairpieces. Beauty treatment, nail technology, product distribution and marketing and sales. Burial and cremation of human or animal corpses. Related services include burial services, the rental of equipped space in funeral parlours, undertaking services, the rental or sale of graves and the upkeep and maintenance of graves. Fashion and modelling requirements are not dictated by the fashion trade but by the clientele. The main modelling categories are editorial, fashion and commercial. Residential, commercial, and industrial property management for buying and selling; interior design; construction businesses requiring real estate services specialists; professional valuation services; auctioneers; developers adding to or replacing buildings; leasing of property; property management: managing a property for its owner(s), which includes facilities management; real estate marketing; real estate investing; any business performing a task regulated in terms of the Estate Agency Affairs Act 112 of 1976 and the Property Valuers Profession Act of Roleplayers in other Sectors The Services SETA is linked to other sectors of the economy such as the Transport Sector, in terms of postal courier and distribution; the Mining and transport Sector for plant and operator hiring; and the Chemical and Manufacturing Sectors for products used in hair care. For this reason the Services SETA must work closely with these and other related sectors for the identification and delivery of industry-specific programmes. Table 6 demonstrates the Services SETA linkages with other sectors of the economy. Table 6: Linkages with other sectors Sub-sector Hiring Services Cleaning Household Services Domestic Services Contact Centres Marketing Communication Postal Services and Linkages to Other Sectors The Mining Sector typically hires plant and other equipment. Due to the seasonality and project nature, the Construction Sector hires plant and machinery from the Hiring services sub-sector to complete their assignments. Tourism and Transport Sectors interface with the sub-sector through hiring of vehicles The Cleaning sub-sector provides its services to the Property Sector and hospitals while cleaning supplies are sourced from the Chemical and Manufacturing Sector Typical customers is the Tourism, Hospitality and Environmental Sector Typical customers is the Tourism and Hospitality Sector Most organisations across all sectors have internal contact centres and those that do not, generally outsource the function to this sub-sector Marketing Services are by all sectors of the economy, typically by organisations that do not have an internal marketing function or those that prefer to augment their internal skills through external expertise The Postal Service relies increasingly on the Transport Sector (courier, distribution) to deliver mail and parcels timeously. The provision of banking services through the Post Office links this sub-sector to the Banking Sector (Financial and commercial services). It is also linked to ICT, Marketing and Communication. Services SETA Sector Plan 2014/

29 Labour Services Recruitment Labour Recruitment is a service that is offered to all sectors of the economy either for permanent, temporary or seasonal employment services. This includes headhunting and specialist recruitment of staff. Collective Services Business Services Project Management Funeral Services Hair Care Beauty Treatment Fashion Real Estate Services Bargaining Councils, Associations, Federations and Umbrella Bodies all represent collective formations across all sectors of the economy Business Services, business consulting, management, payroll, administration and secretarial services are by all organisations across all sectors. Project management is a wide field and is a function by all sectors of the economy to deliver projects of various forms or sizes The Funeral sub-sector value chain typically includes the Manufacturing Sector, Transport Sector and the Insurance Sector This sub-sector relies heavily on the Chemical and Manufacturing Sectors for hair care products. Other sectors are the Health and Welfare, Wholesale and Retail and manufacturing sector This sub-sector relies on the Chemical and Manufacturing Sectors for beauty treatment products. Other sectors are Health and Welfare, Wholesale and Retail, Tourism and the manufacturing sector The Fashion sub-sector interfaces with the Clothing and Textiles Sector, Wholesale and Retail Sector, motion picture industry and Tourism Sector. The Real Estate Services value chain includes the Agriculture, Banking, Construction, Development Finance, Energy, Environment and Waste, Forestry and Paper, Insurance, Public Sector Entity, Retail, Tourism and Leisure, Utilities sectors Economics of the Services Sector and its importance to the national economy Economic sectors refer to the division of a country s population by the area in which they are employed. Economies are broken down into three sectors, although some recognise an extra two namely the quartery and quinary sectors for intellectual activities and high level decision makers respectively. For the purposes of this SSP the three more common sectors will be defined. Primary Sector The primary sector of the economy deals with the retrieval of mineral resources or raw materials and would include agriculture, mining and other natural resources. Secondary Sector The secondary sector involves the transformation of raw materials retrieved from primary sector industries in the making of goods or products and materials. This sector includes manufacturing, engineering and construction Tertiary Sector The tertiary sector is also known as the services sector. Services are supplied to businesses and consumers and can be defined as activities where people offer their knowledge and time to improve productivity, performance, potential, and sustainability. This is the sector in which Services SETA operates and the businesses herein provide the focus for the work done by the Services SETA. Services SETA Sector Plan 2014/

30 The Services sector forms an integral part of the South African economy. South Africa has historically been characterised as a primary sector economy with the highest GDP contribution coming from mining and agricultural activities. This has changed with growth in the provision of tertiary services. The challenge with data is that the Stats SA and the DHET do not use similar classification of services SIC codes. However, the information generated from the Stats SA is useful given its mandate as statutory data source. According to the Gross Domestic Product (GDP) from Stats SA for the 1st Quarter 2013 the main contributors to the increase in economic activity were the mining and quarrying industry and finance, real estate and business services (each contributing 0,7 of a percentage point). In terms of the economic data available for this major division, GDP for the sector increased from around R249 billion in 2002 to over R400 billion in This represents a weighted average annual growth rate of 5.53%. The Business Services Cluster industries accounted for 22.4% of South Africa s GDP, positioning it as an important contributor to the South African economy with its contribution of R415 billion in Figure 2: Finance, Real Estate and Business Services Sector GDP 2013Q2 2013Q1 2012Q4 2012Q3 2012Q2 2012Q Source: Stats SA Gross Domestic Product, 1st Quarter nd Quarter 2013 In the second quarter of 2013, growth in Finance, Real Estate and Business Services was reportedly due to increased activities in equity, bond and other financial markets in auxiliary activities, and increased by 2,6% from quarter two of Figure 3: Personal Care Services GDP Services SETA Sector Plan 2014/

31 Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 Source: Stats SA Gross Domestic Product, 1st Quarter 2013 The Personal Services major division at Stats SA covers the following Services SETA activities; activities of membership organisation N.E.C, washing and (dry)-cleaning, hairdressing and other beauty treatment, funeral and related activities and other services N.E.C. We see a steady growth in this sector from the first quarter of 2012 to the second quarter of Figure 4: Sector contribution to GDP growth rate Source: Stats SA Gross Domestic Product, 2nd Quarter 2013 Figure 4 represents the percentage change in GDP for the Finance, Real Estate and Business Services Sector and the Personal Services Sector, against the percentage change in GDP for the economy as a whole. Finance, Real Estate and Business Services were the largest industries at 18%. Personal service from the second quarter was measured at 11.3%. Growth in GDP for the sector outperformed the economy in several quarters between 2011 and It is necessary for the Services SETA to conduct economic research in the future to disaggregate and understand the contribution made by each of the Services SETA s 16 sub-sectors in the economy. Levy Income Services SETA Sector Plan 2014/

32 Levy income data indicates that the Services SETA experienced a steady growth in levy income between 2006 and Levy income serves as a good indication of the general increase in payroll from year to year across the various sub-sectors. Levy income is a reasonable proxy to gauge the level of earnings within the sector, and in this case also shows an increase in total employee earnings over the period under review. Figure 5: Growth in SD Levy income over 6 years Source: Services SETA employer database July 2012 The levy income for the 2012/13 financial year was R1 032 million, which is an increase of 6.19% compared to prior year. The increase in the levy income indicates growth in the services sector and annual salary inflationary increase, which led to higher Development Levy (SDL) contributions by employers and hence a higher levy income for SETAs. Figure 6: LPE vs. NLPE Source: Services SETA employer database, July, 2013 The characterisation of the sector by small and micro sized enterprises (SMEs) implies that turnover is likely to be low and jobs not labour intensive. In terms of the levy payment figures available, 72.1% Services SETA Sector Plan 2014/

33 of the employers do not pay levies. Of the 27.9% of employers that are paying levies 44% pay less than R and the remainder (56%) pay more than R There are some sub-sectors which have shown a steady growth in the number of employers not paying levies and some sub-sectors fluctuated. The services sector has grown over the period 2005 to 2013 along with the SMEs across the sub-sectors. This is mirrored in the number of employers that are not paying levies, which has increased from in 2005 to in In terms of LPEs, there was a decrease of businesses within some sub-sectors between 2009 and 2013 due to the changes in the grant regulations exempting SME s from paying levies. While there has been an overall decrease, some sub-sectors such as business services, hiring services and household services demonstrated consistent annual growth between 2006 and The increase in the Hiring and Cleaning Services can be attributed to wage increases, expansion of companies and easy entry into these sub-sectors. Companies, based on their core business activities, choose the SETA where they pay their skills levies to, based on their SIC code. Companies do not change their SETAs unless there is a fundamental change in their core business. 2.2 Workplace Plan (WSP) The Services SETA received WSPs, out of employers in the sector, in 2012 which was an increase of 222 from the previous year. The majority (75%) of these came from the Business Services sub-sector. Figure 7: Number of Employees by Occupational Group based on WSPs Source: Services SETA WSP 2011/12 Analysis of the WSPs for 2012 demonstrated that there were employees employed by employers. The highest number of employees was elementary workers who constituted 33%, clerical support workers 24% and machine operators and drivers 10% of the workforce respectively. Most notably there has been a decrease of (9%) in elementary occupations. These employees are spread across occupations on the Organising Framework for Occupations (OFO). The OFO is a skills-based, coded classification system which built on the South African Standard Classification of Occupations (SASCO). It is used by the Department of Labour, SETAs and DHET for reporting on skills. Its purpose is to capture all jobs in the form of occupations and groups occupations into successively broader categories and hierarchical levels based on skill level and skill specialisation. Of the occupations represented within the Services SETA, 25.5% of occupations are professional, followed by technicians and trades workers at 17.9%. The lowest number of occupations was Clerical Support Workers with 5.9% of all occupations represented. Services SETA Sector Plan 2014/

34 Figure 8: Number of occupations based on WSPs Occupations Managers Professionals Technicians and Clerical Support Service And Sales Skilled Agricultural, Plant And Machine Elementary Unknown Number of Occupations Source: Services SETA WSP 2011/12 Prior to 2010 employers were not using OFO codes for the submission of WSPs and hence the employee categories for the prior years was not comparable with the OFO codes used recently. The category of non-permanent employees which made up 38% of all employees in 2009 has now, under OFO version 2013, been replaced with appropriate occupations. In terms of general employment trends in the sector there was an increase based on WSP submissions. While the WSP submissions should be read with caution as some employers may choose not to submit a WSP in one year and submit in another. Figure 9: Number of WSPs received Source: Services SETA WSP submission Despite the small increase in the number of WSP submitted, employment has continued to demonstrate an upwards trend and has increased by between 2006 and 2012 as per figure 9. A combination of expanded capacity development and simplifying the on-line system may result in increased submissions during the next period. Figure 10: Employment statistics based on WSPs Services SETA Sector Plan 2014/

35 Source: Services SETA WSP submission Employment based on WSPs We can therefore conclude that the employers submitting WSPs are larger employers with resources and are likely to be employing the majority of workers in the sector. 2.3 Findings Geography South Africa s economic profile is characterised by three developed and industrialised regions in Gauteng, KwaZulu-Natal and Western Cape. Estimates from Stats SA indicate that the highest economic growth rates per region for 2012 compared with 2011 were recorded in Western Cape at 3,2 per cent, Gauteng at 2,9 per cent and KwaZulu-Natal at 2,8 per cent. Figure 11: Gross Domestic product per region WC EC NC FS KZN NW GP MP LP Source: Stats SA Gross Domestic Product, 3rd Quarter 2013 The profile of the Services Sector mirrors the three dominant provinces with 55.5% employer situated in Gauteng, 13.8% in the Western Cape and 8.5% in KwaZulu-Natal who collectively contributing nearly two-thirds to the South African economy. The provinces with more remote areas such as Limpopo and Northern Cape had around 1% of Services Sector employers indicating that industry supports more primary and secondary economic activities in these areas. Figure 12: Employers by province and sub sector Services SETA Sector Plan 2014/

36 Source: Services SETA employer database, July 2013 Services SETA Sector Plan 2014/

37 Table 7: Employers by province and sub sector Unclassifi Sub-sector EC FS GP KZN MP NC LP NW WC Total ed Beauty Treatments Business Services Contact Centres Cleaning Collective Services Domestic Services Fashion Funeral Services Hair Care Hiring Services Household Services Labour Recruitment Services Marketing Postal Services Project Management Real Estate Services Unallocated Total (13.8% (3.9%) (2.7%) (55.8%) (8.5%) (2.2%) (0.8%) (1.1%) (2%) (9.4%) ) Source: Services SETA employer database, July 2013 The majority of the 16 sub-sectors are represented by employers in all nine provinces, while the remaining sub-sectors have employers in provinces where industry supports mainly tertiary economic activities. As an example, the location of contact centres has become immaterial due to the nature of the business and as such can be situated anywhere. Contact Centres were situated mainly in Western Cape, Gauteng and KwaZulu-Natal. Recent research (focus groups) conducted by the Services SETA highlighted that the Call Centre sub-sector in South Africa had potential for growth due to the exchange rate of the ZAR, the multi-lingual population and convenient time zone Employee Workforce Profile Race, gender, disability, class, HIV prevalence (Transformational imperatives) The Constitution of the Republic of South Africa read with the Employment Equity Act of 1998 (EEA) prohibits any form of unfair discrimination in the workplace in terms of race, gender, disability, class, HIV status, pregnancy etc. The EEA requires the employment profile of organisations, particularly in terms of race and gender, to mirror that of the economically active population of the country. The EEA further requires employers to reasonably accommodate people with disabilities. Services SETA Sector Plan 2014/

38 Analysis of data collected from WSPs demonstrated that the majority of the Services Sector s employees are African followed by Whites, Coloureds and Indians. In 2012, Africans constituted 73% of the sector, Whites 11%, Coloureds 10% whilst Indians represented 6%. Between 2006 and 2012 there have not been significant changes to the representation of any of the racial groups. Figure 13: Employee race Source: Services SETA WSP submission According to the Commission for Employment Equity (CEE) , the Community, Social and Personal Services Sector was identified as the most progressive sector ranking in relation to employment equity at the top management level in terms of race and gender. Figure 14 shows the employee gender split in the Services Sector. The employment of males has seen a small decline from 59% in 2010 to 56% in The employment of females increased from 41% to 44% in the same period. Figure 14: Employee gender split 44% 56% Female Male Source: Services SETA 2011/12 WSP submissions Services SETA Sector Plan 2014/

39 In terms of data collected from WSP s, there were people employed with a disability in the sector in The figure below illustrates the types of disability in the sector; these should be considered for future training. Figure 15: Disability in the sector Source: Services SETA 2011/12 WSP submissions HIV and AIDS have a significant impact on employment in South Africa. According to Statistics SA's mid-year estimate for 2013 the overall HIV prevalence rate is approximately 10% and the total number of people living with HIV is estimated at approximately 5, 26 million. For adults aged years, an estimated 15,9% are HIV positive Sub sector trends Communications and Marketing Services The consumer protection Act (68) of 2008 impacts on this sub-sector as it contains many provisions relating to the marketing of goods and services. In particular, it provides for a standard cooling-off period if goods or services were promoted by way of direct marketing and also prohibits unsolicited direct marketing. The Broad-based Black Economic Empowerment legislation is seen as creating barriers to entry and resulting in high staff turnover and loss of skills. There has been change in government departments who now employ communications staff rather than contracting a communications company thereby reducing the demand for private industry services. The recession has had high impact on the sub-sector as organisations have cut their budget for communication and marketing. The recessionary impact has also resulted in a skills drain, with experienced professionals emigrating. There is a decrease in clientele, services, and sales but an increase in the scope of work. Multinational are entering the emerging markets in South Africa. These factors are resulting in more players in a shrinking market space. The growth in technologically driven social media and networks has changed the nature of the marketing and public relations business. The consumer market is more easily accessed through on line marketing and advertising resulting in the decreased use of specialist marketing, communication or public relations enterprises. Digital communication is a growth factor in the communication and Public Relations industry. Services SETA Sector Plan 2014/

40 Contact Centres Contact Centres make up 70% of the business process outsourcing services. It is still a young industry having grown in the 70s and 80s. Technology upgrades to compete internationally; employing persons with disability; social networking (e.g. Twitter, Facebook) for which not all of the industry is ready; correct technology to support non-voice make it difficult for the sub-sector to keep up to date with technology, especially SMEs. Presently 73% of Contact Centres fall with the small business size category. Government initiatives such as tax incentives and rebates for those starting contact centres are viewed as falling below the norm for international counterparts, resulting in a less competition that is less attractive to international investors. The industry worldwide is growing at a faster rate with countries like India and China being favoured by international investors due to their cost effective labour. This has compromised the growth of the domestic market. There is a growing trend for contact centre agents to be diverse in South African indigenous languages. The industry suffers high staff turn-over as it is seen as a stepping stone to employment by young people. Many Contact Centres operate 24/7 and this impacts on the health of employees. Employees are more susceptible to illness, fatigue, little family interaction, and a decrease in social life. The loss of productivity impacts on profit and many companies are finding a Contact Centre difficult to sustain. Staffing providers for the industry are being affected by amendment to the labour legislation. Training is essential for all contact centre operators and this has high cost implications. There is potential to create employment in this industry, particularly as government through the IPAP II and the National Development Plan which has identified business process outsourcing and off-shoring as a growth area. Cleaning Services A trend in the Cleaning Services has been an increase in the number of small companies entering the market. Big national companies prefer to procure one large cleaning company to service all their offices in all provinces and this puts the smaller cleaning company at a disadvantage and mainly restricted to servicing residential clients. Another challenge is that companies that hold high standards are competing with fly by night operators who do not have the resources, knowledge and ability to fulfil tasks. This makes the industry appear unprofessional and compromises consumer trust in the industry. Career growth is limited and competitive. The regulation around minimum payment for cleaning services is rarely followed and is extremely low to sustain a decent livelihood. South Africans also experience competition from non-nationals who work for cheaper rates. Traditionally the cleaning industry has a poor environmental reputation, resulting from its heavy use of energy, water and chemicals that can cause environmental problems. There has been an increase of businesses adopting green policies, from recycling office paper, to using green cleaning products. This presents an opportunity for Cleaning Services. Household and Domestic Services Critical issues affecting this sub sector relates to hygiene, dangerous chemical knowledge, application and knowledge of green cleaning methods. If not addressed, the industry may see accidents and even fatalities as employees engage in hazardous tasks without proper guidance and safety rules. Gardening can be profitable if the individual has proper skills and the business is managed properly. In South Africa the majority of garden service workers are amateur labourers without proper training. Many business owners require business management training in order to professionalise their services and making their business more profitable. The workforce in the household, domestic and cleaning services has become more organised with employers noticing higher level of union activity which impacts on productivity. Employers also reported an increase in the number of cases taken to the Services SETA Sector Plan 2014/

41 CCMA. Training in this area will be important in terms of remaining within the law, and helping to develop self-regulation and standards for the industry in relation to good employment practice and accountability. Training is for tendering and getting contracts set up for these sub sectors. Hiring Services Hiring Services are mainly third party outsourcing services in the private and public sectors. There are high costs to entry due to the price of equipment and machinery especially for heavy duty vehicles, plant equipment and machinery used for construction and mining. Plant hire is a major industry in South Africa and it has been estimated that there are between and operators currently in the market place. The sub-sectors experience low profit margins which are affected by tax changes which negatively impacts on emerging small operators. The Hiring Services have the potential to grow and increase employment with government s planned Strategic Integrated Projects, and continued human settlement development plan. High fuel, transportation and maintenance cost also affects the sub sector. The sub-sector requires access to skilled workers and technicians, many of which are a scarcity. The health and safety regulatory environment is governed by numerous regulations (mining, construction, labour and municipal) which are not aligned and in some instances not clear. This enables unscrupulous operators to find gaps and get away with operating in these sub-sectors that have life threatening high risk factors. Adoption of safety standards and regulations are becoming compulsory. Little to no enforcement of occupational standards has also affected the sub-sector. Vehicle operators are to have a minimum Grade 9, Code 10 driving license and licensed operator training. Due to the low levels of policing by the Department of Labour inspectorate, unscrupulous operators are providing licenses which lead to higher fatality incidents. There is no sectoral determination for the hiring services. There is wide spread low wages and noncompliance to basic conditions of employment. The industry has been associated with labour broking. The hiring industry is male dominated due to its demands of long periods of time away from home. The prevalence of HIV and AIDS has also affected the hiring services. Postal Services There has been a decrease in government subsidy in public sector post services. Government interventions for the expansion of postal services to rural areas are not being implemented as speedily as anticipated. This has been identified as a Strategic Integrated Project enabler and an area of growth. Mail volumes have dropped and the Post Office continues to lose customers to technology based communication platforms. The Broad-Based Black Economic Empowerment has created opportunities for women in the private sector. Space created for private services has meant competition for public Postal Services. In the private sector the services offered include courier services, counter to counter at Postal Service offices, delivery to private or business addresses and various speeds of delivery. The public Postal Service has had to adapt and expand services to post banking. This has had an impact on the skills needs of the public postal services as the industry is to upgrade skills of employees. Operations within the sub-sector have become more computer-driven and have felt the effects of rising fuel price in transportation for deliveries.. Digital technologies can provide additional channels to market to offer efficiencies in the operational side of the business and bring value-add services. Labour Recruitment Services The majority (74%) of the industry are SME and 68% non-levy paying companies. A major factor affecting the industry is the impending labour law amendments and the negative impact stakeholders see these as having on the private employment services sector. The legislative changes are seen to increase the administration cost for compliance of business making smaller businesses difficult to Services SETA Sector Plan 2014/

42 sustain. It is envisaged temporary employment services will become less attractive for clients to use. The increased decent work with the legislation will eliminate exploitative practices, ensuring health and safety standards for workers. Industry experts have acknowledged the legislation will increase cooperation on wage negotiations, increase skills development and help to achieve decent work standards. Technology has influenced the industry with a growing challenge of smaller Labour Recruitment agencies in competition with larger companies who have the resources to recruit online. Real Estate and Related Services The economic downturn affected the industry and brought in a decline in business. Large established businesses dominants the market, creating difficulty for new entrants to establish their business. The employment and remuneration model also affects the industry as it is commissioned based and makes the industry unattractive for potential new entrants. The sub-sector is challenged by a lack of specificity and sectoral determination in the Estate Agents Act. Estate agent employment status as defined in terms of the Estate Agents Act is not aligned with the Basic Condition of Employment Act and Section 200A of the Labour Relations Act, which discourages new entrants and transformation as well as compliancy of paying Development Levies. Over-regulation and the lack of implementation thereof further create a poor perception of the occupation and leave consumers vulnerable and exposed. The Real Estate sub-sector is filled with an aged workforce and succession plan needs to be put into place to plan for the future. The average age for a Real estate professional is 64. The Estate Agents Act is viewed as out-dated and does not speak to the Development Act. The Sectional Title Eviction Act makes it difficult to evict tenants from a property, resulting in devaluation of the property and severe as a loss of revenue. Real Estate has moved to the Department of Human Settlement which was previously under the DTI s portfolio. Due to the over lapse with the Department of Public Works, the Estate Agency Affairs Board experienced difficulty implementing its mandate. Talk of nationalisation of land is resulting in investor withdrawal but impacting positively on property ownership and development. Debilitating crime (including corruption, lack of security, law and order challenges) results in some international investors withdrawing from South Africa. The National Credit Act is hampering the industry as banks are very strict in providing financing for potential property owners and developers. In evaluating home loan applications, lends are obliged to thoroughly assess the applicants credit history, determine whether repayment if affordable, supply a quotation and a pre-agreement and the terms, the content and the implications of the credit agreement is understood. One of unintended, effects of the NCA is that the approval process could take longer than before. High interest rates, inflation fluctuations and high taxation (e.g. transfer duties) have added to the negative growth of the sub-sector. Poor performance from municipalities leads to delay in property transfers and poor cash flow makes a real estate business a high risk with financial institutions. The inadequate definition of occupational scope is limited to sales and rentals and does not include fractional ownership, time share, and commercial property brokering. Access to information via the internet has diluted the impact of agents. Technology is important for agents but the number of techno-competent agents is limited and the cost of technology set-up is high. A significant amount of Real Estate agents in the 2013 SSP research have expressed the need for further capacitation linked to computer skills especially for virtual house viewing which is becoming popular for busy clients. Environmental factors impacting on this sub-sector include lack of water management affecting building operations. At present greening carries high costs for the industry. The identification of relevant green skills addressing the national strategies is an opportunity for the Real Estate state subsector to play a greater role. Services SETA Sector Plan 2014/

43 Funeral Services Funeral Services has seen growth in private cemeteries and crematoriums. Cremations are becoming the preferred option for burial. The sub-sector is governed by an array of non-aligned legislation at national, provincial and local government levels. At a national level the Departments of Home Affairs, Health and South African Police Services have legislation that impacts on the sub-sector. Each province and their local municipalities have their own legislation but there is a lack of regulatory enforcement and unethical operations are on the rise. Health and safety is an issue for the sub-sector. The lack of regulation has the potential to result in the spread of high risk infections. The sub-sector experiences high staff turn-over. Business Services The sub-sector comprises of small and micro enterprises of which 91% have less than 49 employees. Large international management consulting businesses are dominating the market space. As a result a high number of smaller business advisors are leaving the country. The economic recession has also resulted in emigration. Entry into the sub-sector is largely dependent on acquiring high level skills and the trajectory to competence for sustainable professional businesses which require a number of years of work experience. The sub-sector has yet to determine more accurately the knowledge base competency and road map to professional competency. Learning towards competency is reliant on coaching and mentoring. Growth of SMEs is reliant on business advice, mentorship and access to finance. Continuous professional development programmes is important for the retention of developed professional skills. Government s development plans creates a huge potential for growth in this sub-sector in rural areas. The lacks of protection for intellectual property rights affects this sub sector. Collective Services Except for the CCMA, this sub-sector is made up of voluntary associations; federations; umbrella bodies and professional bodies. These bodies are faced by the challenges of struggling for relevance, acquiring and increasing membership and funding. They are largely dependent on volunteers to run the organisations and those that can, recruit employees with limited basic skills to run the organisations. Unless they can be supported by legislation, these bodies will continue to struggle to promote their services, social values and membership. The CCMA deals with the complexity of labour legislation for which it needs skilled people with both intermediate and high level skills. The view of the CCMA is that engagement with higher education institutions is necessary to ensure the public receives better services. Project Management Service delivery and economic growth are dependent on the quality of project management skills available in the country especially in light of the SIP s. Project Management is a cross-cutting skill needed in all social and economic sectors. Currently there are about project managers in the public sector whose project management skills vary. Government s development projects and other large scale and large budget human and social development projects require high quality project management skills. The demand for project management skills is increasing. International companies have seen the gap and are beginning to take up the space in South Africa and the rest of the continent. Hair Care Services The Hair Care industry tends to be highly informal and entry into the business is not controlled. Municipalities have health and trading regulations but these are not adhered to and municipalities do not have the capacity to enforce these by-laws. Product suppliers are providing short term training which is not in line with industry standards. In some of this training, products and ethics, health and environmental safety and the handling and disposal of dangerous chemicals are ignored. The lack of Services SETA Sector Plan 2014/

44 training standards control means hairdressers with no understanding of the dangers to environment and health are practicing. Employers in the sub sector have stated that there are products being distributed in the African market that have been banned in Europe and North America. These impacts on formal businesses being forced out of the product market. Trends observed in formal hair care companies are a decrease in the number of young new entrants, an increase in the availability of consumer products and hair care practitioners from across the African diaspora operating in South Africa. Formalised hair care employers require qualified hairstylists. Current and past key trends in employment are that there is an increase in contract workers ( renting a chair approach 1 ), high staff turnover, learners providing cheap labour and a reduction of client activities during economically difficult periods. Businesses in this sector are mainly SME s (73%) and many employees experience unfair labour practice (e.g. unreasonable working hours). There is a growing demand for qualified hairstylists in the Afro hair industry. Beauty Treatment The Beauty Treatment industry has formal education and training, mainly at HEIs. The beauty therapy profession is regulated by the Allied Health Professional Council who does not cater for lower entry level occupations. The mandate of the Council also does not provide adequate controls regarding setting up operations. This is the mandate of municipalities which do not have the capacity to control entry and enforce health and trading by-laws. Other challenges are legislation does not prohibit foreign therapists from opening business which are usually at cheaper rates. The sub-sector is a critical value-add for the tourism industry and therefore raising skill standards will have an impact on the growth of tourism as well as the creation of employment. There is an increase in demand for Botox treatments as more clients want to look younger. These treatments need to be performed by highly skills therapist which, if not, can have dire consequences for the client. Franchisers, many of whom advertise online, disenfranchise smaller Beauty Treatment businesses. Small Beauty Treatment companies make up 88% of this sub sector. Fashion This sub-sector is made up of seven employers of who are mostly small sized companies. This subsector experiences cheap labour and in certain instances models pays huge sums of money to be headhunted for a modeling career. Employers have stated a possible growth area for models is in the filming industry. A large amount of international companies are using South Africa as a location to film due to the country being aesthetic. Fashion companies engage in business activities that cut across design, manufacturing, marketing, retail and enterprise management. The enterprises have also diversified into fashion accessory design (e.g. head apparel, jewelry, shoes and bags). The industry is highly competitive and dependent on individual creativity and the protection of intellectual property. Intellectual property laws in South Africa are weak and pose a challenge to business sustainability. Employers mentioned that traditional beadwork designed and produced in South Africa is used overseas for interior design and this downgrades the fashion creative value of some of the local designs and products. Fashion is a reflection of individual creativity, culture and development. There is a need for stronger intellectual property rights to protect this value and maintain the competitiveness of the local industry globally. Globally and locally, retail chain stores are diversifying into offering unique designed products which traditionally were available through the boutique retail industries. This is an area of growth that the local fashion industry needs to tap into. Although the design aspect is high skilled, the down-stream skills of pattern making, cutting, and tailoring are mid- level skills that enable entry at the lower end 1 A number of hairstylists rent chairs in a salon structure and each is responsible for servicing their own customers who walk into the salon. They pay a daily rate to the owner for the sapce they have each rented in the salon Services SETA Sector Plan 2014/

45 of the sub-sector. This sub-sector has also been affected by technological advances as technology based design and pattern making is becoming more prominent as it increases production. Events Management This sub-sector has low barriers to entry and competition from smaller companies is on the increase. There is a move towards regulated services and standards through government policy and legislation. The Events Bill is in the process of being developed and promulgated into law. There is a focus on greening events with the acknowledgement that events leave a large carbon footprint. Event organisers are starting to look at greener events in SA. Recent economic times have seen corporates diminishing their marketing and function budgets which in turn affect the sub sector. With a booming middle class in the country, private individuals are increasingly using services of event management companies for their private functions, parties and weddings. There is an increased use of technology in the management of events and often this requires sophisticated technological skills, especially when events are broadcasted internationally or streamed over the internet. Given the temporary nature of events, businesses often use temporary staff for events with a small core of permanent staff. Interior designers and decorators The industry was negatively affected by the global recession however awareness of the interior industry is growing. Likely trends in the activities over the next five years are an increase in small to medium businesses entering this field. A current trend is designers and decorators alternating employment to gain experience and exposure in all areas of the industry. Section 3: PESTEL ANALYSIS 3.1 Purpose The purpose of this section is to understand the external factors and the drivers of change affecting the Services SETA sub-sectors. The PESTEL analysis is a standard analytic framework in environmental scanning and examines these factors with particular focus in the areas of politics, economics, social factors, technology, the environment and legislation. The following section is a summary of findings of the PESTEL research. The summary focuses on those sub-sectors that identified specific challenges and factors that impact on skills demand for the sector. 3.2 Political Analysis Until the global economic crisis of 2009 South Africa had enjoyed sustained growth. The recession caused a loss of more than a million jobs, specifically those of unskilled and semi-skilled labour. At the same time, the lack of a well-qualified workforce is the primary factor limiting the continued development of the economy. For these reasons, education and training are at the top of the political agenda. Government s political influence on the Services Sector spans a wide variety of aspects such as: Consultation (e.g. NEDLAC) Work agenda National Fund Government policies Over-regulation Compliance with statutory requirements SETAs Services SETA Sector Plan 2014/

46 A challenge experienced in the Labour Recruitment Services sector has been the amendments to the Employment Services Bill and the impact that it has had on Temporary Employment Services (TES). In addition The Congress of South African Trade Unions (COSATU) has led the call for the complete banning of labour brokers. While the Labour Relations Amendment Bill had been put on hold in parliament, many employers had already taken steps to reduce their reliance on brokers over concern that they might have to take on casual workers fulltime, at great cost. The costs will be onerous for administration and will require additional support in respect of skills development, information and practical tools to assist in compliance. This will negatively affect small TES companies in the sector. Contact Centres sub-sector has been affected by amendments to labour legislation by not being able to offer flexible staffing solutions. It is interesting to note that international investors make extensive use of contact centres in India and China as the economies of those countries offer financial advantages such as lower salaries. In the Real Estate sub-sector increasing rates and utilities costs discourage investors. Talk of the nationalisation of land is resulting in investor withdrawal but also impacting positively on property ownership and development. 3.3 Economic Analysis Economic Performance and Outlook The Services Sector has shown sustained growth in the last two years, in terms of job creation and expansion of services into other African countries. The Services SETA forms part of this wider sector. The Services Sector, which includes utilities, ICT and financial services, public services, and tourism, has shown an increase in total output and now accounts for approximately two-thirds of Gross Domestic Product (GDP) and 70% of employment (Stats SA, 2010). Figure 16 indicates that the tertiary (services) sector of the economy witnessed positive, consistent growth quarter on quarter, with the exception of the first and second quarters of In contrast, in the primary (mining and agriculture) and secondary (manufacturing) sectors volatile growth patterns persisted. Figure 16: Value added growth rates in various sectors ( ) Source: Stats SA Gross Domestic Product, 2nd quarter 2013 Services SETA Sector Plan 2014/

47 Statistics SA reported the largest industries, as measured by their nominal value added in the first quarter 2013, were Finance, Real Estate and Business Services (21%); General Government Services (16,7%); the Wholesale, Retail and Motor Trade and Catering and Accommodation Industry (15.8%) and the Manufacturing Industry (11.7%). During 2012 and the first half of 2013 the global economy continued to feel the effects of the global financial crisis. Figure 17: Gross Domestic Product by Sectors Source: South African Reserve Bank Annual Economic Report 2013 As illustrated in Figure 17, the tertiary Sector demonstrated a remarkable degree of resilience relative to other sectors of the economy in the recession of Growth in the real value added by the finance, insurance, real-estate and business services sector increased from a rate of 2.9 % in 2012 to 3.3 % in Growth in the tertiary sector, which constitutes around 60% of total GDP, lost some momentum in 2012 although still contributing 1.9% to the overall economic growth. This level of stability acted as a protection against job losses experienced in other economic sectors. Services SETA Sector Plan 2014/

48 Overall, South Africa experienced a slow rate of economic growth in 2012 and the first quarter of However the tertiary sector recorded the strongest and most consistent pace since the global recession in This trend shows that the sector is relatively more stable than other sectors of the economy and acts as a buffer during economic downturns. It also shows that the sector is a key contributor to economic growth, skills upgrading and job creation. The Services SETA thus has a major role to support skills development in a steadily growing sector. It requires the Services SETA to scale up and expand its activities as the economy and workforce shifts towards the sector. The Services SETA strategy for the next five years must ensure it supports the stability shown by the services sector during economic downturns through appropriate skills development. The Services SETA must also support SMEs as they are showing their significance in employment creation within the economy Employment Trends In the absence of credible market research and economic data to determine employment trends in the Services Sector, Business Services and Real Estate Services are used as benchmarks for the sector. With the majority of SIC codes in the Services sector represented in the Business Services, this serves as a good indicator of general trends. Business Services had experienced a general increase in employment between 2000 and 2010 with a weighted average annual growth rate of 10.33%. The sub-sector employed people in 2010, which is a substantial growth from employees recorded in The consistent growth in the sub-sector is shown in Figure 18. Figure 18: Employment in the Business Services Employment in Business Services (SIC 83-88) - Source: Quantec (2010) Figure 19 shows that over 89.5% of the employers in the sector have between 1-49 employees. Those with between 50 and 150 employees constitute 1.7 % of all employers. Large employers with more than 150 employees made up 0.8% of all employers. Employers that have not verified their business size constitute 8%. Services SETA Sector Plan 2014/

49 Figure 19: Companies by business size 100% 80% 60% 40% 20% 0% 89.50% 1.70% 0.80% 8% unallocated Source: Servies SETA employer database July 2013 Figure 20 demonstrates employment levels for the Real Estate Industry for the year March 2010 to March Employment levels dropped slightly from around to in March 2012 for the entire industry, however employment increased overall in the small to medium companies from to Figure 20: Real Estate Services employment levels Employment Total real estate Small and medium employers 2nd Quarter 2012 Source: Stats SA GDP Figure 21: Real Estate Services earning levels Gross Earnings Total real estate(in millions) Small and medium employers(in millions) Source: Stats SA GDP 2nd Quarter 2012 Services SETA Sector Plan 2014/

50 The real estate services sector employment and earning trend is driven by the small and medium businesses, from this we can determine that small and medium sized businesses in this sector are contributing more towards economic growth than the larger ones The Services SETA Sector Labour Market The unemployment rate is one of the biggest social and economic problems facing South Africa. In the second quarter of 2013, South Africa had almost 2.4 million discouraged work-seekers aged between 15 and 64 years. The official unemployment rate from the second quarter of 2013 is 25, 6 %. Labour Market information specific to the services sector is not readily available. The DHET is currently working on a labour market intelligence partnership project with the Human Sciences Council (HSRC). The project aims to set up systems with reliable data indicating skills needs and labour market supply and demand to better plan for human resources development needs. According to the Stats SA Labour Force Survey, an estimated jobs were lost between 2008 and By the first quarter of 2013, of these employment opportunities had been regained and in the second quarter employment increased by jobs. Table 8: Key labour market indicators 2010 average 2011 average 2012 average Apr-Jun 2013 Population: years Labour force Employed Formal sector (non-agricultural) Informal sector (non-agricultural) Agriculture Private households Unemployed New job entrants to the job market Job losers Other Not economically active Discouraged workers Other Rates % Unemployment rate Youth unemployment (15-24 age group) Employed/population ratio (absorption rate) Labour force participation rate Source: Statistics SA, Quarterly Labour Force Survey nd quarter Data on the size and shape of the labour market in the Services Sector is not readily available for a number of reasons such as; a significant number of employers and employees are operating informally; a large number of employees, working in the formal sector may be unrecorded due to their Services SETA Sector Plan 2014/

51 job title; a number of employers are not registered with SARS or the National Bargaining Councils; and a number of employers are not registered to pay skills levies because they are exempt or do not pay. The following table provides a trend analysis of employment by sector over a five year period. It has implications for the provision of skills development for the Services SETA and other SETAs located in the tertiary sector of the economy. Table 9: Annual percentage change in employment by industry Industry Agriculture Mining Manufacturing Utilities Construction Trade Transport Finance and other business services Community and social services Private households Total Source: Labour market dynamics in South Africa 2011 Between 2010 and 2011, jobs were lost in the utilities, agriculture, private households, transport, and construction industries. In contrast, employment in finance and other business services increased by 3.3% and community and social services increased by 4.5%. Employment in private households has experienced a decline since Table 10: Employment by occupation Industry Thousand Manager Professional Technician Clerk Sales and Service Skilled agriculture Craft and related trade Services SETA Sector Plan 2014/

52 Plant and machine operator Elementary worker Domestic worker Total Source: Labour market dynamics in South Africa, 2011 Table 10 provides additional evidence that employers in the economy have increasing demand for skilled labourers and qualified personnel. Jobs in managerial areas showed an increase from to in the six year period. In the professional and technical industries over jobs were created. Figures 22 and 23 reiterate the above data from the labour market and are based on the Career Junction Index, developed by online recruitment specialists Career Junction. The index uses a sample from 2.4 million registered job seekers and the thousands of jobs published on their site. Figure 22: Industries in demand Source: CareerJunction Index, September 2013 Services SETA Sector Plan 2014/

53 Figure 23: Industries in high supply Source: CareerJunction Index, September The informal services sector The services sector includes many informal business activities which are not recorded in the national accounts, and not subject to formal rules of contract, licensing, labour inspection, reporting and taxation. As developing economies are characterised by huge informal sectors, commercialising and formalising these enterprises is extremely important. In many parts of South Africa the "informal sector" is a significant contributor to the economic welfare of individuals, communities and society. Despite its apparent size and scope, the extent to which this sector has the potential to transform into an important source of sectoral and national economic development remains unclear. Much of what is called informal is often seen as a basic survival activity, creating little in the way of employment or wealth. However there is growth potential in a number of Services SETA sub-sectors in the informal services sector. Some Services SETA industries operating in the informal sector are: Funeral Services Hair Care Beauty Services Postal Services Hiring Services Cleaning Services Household Services Domestic Services Industrial and Special Economic Zones South Africa s economic policy includes schemes designed to encourage and promote international competitiveness in the country s manufacturing sector. This was set out in Government s Economic Programme of Action, where Industrial Development Zones (IDZ s) were cited as a means by which the country would attain increased levels of foreign direct investment in the economy. An IDZ is a purpose built, industrial estate linked to an international air or sea port, which might contain one or multiple Customs Controlled Areas tailored for manufacturing and storage of goods to boost beneficiation, investment, economic growth and, most importantly, the development of skills and Services SETA Sector Plan 2014/

54 employment in these regions. This would primarily be achieved through incentives to attract foreign and local investment within these zones and boost the country s economic attractiveness. The Department of Trade and Industry (DTI) currently operates IDZs in the Eastern Cape and KwaZulu-Natal. The DTI are expanding the industrial development services through Special Development Zones (SEZ). The Services SETA is currently involved with the Coega IDZ and there is a need for SETAs to play a coordinated role in facilitating skills development within the IDZs. Amongst other industries, the IDZs promote Business Process Outsourcing and Advanced Plant Operations which links to the Hiring Sector, two of the areas being addressed by the Services SETA. 3.4 Social Analysis According to the latest population estimates provided by Stats SA in the Census 2011 South Africa s population is estimated to be million disaggregated by province as follows: Table 11: Population estimates by province Province Population Estimate % of Total Population Eastern Cape % Free State % Gauteng % KwaZulu-Natal % Limpopo % Mpumalanga % North West % Northern Cape % Western Cape % Total % Source: Stats SA Census 2011 Statistics, 2012 Females comprise approximately 51.3% of the population. The largest province is Gauteng followed by KwaZulu-Natal whilst the Northern Cape continues to remain the province with the lowest population. Nearly one-third (29.2%) of the population are younger than 15 years and approximately 5.3% (2.7million) are 65 years or older. Of those younger than 15 years, approximately 23% (3, 66 million) live in Gauteng and 19, 4% (3, 07 million) live in KwaZulu-Natal. The National Development Plan Vision 2030 provides a synopsis of demographic trends that all national planning, including sector skills planning, needs to take into account (NPC, 2011). It is expected that by 2030 the population will reach 58.5 million with about 70% living in urban areas. Although the precise number of immigrants in the country is not clear, estimates are that immigration will add another 0.1% and 0.2% to the country s population. HIV and AIDS infection rates have stabilised at about 10% and improved treatment has reduced the death rate, whilst life expectancy is rising again. The metropolitan areas of Gauteng, ethekwini and Cape Town are the fastest growing regions. The country is experiencing declining fertility rates. It is expected that by 2030 the number of 0-5 year olds will decline by , six year olds will stabilise and 7 to 17 year olds will decrease by The distribution of the population across the rural-urban divide and across provinces, as affected by the migratory patterns emerging, will have implications for the growth of the Services Sector which Services SETA Sector Plan 2014/

55 will affect skills development planning and human resource and infrastructure planning over the next five years. HIV and AIDS have a significant impact on employment in South Africa. Stats SA reported approximately 10.6% of South Africa s population or 5.38 million people were living with HIV in HIV and AIDs infection rates have since stabilised and improved treatment has reduced the death rate. Life expectancy is rising again. However the sub-sectors are still feeling the effects of HIV and AIDS resulting in absenteeism, scheduling challenges, stigmatisation and discrimination and the impact of decreased productivity on profit loss. Contact Centres tend to suffer high staff turnover due to the youth profile of the typical employee and the high stress environment. The sub-sector has also reported incidence of alcohol and drug abuse in the workplace, poor performance, and absenteeism. The Beauty Treatment and Hairdressing sub-sector has felt the impact of the number of illegal immigrants in the country opening businesses of this nature and charging reduced rates. Trends observed in formal hair care are a decrease in the number of young new entrants and high staff turnover. Regarding Beauty Treatments, due to the pressure and stress of work life balance, more people are resorted to beauty and massage therapy due to its benefits of helping their clients to look good and feel relaxed. The Real Estate Industry has seen the effects of debilitating crime, including corruption, lack of security, law and order challenges, on their sub-sector. As a result of these social factors some international investors have withdrawn from South Africa. The average age for a real estate professional is 64, for this reason succession planning is imperative. 3.5 Technology Analysis Technological developments can put new demands on companies, or provide new possibilities for developing or improving market activities as well as products. Some jobs that exist today did not exist a decade ago. The Services SETA needs to identify those jobs that will become obsolete in the future as well as newly created technologically-based jobs that will be in demand. In the future employers will require fewer workers but they will need to have acquired multiple skills. It is projected that workers will be to rotate around different projects and managers will need to be skilled to guide projects, measure performance, encourage innovation, manage talent and communicate effectively. This presents new skills development challenges for the Services Sector. South Africa has a band width limitation. According to the latest Akamai State of the Internet report, South Africa ranks 80th worldwide for average internet connectivity speed at 2.1 Mbps. An additional challenge is that South Africa has low literacy levels and user sophistication limitations. As a result computer literacy and social media skills is in high demand. This is in corroboration with the 2013 focus group sessions and survey. Social media is a collective term used to describe a variety of online platforms that allow users to interact, create and share online content. Sites like Facebook, Google +, Twitter, YouTube, LinkedIn, MySpace as well as millions of blogs and forums have been used to market businesses. Facebook has more than 900 million active users and Twitter has almost 300 million. development in terms of training on the different social media platforms should be included in in the short term. The Services SETA had identified the impact of technology within some of the sub-sectors as follows: Services SETA Sector Plan 2014/

56 Real Estate Services: Knowledge of social media and virtual spaces skills (IT) were critical especially for the online marketing of properties and virtual tours. Marketing and Communication Services: An increase in digital marketing and the use of social media platforms would become more prevalent within the next five years. Business Services: Employer s wanted to develop skills and resources to better understand changes in technology, in particular with regards to social media and online marketing. Hiring Services: Technological advancements in the operation of machinery create the demand for continuous training and up skilling. Postal Services: There is an increased usage of as an alternative to sending hard copies. As the internet becomes available on a wider scale, people are using it as alternative to acquire information. 3.6 Environmental Analysis The primary purpose of green occupations is to reduce the negative environmental impact and contribute to environmental, economic and social sustainability. Green occupations are related to national initiatives that require a shift in its focus to contribute to processes, systems and activities related to: Developing and adopting renewable sources of energy Reducing the consumption of energy, fossil fuels and raw materials Enhancing energy and resource efficiency Reducing greenhouse gas emissions Decreasing waste and pollution Recycling materials Preventing the loss of biodiversity and restore ecosystems The Department of Environmental Affairs (DEA) compiled the Environmental Sector Plan for South Africa in According to the DEA, macro-economic trends such as the Green Policy Paper, which strives to install 5 million solar power panels by 2020, creates a demand for skilled resources, training and development and environmental enterprises development. The 2015 target in the national waste management strategy is that new jobs would have been created in the waste sector and additional SMMEs and cooperatives would be participating in waste services delivery and recycling. Goods and Services marketed currently contribute between 1% and 1.6% of the country s GDP. This has been identified as one of the projected growth areas in the next few years as it drives the need for environmental skills. This presents new economic development possibilities, influencing the skills demand associated with greening the economy. The Services SETA has identified Cleaners and Hairdressers as jobs that contribute to the green economy through the use and disposal of chemical products and the demand on environmentally friendly products. The Services sector also forms part of the value chain of the green economy by assisting with business, project management, marketing and sales skills and will support green initiatives by offering these skills through partnerships. The Services SETA had identified the environmental impact of businesses within some of the subsectors as follows: Services SETA Sector Plan 2014/

57 Cleaning Services: Increased commitment to green cleaning by using cleaning methods and products that are environmentally friendly and instituting a proper waste management system. Real Estate Services: Building green is an opportunity to use available resources, energy efficient power supplies and address climate change while creating healthier environments for people and communities. Beauty Treatment: Consumers are becoming aware of the ingredients of skin care products and are conscious of chemicals and products tested on animals. 3.7 Legislative Analysis In his National Budget Speech (February 2013), the Minister of Finance recognised economic competitiveness as central to growth and the creation of jobs. The country s high rate of unemployment led to various initiatives in an effort to stimulate job creation, namely: A revised youth employment incentive Funding for the Special Economic Zones (SEZ) Programme Continued simplification of the tax requirements for small, medium and micro-enterprises (SMME) R827 billion budgeted for various infrastructure projects over the next three years The Industrial Policy Action Plan (IPAP) 2013/2014 Other important developments enhancing skills development and directly impacting on the operations of the Services SETA are: The Quality Council for Trades and Occupations (QCTO): Various policies have been developed around implementation of the QCTO, including Development Quality Partners (DQPs), Assessment Quality Partners (AQPs) and curriculum and assessment which will have an implication on Services SETA planning. BBBEE codes: The revised BBBEE codes were released in October 2012 for public comment and include a key provision to revise the skills development element, increasing the weighting from 15% to 20%. Grant Regulations: The new Grant Regulations were released on 3 December The main purpose of the regulations is to improve the focus, management and effectiveness of SETA grant spending. The regulation limits spending on administration to 10.5% with a maximum of 0.5% allocated to the QCTO for the roll out of PIVOTAL programmes. It reduces the allocation from 50% to a maximum of 20% for mandatory grants to qualifying levy paying employers. At least 80% of the discretionary grants are to be spent on programmes that address scarce and critical skills needs for the sector. The remaining 20% is for interventions designed to implement the SSP. Implementation was effective from 1 April The Green Paper for Post-School Education and Training: The Green Paper was released in April It focused on improving the quality of the FET colleges by developing appropriate programmes; upgrading lecturer qualifications; capacity building for management and governance; improved learner support; utilising appropriate information technology systems for learning and management; and building strong partnerships between colleges and employers in the public and private sectors. The Services SETA is currently forging strategic partnership with 12 FET Colleges, as one of its strategic focus areas, aimed at ensuring improved access to quality learning programmes, increased relevance of skills development interventions and building strong partnerships between stakeholders and social partners. Services SETA Sector Plan 2014/

58 The following are brief overviews of macro policies and strategies that impact on the Services SETA. Medium Term Strategic Framework This framework has been developed for a South African context from the UN Millennium Development Goals, and will guide resource allocation in the coming decades. Some specific focal areas of relevance to the Services SETA include: strengthening competitiveness and promotion of SMEs and co-operatives; developing Rural FET colleges; ensuring that training and skills development initiatives in the country respond to the requirements of the economy, rural development challenges and social integration; identifying core priorities, within which are important catalytic interventions aimed both at cushioning the country from the current global economic crisis and laying the foundation for movement onto a higher trajectory of growth and development; identifying knowledge-intensive activities that build on South Africa s strengths as the basis for long-run prosperity. New Growth Path (NGP) The NGP sets out the overarching government strategy for achieving inclusive growth through large scale employment creation. The goal is to create 5 million jobs over the next 10 years. The strategy aims to forge a consensus on the new opportunities within South Africa, across the continent and globally, and how these can be used to achieve socially desirable and sustainable outcomes. There is focus on exports, to the region and other growing economies, of South African goods and services. Inclusive growth will be achieved through: public investment in infrastructure - in construction, operation and maintenance as well as the production of inputs; labour-absorbing activities across the main economic sectors the agricultural and mining value chains, manufacturing and services; opportunities in the knowledge and green industries; leveraging social capital in the social economy and public services; rural development and regional integration. In all areas of the economy, small business expansion plays a significant role. Services SETA s response would be to identify: large infrastructure projects where sector industry players were involved and assist in finding development and employment potential; where employment creation is possible, including along the value chains in the services sector; potential for small business expansion, rural development opportunities and areas of the economy where the services sector can contribute to green industry and environmentally friendly production processes. This will be discussed further in the SIP section. The National Industrial Policy Framework (NIPF) and Industrial Policy Action Plan (IPAP) The framework and plan set out the goals and policies that will be used to expand industrial development and bring about growth. IPAPII sets out seven sets of critical policies: stronger articulation between macro and micro economic policies; industrial financing; leveraging public and private procurement, including alignment of BBBEE and industrial development initiatives; trade policies including tariffs and measures such as SQAM (standards, quality assurance and metrology); competition and regulation to lower costs for investments and poor households; skills and innovation policies. The Plan puts in place a number of macro-economic measures which include trade balance, lowering of inflation and competition increases in a range of sectors etc. IPAPII identifies three priority clusters: New areas of focus: metal fabrication; capital and transport equipment sectors, particularly arising from large public investments; green and energy-saving industries and agroprocessing. Services SETA Sector Plan 2014/

59 Scale up and broaden interventions in existing IPAP sectors: automotive, components, medium and heavy commercial vehicles, plastics, pharmaceuticals and chemicals, clothing, textiles, footwear and leather biofuels, forestry, paper, pulp and furniture, strengthening linkages between cultural industries, and tourism and business process servicing. Sectors with potential for long-term advanced capabilities: nuclear, advanced materials and aerospace. The review of IPAPII highlights the role of the Services Sector to include: small business development; linking the services sector and other industrial sectors where growth is being planned; and the growth of South African services throughout Africa and abroad. From a Services SETA perspective IPAPII requires assistance with skills development during the expansion phase. Services SETA is currently engaged in the DTI-Monyetla Project, which involves training contact centre personnel. The key lessons learned will be used to inform future projects of a similar nature. The biggest challenge facing Services SETA is its engagement with the broader services sector and that includes ICT and financial services, utilities, public services and tourism, and their relevant SETAs. This way forward should be coordinated by IPAPII. The Services SETA will engage with the DTI and DHET to consider the collation of a coherent services sector development strategy that defines the roles of the various SETAs and addresses some of the interface issues that will also impact on IPAP implementation. The National Accord The National Accord aims to empower South Africans to implement the accord s commitments by mobilising the private sector, organised labour, communities and government in a partnership to expand skills in order to create five million new jobs by The National Accord is one of the first outcomes of social dialogue between Government and social partners on the New Growth Path. The eight commitments are: 1. To expand training using existing facilities 2. To place interns 3. To set training ratios 4. To increase investment in training 5. To set annual targets for training in state-owned enterprises 6. To improve SETA governance and financial management 7. To align training to the NGP and improve SSPs 8. To improve FET College performance The Services SETA Strategic Plan is already aligned to a number of these commitments such as internship placements, the improvement of SETA governance and financial management, aligning training to the NGP and improving SSPs. Youth Employment Accord The Youth Employment Accord was signed on 18 April 2013 to address youth unemployment in the country by expanding employment opportunities and empowering youth in the economy. Some of the strategies include: Job creation Training, internship, apprenticeship and private sector commitments Services SETA Sector Plan 2014/

60 Youth Brigades who would serve communities and in turn provide work experience and training The Services SETA seeks to supports the Youth Employment Accord with training interventions. Human Resource Development Strategy (HRDSSA) This is a broader legislative framework which guides the Services SETA in their Strategic Plan programmes. The strategy aims to enhance employee skills and knowledge to increase productivity and in turn support economic and social development. The HRDSSA intends to contribute to the following national goals: To reduce the poverty and unemployment To provide skills and knowledge to the workforce and enable transformation To improve national economic growth through competitiveness of the South African economy Rural Development and Land Reform The strategy of the Department of Rural Development and Land Reform is to bring about agrarian transformation which is a rapid and fundamental change in the relations (systems and patterns of ownership and control) of land, livestock, cropping and community. The strategy focusses on building communities, strategic investment in old and new infrastructure and the land reform programme. Different regions have different characteristics such as the tenure of the land, availability of water, proximity to markets, and migration, settlement patterns and local legislation. For this reason it is necessary to develop local strategies rather than a broad-based implementation plan. By 2014 it is anticipated that 160 local areas will be targeted. The Services SETA s response would include stakeholder engagement with employers in each of these regions. The Services SETA can assist, alongside other SETAs by building supply chains for rural economic growth. Through working with FET Colleges located in rural areas, the Services SETA could assist with skills development specific to area requirements. Key industries that have been identified to open job opportunities for the youth in these rural districts are Hairdressing, Funeral Services, Cleaning and Gardening maintenance, Project Management and Business Administration Services. In order to maximize the impact to rural development interventions, the Services SETA has selected six rural, economically underdeveloped districts to support as part of the rural development strategy. The districts are: Vhembe District, Limpopo umkhanyakude District, KZN O.R Tambo and Alfred Nzo District, Eastern Cape Thabo Mofutsanyane District, Free State Gert Sibande District, Mpumalanga Strategic Integrated Projects (SIPs) Services SETA Sector Plan 2014/

61 In 2012 Government adopted an infrastructure project that was intended to transform the economic landscape by creating a numbers of new jobs, strengthening the delivery of basic services, and supporting the integration of African economies. Headed by the Presidential Infrastructure Coordination Commission, plans culminated in 18 SIPs that have been developed and approved to support economic development and address service delivery in the poorest provinces. An amount of about R 850 billion is being committed to these SIPs over a period of three years. The SIPs cover a range of economic and social infrastructure projects in all nine provinces, with an emphasis on poorer provinces. Table12 summaries the SIPs. Table 12: SIPs Categories SIPS Categories SIPS Regions GEOGRAPHIC 1: Unlocking the northern mineral belt with Primary Mineral Reserves with Waterberg as the catalyst Mpumalanga, Limpopo, Richards Bay and Gauteng ENERGY SPATIAL SOCIAL INFRASTRUCTURE KNOWLEDGE REGIONAL 2: Durban-Free State-Gauteng logistics and industrial corridor 3: South-Eastern node and corridor development 4: Unlocking the economic opportunities in North West Province 5: Saldanha-Northern Cape development corridor 8: Green energy in support of the South African economy 9: Electricity generation to support socioeconomic development 10: Electricity transmission and distribution for all 6: Integrated municipal infrastructure project 7: Integrated urban space and public transport programme Durban s, Free State and Aerotropolis around OR Tambo International Airport Mzimvubu, Wild Coast Highway KwaZulu- Natal, Port Elizabeth Northern Cape, Eastern Cape Coega North West Province Saldanha and Northern Cape Across Provinces Power stations: Medupi, Kusile and Ingula Across Provinces Across Provinces to assist the 23 least resourced districts 12 largest urban centres and all the metros in South Africa 11: Agri-logistics and rural infrastructure Across Provinces 12: Revitalisation of public hospitals and other health facilities Across Provinces 13: National school build programme Across Provinces 14: Higher education infrastructure Across Provinces. Two new universities will be built - in Northern Cape and Mpumalanga 15: Expanding access to communication Across Provinces technology 16: SKA & Meerkat Africa and South Africa 17: Regional integration for African cooperation and development African economies ( South, Central and East Africa) and South African economy Services SETA Sector Plan 2014/

62 WATER AND SANITATION 18: Water and sanitation infrastructure Across Provinces The Services SETA has an integral role to play in terms of using the SIPs as a training platform. The nature of the Services SETA constituent industries is that they follow economic activity. As the SIPs are being implemented they will invariably interface with Project Management Services, Hiring Services, Labour Recruitment, Cleaning Services, Gardening Services, Collective Services such as dispute resolution and wage negotiation services, Business Services and Real Estate Services. While some of the Services SETA sub-sectors may only interface with the SIPs as service providers and not fully partake in the projects, the scale of these projects will require the Services SETA to carefully develop plans for coordinating skills development efforts and ensuring optimal impact. NSDS III NSDS III has been developed to coordinate the government s macro strategy and plans into a framework that enables skills planning. It focuses on transformation imperatives related to class, race, gender, geography, age and disability and HIV prevalence with an emphasis on skills development to support rural development. Whilst it does not set targets for Services SETA (as was the case with NSDSII) it requires Services SETA s to plan their work in a manner that is measurable in terms of outputs, outcomes and impact. NSDS III goals include: a credible institutional mechanism for skills planning; increasing access to occupationally-directed programmes; promoting the growth of a public FET college system to meet national and sector needs; addressing youth and adult language and numeracy skills; improved workplace-based skills development; supporting cooperatives, small enterprises, NGO and community training initiatives; increasing public sector capacity for improved service delivery and supporting the building of a developmental state; building career and vocational guidance; partnership approaches are emphasised, particularly between public education providers, SETAs and employers, and between public and private providers. Improving SETA functioning and performance is seen as a critical enabler. SETAs must become acknowledged as credible and authoritative on skills. Their goal is to create interventions and shape solutions that address skills needs within their sectors. SETAs and the QCTO work in partnership to monitor quality on the supply side, but it is envisaged that this role will shift to the QCTO in the long term. The focus for SETAs will increasingly become quality management and assisting providers of education and training to develop programmes that enable those graduating to be both qualified and competent to carry out the functions expected of them. 3.8 General challenges in the Services Sector The challenges facing the sub-sectors are diverse but common threads have emerged from the PESTEL analysis. Formalisation affects many industries within the Services Sector. Informal employers are at risk of their skills needs not being communicated to or catered for by the Services SETA. In addition there may be no agreed standards with regards to scope of occupations, work standards and ethics as well as education and training. In order for the sector to have a coherent and standardised framework of qualifications and training programmes as well as career development pathways it will be necessary for occupational and professional standards to be agreed for various work contexts of the sub-sectors. The Services SETA is committed to assisting the Hair Dressing, Cleaning, Beauty Treatments and Funeral Services sub-sectors to work towards professionalising their occupations in the long term. The limited professional statutory regulation or self-regulation that exists in the Services Sector affects businesses operation. Except for the Real Estate, Labour Recruitment and Contact Centre sub- Services SETA Sector Plan 2014/

63 sectors all other sub-sectors lack a strong enforcement and regulatory regime. As a result there is an absence of agreed standards in terms of: wage determinations, quality processes and systems, entry into the sector, quality management systems for how organisations in the sector should operate health safety and environmental standards, uncoordinated organised employer formations and minimal organised labour formations. Where professional bodies exist attention is also given to ethics and the setting of ethical standards, and this is often lacking in parts of the sector. The sector includes many SMEs and is open to high levels of job insecurity. Employers tend to rely on contract work from both the private sector and government which can be inconsistent and may lead to periods of forced staff retrenchment. These employers are vulnerable to economic changes and increased costs e.g. fuel, transport, equipment, products etc. This is particularly evident for Hair Care, Postal, Cleaning and the Hiring sub-sectors. There are few labour bodies representing the employees in the services related sub-sectors. However this is indicative of the Services Sector internationally. For example domestic workers are generally not in trade unions and private households would tend not to come together in an employer association. For different reasons some occupational groups, for example real estate agents and management consultants, would tend to regard themselves as professionals and turn to professional bodies to protect and advance their interests rather than trade unions. So whilst there are sub-sectors where there is some level of collective organisation (cleaning and contact centres) generally the situation is one of poor levels of unionisation. The Services SETA s role will be to help sub-sectors to identify and capacitate stakeholder structures around these issues. Stakeholders identify strict labour laws and interference from government as a negative factor in the growth and stability of the sector. There will be an on-going need for training in relation to labour law and changes in labour law as they occur. The use of technology has become an imperative especially with regard to competitiveness. This means that across the sub-sectors, Services Sector enterprises find that they have to invest in technology. These advancements have resulted in some job losses but also provide opportunities for growth. development planning will need to address both enabling existing employees to adapt to new methods and processes, and to position companies to increase their market share using technology to give them a competitive advantage. Through the sub-sector and chamber consultations, sub-sectors such as Hiring Services, Domestic and Household Services; Cleaning, Hair Care, Beauty Treatment, Funeral Services and Real Estate Services identified environmental health and safety as issues that more attention. Related issues include hygiene, the handling of dangerous chemicals and goods, waste management and innovative green solutions. General health and safety is reflected in the critical skill list and more specialised occupations such as Waste Manager and Pest Control Specialist is in the scarce skills list, this will be discussed in more detail in section 4. The Consumer Protection Act of 2011 has had a profound impact on how companies conduct its business. This Act applies to the supply of all goods and services (including importers, distributors, retailers and other role-players in the supply chain), as well as to the promotion and marketing of these goods and services. It regulates common business practices like advertising, marketing, contracts, standard terms and conditions, product labeling, promotional competitions, pricing policies, returns policies, franchises, business names, product liability and product safety. Businesses will have to take greater care when interacting with customers to ensure that transactions are fair, reasonable and honest. Companies not abiding by the CPA face penalties of a fine of up to 10% of turnover, or fines and a prison sentence of up to 10 years where an orders of the authorities are not complied with. Services SETA Sector Plan 2014/

64 3.9 Findings The Services Sector employers are largely concentrated in the Gauteng Province. Gauteng has 55.8% of service industry employers, followed by Western Cape with 13.8% and KwaZulu-Natal with 8.4%. The other provinces combined have less than 4% of service industry enterprises. This profile of the Services Sector indicates that services industries have not been able to make inroads into the rural economy. The services industry still operates within urban areas. Where there are enterprises within rural areas they tend to be micro informal operations. There may be a number of reasons for this. Consultations with stakeholders indicate that the lack of infrastructure and skills within rural areas are a deterrent for expansion. The rural development strategy will be of necessity and will include the expansion of services industries in rural areas. It is also important for the sector to maintain sustainability and identify opportunities for growth in urban areas given the population growth trends. The Services Sector has a substantial number of SMES, of the registered employers are small and micro businesses, medium and large. An analysis of all the sub-sectors indicates that there are a high number of single owner-operated and family-run businesses. The growth of SMEs has been identified in all the growth and development strategies of the country. The Draft National Development Plan Vision 2030 (November 2011) identifies business incubation for SMEs generally and the expansion of business services in particular as priority actions for growth and development. As the services sector is substantially comprised of small enterprises, the priority is growth opportunities for sustainability in the SMME environment. A general trend in small businesses throughout the sector is multiple skills needed for owners which include entrepreneurial skills, human resources, and finance for non-financial managers, project management and basic business management skills. Services SETA Sector Plan 2014/

65 Section 4: SCARCE AND CRITICAL SKILLS IDENTIFICATION According to the International Labour Organisation, by 2020 over 500 million new jobs need to be created worldwide to provide for the labour market. The biggest challenge to economic growth has been finding workers with the necessary skills and training to fill positions. The European Centre for the Development of Vocational Training projects predict that demand for highly-qualified people will increase by 16 million between now and 2020, while demand for low-skilled workers will decrease by around 12 million. The European Commission estimates that by 2015 there will be a shortfall of up to information and communications technology (ICT) professionals across Europe alone. The skills gap is especially acute in emerging countries like Africa and the Middle East with youth unemployment rates ranging from 11% to almost 28%. 4.1 Purpose The purpose of this section is to compile a list of scarce and critical skills for the services sector. A mixed method study was used to update and improve on the scarce and critical skills list in order for the Services SETA to better respond to the skills demands of employers. This is explained in section one. The use of multiple research methods enables the Services SETA to triangulate findings and validate research evidence Definitions of scarce and critical skills The adopted definition of scarce and critical skills, from the Department of Labour, SETAs and the NSA in 2005, is: Scarce skill refers to the inability to find suitably qualified and experienced people to fill occupational vacancies either at an absolute level of scarcity (no suitable people available) or at a relative level of scarcity (no suitable equity candidates available); while Critical skill refers to the inability of people to perform to the level of occupational competence due to gaps in their skills profiles The scarce and critical skill questions and answers from the questionnaire were analysed to supplement the list. A process of validation took place in October with Association bodies in order to validate the scarce skills list. This was based on the recommendations of the Services Cluster peer review. After this verification, there was further consultation with the Chamber Managers. The methodology used formed part of the best practice from W&RSETA and TETA where all occupations considered for the scarce skills list were evaluated by stakeholders according to 6 criteria in section one. 4.2 Factors influencing demand The scope of the Services Sector attributes itself to many diverse factors influencing demand for skills. Because of this it is not possible to generalise supply and demand across the sector. These diverse factors are articulated in table 13. Services SETA Sector Plan 2014/

66 Table 13: Factors influencing labour supply and demand per sub-sector Sub-sector Hiring Services Household Services Factors influencing labour supply and demand Capital outlay and cost of machinery Consistent technology upgrades Fluctuating market needs Safety regulations Increased demand due to expanding middle class Tourism Domestic services Cleaning Services Marketing and Communication Contact Centres Postal Services Labour Recruitment Services Collective Services Business Service Project Management Hair Care Beauty Treatment Funeral Services Many workers with elementary skills Increased demand for outsourced cleaning services Increased demand for specialised cleaning services e.g. mould remediation, floor care, window washing, trauma cleaning Demand for supervisory level skills, cleaning machine technicians and waste management Many workers with elementary skills Success dependent of skills development Decline in experienced senior staff development in social media, online marketing and mobile marketing Low level of skilled applicants International competition for business process outsourcing activities Decline in demand due to and other technologies Amendment to the Employment Services Bill which is affecting Temporary Employment services (TES) Advanced professional skills Price sensitive Demand fluctuates with economic period Social service delivery Large scale and large budget infrastructure development Growth in black middle class and appreciation for ethnic aesthetics Tourism Increase in the number of franchises Increasing middle class Skilled undertakers Formalising the industry Increasing mortality rate Services SETA Sector Plan 2014/

67 Fashion Real Estate Services Source: Focus groups (47) Cyclical South Africa becoming a destination of choice for film production Property demand and development dependant on favourable economic conditions Regulation of qualification for estate agents Regulation of Property Valuers 4.3 Scarce Demand The Services SETA has identified a preliminary list of scarce skills. The numbers are estimates and the total number will require further research. For scarce skills stemming from in-depth interviews and focus group discussions, the magnitude is not listed and further research is in order to quantify the need in the industries. For this SSP update, the Services SETA has included green occupations, critical green skills and listed trades as per the OFO version Scarcity can be seen as a function of the following: Anticipated demand for skills based on economic performance Sector morbidity rate Specialist technological skills Workforce age and anticipated retirement rate General health and wellbeing of workforce Job migration and growth The skills pipeline from the skills development system Attention has been given to address scarce and critical skills through relevant programmes, including work integrated learning. The Grant Regulations (03 December 2012, Gazette Number 35940) require a SETA to allocate 80% of its available discretionary funding to PIVOTAL programmes that address scarce and critical skills of its sector. PIVOTAL programmes were first introduced in NSDS III. They are those programmes which result in qualifications or part qualifications on the National Qualifications Framework (NQF). The scarce and critical skills outlined in the chapter are considered in relation to PIVOTAL programmes. The symbols are as follow: Trade Critical green skills An occupation where a qualified person applies a high level of practical skills supported and re-enforced by underpinning and applied knowledge to: Manufacture, produce, service, install or maintain tangible goods, products or equipment in an engineering and/or technical work environment (excluding process controllers and operators). Use tools and equipment to perform of his/her duties. Measure and do fault finding on process, manufacturing, production and/or technical machinery and equipment to apply corrective or repair actions. Apply and adhere to all relevant health, safety and environmental legislation. Has an accumulative learning period covering knowledge, practical and workplace learning that is equivalent to three or more years. Occupations requiring additional Critical Green are those that require a shift in its focus to contribute to processes, systems and activities related to the : Development and adoption of renewable sources of energy Reduction of consumption of energy, fossil fuels and raw materials Services SETA Sector Plan 2014/

68 Enhancing energy and resource efficiency Reducing greenhouse gas emissions Decreasing of waste and pollution Recycling of materials Preventing the loss of biodiversity and restore ecosystems Green occupations Green occupations have as their direct purpose the nationally identified priorities and initiatives of reducing negative environmental impact and contribute sustainably to environmental, economic and social sensitive enterprises and economies. The table below projects the magnitude of needed skills and has been calculated conservatively. For the purposes of this SSP, projections were based on the Unallocated for all sub-sectors. The idea was to maximise and allocate all the sub-sectors assuming that 2014/15 will be over the trend (Database 2013). Project Management, Fashion, Business Services and Postal Services are excluded as there were no participants; hence they have not been validated or colour-coded. For the validation exercise, colourcoding was done to illustrate skills needed as a high, medium or low priority. Table 14: Scarce skills list OFO Scarce skills code Beauty Treatment Strategic planning Occupation Nails Nail Technician Somatology Somatologist Massages Business Services Strategic planning Planning and organising Negotiation IT Monitoring and evaluation Entrepreneurial /Business skills Programme or Project management Magnitude for 2014/2015 Interventions NQF level Institution s Manager 90 Bursary: Degree 7 HET Massage Therapist Bursary: 4 Bursary: National certificate Bursary: National certificate FET/Uot, HET 4 FET 4 FET Economist Bursary: Degree 7 HET Project Co-ordinator/ Administration Business Consultant Learnership 5 FET 186 programme Training provider M&E Manager 372 Bursary: Degree 8 HET ICT Systems Coordinator Small Business Managers Programme or Project Manager Bursary: Diploma 5 FET Learnership 5 FET (NVC) Programme Bursary: Degree 6 HET Services SETA Sector Plan 2014/

69 Risk management and development Contracting skills Financial Planning Organisational risk management and development manager Contract Manager Financial Planner Market research Contact Centre African language Management Trainer Cleaning Services Project Management 5151 Supervision No specific OFO code No specific OFO code Chemical/Produ ct Waste Management Chemical Mixing High Level Rope Access Cleaning Machine Technical Assistance Health and Safety Health and Hygiene Cleaning Industrial Machinery Mechanic Contact centre salesperson Contact centre manager/ workforce manager Occupational instructor/ trainer Project Managers Cleaning Supervisor/Team Leader Waste Manager Pest Control Specialist Work at Height Cleaners Cleaning Machine Technicians Health and safety officer/supervisor/ practitioner Health and Hygiene Cleaners Industrial machinery mechanic To be confirmed To be confirmed TBC Bursary: Degree 7 HET Bursary: Diploma Bursary: Diploma 5 UoT 5 UoT Bursary: Degree 7 HET Programme Qualification in Development programme Bursary: National Certificate Bursary: National Certificate Learnership 4 Bursary: National Certificate Bursary: Diploma Qualification in Development No unit standards exist Bursary: National Certificate Qualification in Development HET/FET/ Private training providers FET / /Private training providers Training Provider HET/FET/ Private training providers 5-6 HET/ UoT 4 Qualificatio n in Developme nt None FET/Privat e Provider Qualificatio n in Developme nt To be confirmed Artisan Trade Trade Services SETA Sector Plan 2014/

70 Collective Services Business Advising Policy Policy analyst Quality systems Economic research and analysis Domestic Services General Management Social services First aid Frail Care Events Management Business analyst 178 Bursary: Degree 7 HET Quality systems manager Economist Corporate General Manager Social services manager Domestic workers Frail care Practitioners Event Planner Event manager Graphic Designer Decoration Carpenter Fashion Exhibition / Display Designer Stage Scenery Designer Carpenter Designing Designers Funeral Services Bursary: Degree 7 HET Bursary: Degree 7 HET Bursary: Degree 8 HET Bursary: Degree 6 and 7 HET/ FET Bursary: Degree 8 and above HET Bursary: National Certificate Programme Qualification in Development Learnership Bursary: Diploma FET/Privat e Provider Private Training Provider Training provider 5 UoT 552 Bursary: Degree 6 HET Embalming Embalmer 910 tbc programmes Artisan TBC Trade test Training provider Accredited trade testing centres Mortuary attending/cleaning Operator Household Services Garden maintenance Mortuary attendant Crematorium Operator Garden maintenance worker Qualification in Development Bursary: National Certificate Qualification in Development 4 FET/UoT, HET FET / Private training providers Services SETA Sector Plan 2014/

71 Hair Care Hiring Services Hairdresser-afro Hair specialisation Mechanic Plant Operations Hiring Operations Hairdressers and barbers Diesel mechanic Earthmoving plant operator Hiring Operations Manager Boiler maker Boiler maker Interior Designing Upholstering Tailoring Handicrafts Carpentry Labour Recruitment Recruitment and Marketing Upholsterer Tailor Textile, Leather and related materials Handicraft workers Carpenter Cabinet maker Recruitment Consultant Marketing and Communication Services 888 Artisan Bursary: National Certificate /Artisan Bursary: National Certificate 2-4 and trade test Learnership 4 Bursary: Diploma 2-4 Artisan 4 Artisan 4 Bursary: National Certificate Artisan 4 Artisan 4 programmes 4 FET or private provider Private training providers Private training providers HET/FET/ Private training providers Training provider Editing Editors 470 TBC ing Sales skill 2641 Writing Writers Market research/ analyst Advertising specialist Writing Copywriter Graphics Communication Marketing / Communication Graphic designers Communications coordinator Marketing / Communication Strategist 188 Bursary: Degree 7 HET programme TBC TBC TBC TBC TBC Services SETA Sector Plan 2014/

72 Postal Services Postal branch manager Project Management Management consulting Project management Real Estate and Related Services Postal branch manager Financial managers Internal Auditors Management consultant Programme or Projects Administrator TBC TBC TBC Bursary: National Certificate Bursary: National Certificate 5 FET, UoT 4 FET, Private Training Provider Auctioneering Auctioneers 176 Internship Property valuator Sales and marketing Arranging real estate transactions Sectional title Specialist Rental Management Property Valuer 880 Bursary: Degree 7 Sales and marketing manager Property managers Property portfolio officer Facilities manager Real Estate agent Property Leasing Manager programme Qualification in development TBC Qualification in development Qualification in development Qualification in development The following occupations were removed from the scarce skill list after the validation exercise. Table 15: Occupations removed after validation exercise OFO code Scarce skills Occupation Interventions NQF level Institutions Events Management Events Management: Fitter and Turner Hiring Services Fitter and Turner Formal qualification of FETC 4 FET Welding Welder Artisan 3 FET / Training providers Professional Drivers-Hire Car Driver Chauffeur No unit standards exist unknown No accredited training providers for this qualifications Services SETA Sector Plan 2014/

73 Interior Design Real Estate Services Project management Interior Design Painting Construction hiring equipment - Project Manager Painter Diploma 3 to 6 Formal qualification of FETC Real estate agents Real Estate agent Learnership 5 Beauty Treatment Cosmetics Cosmetologist Formal qualification of FETC Marketing and Communication Services Sector specific 3322 sales Sales representatives Tbc representative Web design Web designers Tbc Credit Credit analyst Tbc Funeral Services Grief Counselling Business Services 121, 1219 Preparation/makeup of dead bodies Finance for non- Financial Managers Bereavement Councillor / funeral director /Undertaker/mortician Mortician Business Services and Administration Managers Finance Bookkeeper Fundraising Manager Project Management Computer network and systems Computer Network and systems engineering programme critical skills not scarce skill FET Qualification *Mortician was combined with Mortuary by Chamber Manager Bursary: Diploma *Moved to critical skill list Bursary: Diploma *Moved to critical skill list Tbc*Moved to critical skill list 4 HET/FET/ Private training providers 4 FET programme Training provider (private and public) 4 FET/ UoT 6 FET,HET and UoT 6 UoT Diploma 6 UoT Services SETA Sector Plan 2014/

74 Rural development expert Rural Development Expert Critical skill not scarce Historically, the Services SETA s scarce skills list was formulated from WSP submissions. The challenges encountered with the formulation of the list included: Manual capturing of the WSP templates led to questions of data integrity The recent introduction of OFO and minimal training to employers could lead to incorrect OFO codes used The submissions between 2009 and 2012 are inconsistent; WSPs submitted at times reflect the needs of employers clients, instead of their own company s needs. This results in an analysis of WSPs producing a scarce skills list that includes occupations in mining, manufacturing and health. Given the nature of these challenges scarce skills could only be conducted at a high level without going into lower levels of detail at occupation level. The table below represents the organisation of scarce skills according to OFO major occupation groups. The table forecasts skills demand based on economic circumstances, taking into account South Africa s growth targets. Growth is an important proxy in the Services SETA context because the demand for services in most sub-sectors is somewhat linked to the growth of the economy. Whereas each sub-sector has its unique circumstances and elasticity of demand and supply of skills, it is likely to vary. These forecasts are at macro level and only based on one variable. Moreover, the analysis is based on WSP submissions which represent a fraction of the sector employers. The scenario presented below is conservative in nature and assumes that economic growth remains at the 2011 rates for the next four years. OFO Major Group Required 2012/13 Required 2013/14 Required 2014/15 Required 2015/16 Managers Professionals Technicians and Trades Workers Community and Personal Service Workers Clerical and Administrative Workers Sales Workers Machinery Operators and Drivers Elementary Workers In the next scenario, world economy experiences a double dip recession but South Africa is only able to sustain a 1% economic growth rate. At this rate some skills are still. After the recession, the GDP grows gradually. OFO Major Group Required 2012/13 Required 2013/14 Required 2014/15 Required 2015/16 Managers Professionals Technicians and Trades Workers Community and Personal Service Workers Clerical and Administrative Workers Services SETA Sector Plan 2014/

75 Sales Workers Machinery Operators and Drivers Elementary Workers The last scenario assumes that government policies pick up speed and are able to support the country s target growth rate of 6% and this is sustained over the period of four years. It is further assumed that demand for skills follow the growth rate percentage. OFO Major Group Required Required Required Required 2012/ / / /16 Managers Professionals Technicians and Trades Workers Community and Personal Service Workers Clerical and Administrative Workers Sales Workers Machinery Operators and Drivers Elementary Workers Trends Analysis for Scarce The magnitude of scarce skills and projections at the Services SETA were not captured adequately prior to It is therefore difficult to conduct a credible trend analysis for the Services SETA. For the trends analysis requirement of the DHET, the Services SETA attempted to evaluate SSP s from as far back as From the 2010 SSP update, it appeared that in some instances, all occupations applicable to a sub-sector were listed as scarce. In 2010 and 2011, the scarce skills data was not sorted and clustered into categories of a few sub-sectors, making it difficult to compare individual subsectors to The re-organisation and reduction from ten chambers to six chambers further contributed to the challenge of the trends analysis. However some conclusions that can be derived are: From 2013 scarce skills list we can determine that most companies are requiring higher level skills and occupations. This could be a result of business growth. From 2010 to 2012 business occupations in demand were business managers, remuneration managers and payroll managers, as well as administrators and receptionist. In 2013 the occupations most in demand were market analyst, risk managers, monitoring and evaluations managers, project co-ordinators/managers, administration managers, fund raisers and economists. Contact Centre Managers have been on the Services SETA scarce skills list from 2011 to Bilingual (African languages) call centre agents were in demand in The Beauty sub-sector has seen decreased demand for specialist occupations. This may be a result of demand being met and industry growth. This can be triangulated with the growth of Services SETA Beauty Treatment employer which increased by 16 employers in the last year. Some occupations which still remain on the scarce skill list include nail technicians, cosmetologists and massage therapists. Services SETA Sector Plan 2014/

76 The scarce skills list in Cleaning Services changes annually, in 2010 cleaning service manager was listed; in 2011, healthcare, window, domestic and commercial cleaners we listed; and in 2013 chemical mixers (pest controller), cleaning machine technicians, health and hygiene cleaner. Work at height cleaners has consistently been on the list since In Collective Services, the occupation Economist has been on the scarce skills list since Event Management Services has seen a need for event managers since 2011 and fitters and turners since In the Market and Communication Services, market researcher and communications coordinator have been on the list for two years. Funeral Services has embalmers since 2010 and morticians since Afro hairdressing has been a scarce skill in Hair Care Services for the past two years. Hiring Services has had earthmoving plant operator on the list for the previous three years. Finally Recruitment Services has identified recruitment consultant as a scarce occupation since Critical skills The SETA s labour market forecasting initiatives, linked to the HSRC project, will, in future enable more sound estimates and projections for critical skills. In order for the Services SETA to be able to plan appropriately to meet the demand of critical skills, a sound understanding of the extent of critical skills needs as well as the extent of skills development interventions is. Services SETA will need to define these critical skills in more detail and develop and improve programmes to meet the sub-sector needs. Table 16 has the list of 76 critical skills of which skills programmes are most applicable to the Services SETA. Table 16: Critical list OFO code Beauty Treatment Critical skill Health, safety and hygiene Professional Conduct (Time management etc.) Business Services Finance for non- 121, 1219 Financial Managers Specialisation/ occupation Skin Care Therapist Magnitude for 2014/2015 Skin Care Therapist Business Services and Administration Managers Finance Bookkeeper Intervention s NQF level programme 4 programme Bursary: Diploma 6 Bursary: Diploma Fundraising Fundraising Manager 279 TBC Proposal writing Business skills, plan and writing skills Communication - office Admin Problem solving skills Small Business Manager Small Business Manager Secretary 930 Business Consultant programme programme 5 programme 4 programme 5 Institutions FET or private provider FET or Private provider HET and UoT HET FET FET FET FET or HET Services SETA Sector Plan 2014/

77 1121 Leadership Understanding of PPPFM BBBEE Compliance Cleaning Services No specific OFO Code Computer Literacy Occupational Health and Safety Frail Care Practitioners Cleaning at Heights Operators of Machines Recycling (refilling containers, toilet paper) Technology, computers, gadgets Managing Directors and Chief Executives Risk Compliance Manager Administrative Assistant Business Support Coordinator Safety and Health officer/practitioner Care Givers 930 Cleaning Supervisors Dry Cleaning Machine Operators Material Recycler 186 Line/Operation managers supervisor Supervisors No specific OFO Code 2263 Crime scene/trauma cleaning Sanitation and hygiene maintenance Contact Centre Graphic designer skills BPO 1121 Leadership crime scene cleaners Environmental and Occupational Health and Hygiene Professionals Graphic designers Managing Directors and Chief Executives Accent training Contact Centre Agent negotiation skills Contact Centre Agent programme 6 programme programme programme programme 4 4 Bursary: Diploma 2-3, 5-6 Qualification under Development Qualification under Development No unit standard No unit standard Bursary: Diploma 3 Learnership Learnership Bursary: National Certificate TBC TBC TBC TBC FET FET or learnership FET / Private training providers FET / Private training providers FET / Private training providers Not known Not known UoT/ Private Training providers FET / Private Training providers Private provider FET / Private training providers Services SETA Sector Plan 2014/

78 African language Contact Centre Agent Supervisory skills Operations management skills Coaching and training labour law Domestic Services Contact Centre Supervisor Contact Centre Workforce Manager Cooking Domestic Workers Early childhood development Domestic Workers Chemicals Pest Controllers Home based care Domestic Workers 930 Fashion Make up application Etiquette Models Wardrobe 5241 arrangement Designing accessories using technology Funeral Services Grief Counselling Cleaning Marketing and sales Occupational health and safety Make-up Artist Fashion Stylist Fashion Designer Bereavement Councillor / funeral director /Undertaker/mortician Mortuary Technician / Assistant Funeral Director Occupational Instructor / Trainer Social marketing Funeral Director No code Training in counselling Transporting bodies - advanced Funeral Practitioner 273 Mortuary drivers TBC Programme 5 Programme Internship programme programme Bursary: Diploma 3-8 Qualification under development programme 2 programme programme programme 5 programme progr amme programme 2 programme 4 programme 3 programme programme programme FET / Private training providers FET / Private training providers HET/ FET FET or Private provider Private provider Private provider FET Training provider FET or Private provider FET or Private provider FET or Private provider FET or private provider FET or private provider FET or private Services SETA Sector Plan 2014/

79 driving Planning and management skills Funeral director Hearse drivers Drivers 455 programme programme Household Services Chemicals Pest Controllers 1045 Bursary: National Certificate Home based care Care practitioners 160 TBC Chemicals pest control TBC Hair care Product knowledge Health and safety, hygiene and handling of hazardous material Hiring Services Specialised Plant Driving Techniques Plant hire operators Interior Design Practical experience for lecturers at universities of technology Labour Recruitment General business management and recruitment Hairdressers Hair Salon Assistant Crane Drivers Excavators and graders Lecturers Recruitment managers Presentation skills Recruitment manager Public Relations Public Relations Interview Techniques Recruitment Consultant Programme programme Bursary: National Certificate Bursary: Diploma Qualification under development Programme and 5 programme 5 programme programme programme Marketing and Communications 4111 ing General Office Clerks 288 TBC Graphic Design Graphic designers 192 TBC Photography Photographer 288 TBC Networking Writing and editing skills Presentation skills Marketing Executive 480 TBC Programme Programme provider private provider HET/ FET Workplace training FET or Private provider FET / Private training providers FET FET FET FET Services SETA Sector Plan 2014/

80 Understanding of communication strategies Stakeholder management, Measurement of ROI of communication Grammatical and assessment instrument design skills Green practices public relations Software development and maintenance Product and service offering knowledge FAIS and FICA accreditation Postal Services Customer Services Quality management Operations management Project Management Administration skills Business writing skills Payroll administration skills Postal Frontline Service Worker 89 Admin Personnel 445 Administrator 712 Project manager Payroll Clerk Project scheduling Project manager Project planning Project manager Real Estate Services Virtual Space skills: computer technology, photos, internet skills, Databases Analytics Portfolio skills Social media skills Planning for auction events Admin personnel and Real Estate Agent Property Portfolio Officer Estate Agents Event Planner Programme 6 Programme Programme Programme Programme 5 Internship Programme TBC TBC skills programme programme programme 4 Programme Programme Programme TBC TBC Programme 5 4 FET FET Services SETA Sector Plan 2014/

81 The following table presents a list of identified critical skills that cut across all the sectors. Table 17: Cross-cutting critical skills Critical needs common across the services sector General management skills (Short term planning, strategic planning, business and proposal writing) Administration skills Professional Etiquette Communication and interpersonal skills Computer literacy Customer services Bookkeeping and basic financial management General Business Health, safety, and environmental management skills Human resource management and labour relations HIV/AIDS in the workplace Problem solving skills Project management Relationship Management Planning, Sourcing and Procurement Sales and marketing Secretarial skills skills Supervisory skills Social network training Time management Marketing Contract management Basic business principles Source: Services SETA Focus groups with stakeholders February April Limitations in relation to this section Supply and demand, specifically in the Services SETA sector, is made complex by the diversity of the sector. The process of identifying scarce and critical skills requires substantial data and analysis. One of the data sources is the WSP. Unfortunately WSPs have become, in many cases, a formality. The Services SETA reviews, quality assures and verifies the content of WSPs received, but currently does not audit WSPs and ATRs. The DHET is in the process of developing an institutional mechanism as part of the national effort to develop an instrument for skills planning. It is anticipated that the projections from the skills planning system will enable better allocation of resources and sound planning of skills supply. Scarce and critical skills lists, including the projection of numbers and scenarios, must for the purpose of this SSP be regarded as a continuous work in progress; further research is planned for These lists will inform the allocation of Services SETA discretionary funds. Scarce skills lists and forecasts will inform decisions on the learnerships, internships and bursaries that the Services SETA will make Services SETA Sector Plan 2014/

82 available. The critical skills list will inform the development of skills programmes and their funding. As such the list must be well informed and reliable. The current list will be adequate to inform the immediate work of the Services SETA during the next period. This section of the SSP is the beginning of the process of developing, what is regarded as, a key enabler to Services SETA effectiveness. The two data sources, from Services SETA programme implementation are Annual Training Reports and learner data captured on the Services SETA database. Whilst the data is extensive, it has not been captured correctly to assess demand. There is also evidence that the uptake of SETA grants is not necessarily based on genuine demand. The Services SETA must structure grants to meet the real demands of the sector. Programme implementation must be planned with data requirements in mind so that monitoring reports are regular and accurate in relation to Services SETA funded training. Grant allocation and places on Services SETA funded programmes should be a guide to demand, and provide important implementation lessons to inform future planning. The process of identifying priority programmes is being reviewed. The skills needs being addressed, the mechanisms (programmes, grants etc.) used to address them, and the anticipated outcomes and impact of these interventions must be communicated. Mapping and aligning programmes to the needs of the Services Sector will be a key function of the Services SETA going forward. Monitoring and evaluation of the above programmes is imperative to understand relevance and effectiveness of such. This will help to refine scarce and critical skills lists, and bring a greater understanding to the sector and in the Services SETA of the challenges in matching supply and demand. Services SETA Sector Plan 2014/

83 Section 5: IMPLICATIONS FOR PLANNING 5.1 Sectoral Development Supply Different Services SETA sub-sectors have different skills requirements. In order to implement Services SETA programmes there needs to be an understanding of the supply of skills in the labour market in order to meet the demand for labour and skills as outlined in section four. The supply of skills is influenced by amongst others, the availability of suitable qualifications in institutions of learning; new jobs identified as scarce for which there is no formal education in South Africa (e.g. crime scene cleaning, morticians); entry level job opportunities where matric is not mandatory; where there are excess entry-level positions but progression to a supervisory level is a challenge. An important component for suitably skilled workers for the Services Sector is driven primarily by the availability of reliable career option information at school level HET enrolments and graduates Enrolment in higher education institutions has been steadily increasing over the years. Throughput rates, however, reflect relatively high attrition rates. Only a small proportion of students who enter a programme complete the requirements for their qualification within the scheduled timeframe. A major concern is whether this output addresses the needs of the services sector and the economy as a whole. Further research is to establish this. The figures below provide a summary of the total enrolments and graduates in higher education institutions over a three year period for Services Qualifications. Figure 24: Services qualification enrolment UNKNOWN QUAL TYPE DOCTORATE MASTERS/ MASTERS DIP HONOURS/NH DIP PG BACH DEG PG/DIP/POST DIP 1ST BACH DEG (4YRS 1ST BACH DEG (3YRS) UG DIP/CERT (3YRS) UG DIP/CERT (1 OR OCCASIONAL Year 2012 Year 2011 Year Source: DHET, HEMIS The data extracted from HEMIS presents enrolment specifically for services industries which include; Interior design, Business Administration Management and Operations, Entrepreneurial and Small Business Operations, Hospitality Administration, Marketing, Real Estate, Specialised Sales, Merchandising and Marketing Operations, Communication and Media Studies, Public Relations Advertising and Applied Communications. From the figure we see there was an increase of enrolment in 2011, however 2012 saw a slight decrease for students enrolling in the Services Sector. The highest enrolment is mainly on 3 year qualifications. Services SETA Sector Plan 2014/

84 Figure 25: Services qualification graduates UNKNOWN QUAL TYPE DOCTORATE MASTERS/ MASTERS HONOURS/NH DIP PG BACH DEG PG/DIP/POST DIP 1ST BACH DEG (4YRS 1ST BACH DEG (3YRS) UG DIP/CERT (3YRS) UG DIP/CERT (1 OR OCCASIONAL Year 2012 Year 2011 Year 2010 Source: DHET, HEMIS There has been an increase in the number of students graduating from 2010 to 2012 in the services industry. However, when compared to the number of students enrolling, there is a large discrepancy Services SETA Supply The Services SETA makes funding available to learners and training institutions to address scarce and critical skills needs. The Services SETA has a number of learning interventions geared towards addressing scarce skills on the supply side. These include the funding of learnerships, internships, apprenticeships, AET, RPL programmes, skills programmes and bursaries. Currently the Services SETA has 92 registered Learnerships of which two-thirds are been enrolled for. Through these interventions the Services SETA aims to ensure a sustainable supply of skills into the sector to alleviate the scarcity. The table below illustrates the learning interventions available at the Services SETA by NQF level. Table 18: Services SETA interventions by NQF levels Basic (0-grad 10) NQF Intervention 1 Learnership, Skill Programme, RPL, AET 2 Learnership, Apprenticeship, Programme, RPL 3 Learnership, Apprenticeship, Programme, RPL Intermediary (grade 11 to Diploma) NQF Intervention 4 Learnership, Apprenticeship, Programme, RPL, Internship 5 Learnership, Programme, RPL, Bursary 6 Learnership, Programme, RPL, Internship, bursary High (Degree to Doctorate) NQF Intervention 7 Learnerships, Internship, bursary 8 Bursary 9 Bursary 10 Bursary Services SETA Sector Plan 2014/

85 The Services SETA has qualifications registered with SAQA through its Quality Management Division. These are available to employers and other sectors of the economy. There has been a previous bias towards funding qualifications that were quality assured by the Services SETA. Now there is a move towards identifying appropriate interventions to address the scarce skills occupations. Some sub-sectors require experienced degreed individuals in specific areas (refer to scarce skills list). While there has previously been an excess supply of graduates, they lacked the requisite experience. In such cases the Services SETA should find the most appropriate intervention, such as an internship programme, specifically designed to cover the areas of scarcity in the sector. The Services SETA has predominantly offered its qualifications through private accredited training providers. In line with the NSDS III, the Services SETA will broaden the supply of qualifications through specific programmes at FET Colleges, taking into account business and regional needs of the economy. The immediate challenge for the Services SETA is to ensure sufficient supply infrastructure to enable the delivery of appropriate learning interventions. Learners targeted for 2013/14 financial year are: Table 19: 2013/2014 learner targets By learning intervention Learners Learnerships Employed Unemployed Artisans Apprenticeship and trade test 920 Assessment and trade test Internships Unemployed entering internships/workplace experience FET college interns (part of qualification) FET Graduate Placement (NCV) Work Integrated Learning (Universities) 0 Bursaries Employed Unemployed 260 AET 600 RPL 200 programmes Employed Unemployed TOTAL The Services SETA sees the Development Cycles as follows: Figure 26: Development Cycle Services SETA Sector Plan 2014/

86 As can be seen the cycle begins when scarce and critical skills are identified through research. Once identified it takes four to eight months to develop the curricular of qualifications that currently do not exist. Public and/or Private Developments Providers then need to be accredited to offer the programme, this can take between three and six months. The Development Provider should have qualified and registered assessors and moderators to assess the competencies of the learner against the qualification. This can take one month where they are readily available assessors and moderators or six months if they still have to be accredited for the qualification. Partnerships are assessed during a contracting phase of between one and three months. Career guidance takes place continuously as learners are informed of the needs of industries in order to choose a qualification that would assist them to enter the job market in future. Learners are then enrolled and progress is monitored until they exit with a certification. Depending on the type of qualification, this can take between six months and three years. programmes take about four weeks, while bursary programmes could take up to three years. The changes in the scarce and critical skills are affected by the learners absorption into the labour market and the cycle begins again. Priority Qualifications Qualifications and learning programmes are being designed, developed, registered and piloted in accordance with new standards and practices. This will be aligned to industry needs as the Services SETA draws on the expertise of industry practitioners who form part of the Community of Expert Practitioners (CEPs). All qualifications being developed are aligned to the scarce and critical skills list Services SETA Sector Plan 2014/

87 as identified in the previous SSP. It is anticipated that Occupational qualifications will be developed and registered within period The next table lists the priority qualifications to be developed. Table 22: Development of Occupational Qualifications: Phase Occupation OFO Code Hairdresser Call or Contact Centre Manager Workforce Manager Healthcare Cleaner Mortician Programme or Project Manager Programme of Project Administrator Garden Worker Quality Systems Manager Recruitment Manager Postal Frontline Service DQP Function Services SETA Services SETA Services SETA Services SETA Services SETA Services SETA Services SETA Services SETA Services SETA Services SETA NAMB Services SETA AQP Function Not Yet Appointed Industry to decide Not Yet Appointed Industry to decide Services SETA Services SETA Services SETA appointed as AQP Not Yet Appointed Industry to decide Not Yet Appointed Industry to decide Not yet Appointed Industry to decide As part of the Services SETA plan to ensure the supply of skills development practitioners, additional assessors and moderators will be registered to strengthen provisions and training providers will be accredited. Public and private learning institutions and training providers will be mobilised, developed and capacitated in the following ways to offer quality assured qualifications and learning programmes expanding access to targeted beneficiaries: National Further Education and Training Capacitation programme developed and implemented National skills development provider capacitation programme developed and implemented National career guidance and development programme developed and implementedcurrently from the SIPS scarce skills list, the following Services SETA skills have been identified: Occupational Cluster Critically scarce (50-100%) Significantly scarce (20-50%) Management Professionals and associate professionals Plant and machine operators : Programme or project manager (350) Quality Systems Management (100) : Earthmoving plant operators (250) Services SETA Sector Plan 2014/

88 Elementary and non-trade production workers :Landscape Gardener (150) In corroboration with the Services SETA scarce skills needs, the occupations listed above have also surfaced in the SSP research and are reflected in the scarce skills sections of this SSP. In response to these scarce skills, qualification scoping sessions are currently under way for the development of the following occupational qualifications: Project Management (121905) and Garden Services workers (821401) which links to Landscape Gardeners (611302). The Services SETA plans to allocate pivotal grants for scarce skills and support institutions offering this training. The current submissions of pivotal training plans are not adequately aligned to the list above. There needs to be promotion of these qualifications to employers for uptake thereof. Partnerships Stakeholder s concern of the disjuncture between the types of skills being produced by tertiary institutions and the needs of the workplace has been noted throughout the NSDS I and II period. NSDS III encourages strong partnerships between employers, public education institutions (FET Colleges, Universities, and Universities of Technology), private training providers and SETAs. Services SETA will be building partnerships with HEIs to understand the disjuncture better and to explore ways of overcoming some of the problems being experienced. The benefit of establishing partnerships between providers and industry is that the SETA receives technical input from employers and feedback to improve curricula therby increasing access to quality education and training. A further role for companies related to mentorship and career pathing. Various partnerships across economic sectors will be important in addressing particular skills development priorities, such as the cross cutting SIPS, green skills and public sector skills. The Services SETA has acknowledged the benefits of partnerships and has identified two types of beneficial partnerships for the sector. The first type of partnership is in the form of Priority Programme as contained in programme four of the APP (2014/15). This partnership aims at facilitating the allocation and contracting of discretionary grants for the enrollment of funded learners to increase the flow of new entrants into the labour market. Particular attention will be paid to transformation imperatives that aims to address the needs of persons with disabilities, to support the development of small enterprises, cooperatives and non-profit organisations, to promote responsiveness of FET and HET Institutions, for skills for rural development and to improve the employability of youth and those not in employment and not in education and training (NEET). These partnerships would provide funding and placement opportunities for learner enrolled at Further education and Higher Education institution to enter the labour market. Areas identified for partnerships are: To provide additional support and opportunities for learners with disabilities to enter the labour market To promote growth and sustainability of small levy paying employers, non-profit organisations and cooperatives through mentorship and training To expand access to SETA qualifications through public providers at intermediary levels For collaboration in programmes implemented through the HET system To provide funding and placement opportunities for learners enrolled at both FE and HE Institutions Services SETA Sector Plan 2014/

89 To provide opportunities for rural learners in a competitive labour market For collaboration in skills development programmes and to stimulate the rural communities To facilitate access to skills development interventions in remote areas To generate skills to support successful implementation of the Strategic Integrated Projects and to address identified scarce and critical skills within relevant occupational clusters To facilitate programmes to improve the employability of youth To enable the youth and the NEET group to access and participate in skills development initiatives To provide an alternative route for experienced practitioners to receive formal recognition of the knowledge, skills and experience already acquired. Below are identified strategic partnerships with targets linked to the transformational imperatives. Strategic Partners Purpose of partnership Target % Public Further Education and Training Colleges Public Higher Education and Training Institutions Development agencies Youth organisations Apex bodies representing cooperatives and non-profit organisations National and provincial disability organisations To increase access to education and training at intermediary level Expanding the footprint of SETAs in provinces and in particular rural areas. To increase access to education and training at higher level Maximize on the investments made in the support and development of small enterprises and non-governmental organisations Provide support to cooperatives and nonprofit organisations Mainstream disability and facilitate absorption of persons with disabilities into the labour market 30% of learners to be enrolled in public education institutions 30% of learners enrolled must be youth 4% of learners enrolled must be learners with disabilities District and Local Municipalities in the targeted rural areas Relevant government departments and state owned entities To stimulate the rural economies by ensuring that skills development is linked to key economic growth areas To support public sector delivery 20% of learners enrolled must be within rural areas 5% of learners enrolled must be placed within the public sector The Services SETA has specifically selected public FET Colleges linked to the rural development strategy and is in the process of signing MOUs with these Colleges. The Services SETA has identified the following interventions for rural learners: Hairdressing and Beauty Treatment Cleaning Services Gardening Maintenance Funeral Services Services SETA Sector Plan 2014/

90 Business Management and Administration Project Management Call Centre Services SETA will endeavour to support people in rural areas to develop their skills, to develop the skills of the unemployed, and to contribute to local economic development. In 2012/13 collaborative agreements were signed with Further Education and Training (FETs) colleges with the following allocations of learners: 500 FET Internships, 200 FET practical experience 130 HET undergraduate allocated to rural top performing Matriculants and 500 HET post graduate allocated in Management and Leadership Development Programmes. Workplace learning is an integral part of vocational programmes and establishing effective partnerships would provide for workplace training and ensure that skills have labour market relevance and that young people are exposed to the world of work. Ultimately, the Services SETA intends to work with all 50 FET Colleges nationally. The second type of partnership identified by the Services SETA is to facilitate relationship responsiveness with key role players for the purposes of mutual information sharing with stakeholders. Stakeholders would include government, business organisations, trade unions, constituency bodies, public bodies, employers, trade and professional bodies, public and private training providers, community-based organisations, cooperatives and NGOs. This partnership seeks to address training needs of public and private sector employers to broaden access to further learning and to improve the quality of the learning programmes available to the sector. The modus operandi of this partnership is outlined in Programme five of the APP 2014/15. Organised constituencies for partnerships are: Business Chambers of Commerce, industries and professional bodies Government National government departments and public entities Labour Trade Unions and federations Civil society Society organisations Services SETA aims to formalise agreements to solidify partnership around areas of mutual interest for a more strategic engagement with stakeholders. Such partnerships will take the form of MoUs, Service level Agreements (SLA s). Links to the Strategic Plan The Services SETA has aligned its organisational plans in the Strategic Plan to the NSDS III goals and the seven transformational imperatives. The Services SETA has identified key learning interventions to deliver through specific programmes with targeted groups. The figure below illustrates their strategic thrusts, learning interventions and targeted beneficiaries in line with the NSDS III goals and transformational imperatives on which the SSP is based. There are five learning programmes (learnerships, bursaries, skills programmes, internships and apprenticeships) embedded within the 6 priority programmes: 1. Persons with disability 2. Small enterprises, cooperatives and non-profits 3. FET & HET Institutions 4. Rural Development Services SETA Sector Plan 2014/

91 5. Strategic Integrated Projects 6. Youth & NEET The priority programmes link closely with the seven transformational imperatives identified in the NSDS III. This is delivered through 8 programmes, two of which are enablers, namely governance and administration). Figure 27 illustrates the links between the NSDS, the transformation imperatives, the strategic trusts and programmes through the various interventions. Services SETA Sector Plan 2014/

92 Figure 27: Alignment to organisational plans and imperatives Services SETA Sector Plan 2014/

93 Section 6: RECOMMENDATIONS FOR IMPROVEMENT The DHET had requested the Services SETA to submit a Continuous Improvement Plan (CIP) with the SSP. The objective of this was to provide the DHET with a better understanding of the needs and challenges experienced by SETAs in the development of the SSP. 6.1 Changes and Improvements in Methodology The 2010/2011 SSP was based on a sample of 250 WSP and ATRs. The sector operated under a cluster of ten Chambers with over 30 sub sectors. In 2011, during Administration, the SSP was reviewed to gain a better understanding of a sector as unique as the Services SETA. It was found that prior years presented that the Services Sector statistics were based on both the national and international definition of the Services Sector. The Services SETA refined the services sectors using the standard industrial classification codes and established six Chambers covering 16 sub-sectors in order to organise its services and to plan skills development interventions in line with the sub-sectors. The previous SSP was based on sub-sector focus groups and in-depth interviews with key informants with special knowledge of the sub-sector. The research design employed in 2013/14 was based on mixed method studies to collect information through focus group, in-depth interviews, questionnaires and a validation exercise with sub-sector associations. In addition existing data and information sources from the previous year s SSP was reviewed along with ongoing consultations with the Chamber Manager and a presentation of the SSP to the Accounting Authority subcommittee on Risk and Strategy. These sources were used to update and improve on the SSP in order for the Services SETA to better respond to the skills demands of employers. With two staff members in the department, the Services SETA used the online research tool, Questback, to capture and analyse data from the surveys. The following table demonstrates changes in the development of the SSP from 2010 to 2013: Services SETA Sector Plan 2014/

94 Table 20: changes for SSP Qualitative interviews) (in-depth none none 133 in-depth interviews Utilised the 133 in-depth interviews from 2012 as they were concluded in November 2012 Qualitative (Focus groups) PESTEL none 16 sub sector focus groups 47 sub sector cluster focus groups Quantitative (surveys) Sample of 250 WSP/ATRs Planning of surveys, focus groups and in depth interviews none 649 regional surveys 206 symposium surveys = 855 Desktop research Desktop research Extensive desktop research Desktop research Desktop research Scarce and critical list Scarce skills provided based on WSP Compiled by company and Services SETA Only critical skills provided company and Services SETA Scarce and critical skills included company and Services SETA Scarce and critical skills with projections plus association validation Services SETA Services SETA Sector Plan 2014/

95 6.2 Peer Review SETAs were clustered into economic sectors for a peer review process for the evaluation of SSPs in The objective was reciprocal learning in the areas of data collection, context of planning and SSPs translation into SETA strategic plans. The output was a cluster SSP evaluation report. W & R SETA was the lead SETA for the services cluster which included the Services SETA, Transport SETA and Culture, Art, Tourism, Hospitality and Sport SETA. The Services Cluster peer review meeting convened in September 2013, followed by the Services Cluster Peer review Report which was submitted to the DHET on 2 October The cluster identified best practices and challenges with recommendations for expanding their work. The peer review was felt to be an on-going process and not a once off activity. 6.3 Challenges Obtaining Services SETA statistics is a challenge, as the demarcation of sectors used in the labour force surveys is not the same as the SETAs SIC codes. As a results data it is not readily available for the Services SETA. From the database received from SARS and DHET, only (7.8%) of employers had addresses. This affects the cost of research with telephonic and face-to-face interviews, and focus groups having taken place. The negative perception of the SETA during administration has impacted on stakeholder willingness to participate in research. The quality of data is hampered by problems associated with the Services SETA database and the fact that the SIC by DHET is not in sync with the Stats SA. WSP and ATR do not provide adequate information as 2% of levy-paying employers submit these documents with 75% of submissions from one sub-sector. This affects the validity of the WSP data and as a result it has been used with caution in the SSP. 6.4 Recommendations The Career Junction Index presents reliable labour market statistics as the research is done using a sample size of over 2.3 million registered job seekers. The CareerJunction Index offers customised labour market analysis on an ad hoc basis and the Services SETA can look into this source for future labour supply and demand information customised to the Services SETA. Systems should be put in place to monitor vacancies in each of the Services sub-sectors. Vacancy numbers and periods of posts not being filled is an additional source of information that can be used. SETA will be seeking the assistance of its employment services, employers as well as establishing relationships with statistical and research institutions so that regular labour market information can be captured and analysed. Whilst the Services SETA has conducted research in a number of sub-sectors in recent years there had been limited focus on supply and trends in the sectors. For most of the past two years, SSP research was conducted internally. There is a need for more thorough sub-sector research. The Department intends to conduct a national survey for 16 sub-sectors through the six chambers. The Services SETA has tried various ways to improve the submission of WSPs by the broader SETA membership. There have been efforts to improve the WSP templates, including the introduction of online submissions in a template. Given these challenges, it has been difficult for the SETA to develop a database consisting of uniform data out of which trends could be derived. During 2014 and in future years the Services SETA intends to devote resources to promoting workplace skills planning on a much larger scale, so that the data obtained is more accurate and reliable for use in analysis and forecasting. Services SETA Sector Plan 2014/

96 To improve the reliability of the database for research, the Services SETA may outsource the verification of employers contact details and addresses via a call centre. The Services SETA will improve on the percentage of the representative sample and respondent participation rate in 2014/2015. The current year (2013) has been the only year where projections were made. Going forward the Services SETA will be able to track changes and compile a more comprehensive trends analysis. Table 21 is a list of the Agenda compiled in There is a need to review the existing research strategy in terms of relevance. Table 21: Agenda Project title Universities project Understand labour market dynamics Sector Plan Purpose and focus of proposed project MOUs with public Universities for research collaboration and partnerships To understand labour market dynamics in the sector and build credible labour market intelligence. Use of various source data To conduct research to update the sector skills plan Impact assessment of Afro Hairdressing in South Africa Impact of the informal economy on the services sector Social media research Situational analysis of the Fashion Designing industry Growing green businesses in the Services Sector in South Africa Challenges of Entrepreneurship and SMEs in the Services Sector audit in the Services Sector Supply side analysis ing barriers experienced by people with disabilities Impact of informal Afro hairdressing to the economy To establish the impact of informal business in the sector An investigation the appropriate use of social media for SMEs. To define the nature, scope and skills profile of occupations in this sub sector. Minimal research is available on this sub sector. Identify present and future green jobs in the sector as a possible job creator. To establish ways to support SMEs based on their skill needs. Current and future qualifications to meet skills needs per sub sector. Aim of this project is to identify skills gaps and needs in each sub-sector. A supply side analysis will be developed based on current programmes available to meet the demands of the sector. To establish what factors prevents persons with disabilities from accessing Services SETA funded programmes and the impact of those who completed learners Services SETA Sector Plan 2014/

97 Impact assessment of learners Impact assessment of 2012 rural interventions of the Services SETA Future jobs in the services sector: New Growth Path The changing nature of the cleaning industry Monitoring of vacancies To investigate the perspectives of unemployed learners who completed learning programmes and found employment To measure the impact of the Services SETA interventions in rural areas. Lessons learnt for future rural initiatives. To identify possible growth scenarios with this industry-wide research project Focus on the evolution of the cleaning occupation (changes in employment patterns demand for more skills etc.) Monitor vacancies and periods of posts not being filled Services SETA Sector Plan 2014/

98 References Career Junction Index. Salaries. [Available at Career Junction. Career Junction Index June 2013 [Available at Department of Environmental Affairs, Environmental Sector Plan for South Africa: A systems approach to human capacity development and sector skills planning (2010) Pretoria Department of Economic Development, New Growth Path Framework (2010). DeD. Pretoria: Government Printer. Department of Economic Development New Growth Path: ACCORD 1 National Accord. [Available at: Department of Labour Commission for Employment Equity Annual Report. [Available at: Department of Labour National Authority Briefing Paper Scarce and critical. [Available at: Scarce%20and%20Critical%20Skill%20(2).pdf] DHET, National Development III , January. Department of Higher Education and Training. [Available at: DTI National Industrial Policy Framework, Department of Trade and Industry. Pretoria: Government Printer. DTI Industrial Action Plan 2010/ /2013, February, Department of Trade and Industry. Pretoria: Government Printer. EE Focus Learning Programme Participation. June 2010: Services SETA Gross domestic product, Annual estimates , and Regional estimates Third quarter STATSSA. [Available at: Accessed on 16 November 2012 HRDS SA Human Resource Development Strategy for South Africa , 09 March, Pretoria: Government Printer. International Monetary fund Regional Economic Outlook: Sub Saharan Africa: Maintaining Growth in an Uncertain World. [Available at: IPSOS Makinor Baseline Study into the Public Relations and communications management industry. May: Services SETA Services SETA Sector Plan 2014/

99 KNC & Associates The roles, responsibilities and functions of a Quality Professional Body. 31 March: Services SETA. Labour market dynamics in South Africa [Available at /Report pdf] National Treasury Medium Term Budget Policy Statement. [Available at mtime: /files/docs/111025mtbps_0.pdf [Accessed on 16 November 2012] Services SETA SQMR Report 2010/2011. Services SETA: Johannesburg Services SETA SQMR Report 2011/2012. Services SETA: Johannesburg SERVICES SETA Services SETA Annual Report Services SETA: Johannesburg. SERVICES SETA Services SETA Employer Database (Retrieved in November 2011). SERVICES SETA Services SETA Employer Database (Retrieved in November 2012). SERVICES SETA Services SETA Employer Database (Retrieved in July 2013). Services SETA Sub-sector Chamber Workshops Services SETA 2013 Regional visit focus groups 2013 Services SETA 2013 Regional visit survey 2013 Services SETA 2012 Symposium registration forms November 2012 Services SETA.2012.Sub-sector In-depth Interviews Services SETA. Work place Plan, 2012 Services SETA (2013) Regional Visit report Development Levies Act (Act 9 OF 1999). Government Printer. South Africa reserve bank Annual Economic Report 2012 [Available at Statistics South Africa Dr S Pillay; A brief note on profiling the services sector- presentation; 2 August 2012 Statistics South Africa. Gross Domestic Product, Third quarter 2011 page 42. [Available at Quarter 2011] Statistics South Africa. Gross Domestic Product, First quarter 2013 [Available at Statistics South Africa. Gross Domestic Product, Second quarter 2013 Services SETA Sector Plan 2014/

100 Statistics South Africa (Stats SA) Monthly Earnings of South Africans, [Available at Pretoria South Africa sees its wealth market growth prospects undermined by eurozone crisis [Available at: ed_by_eurozone_crisis?productid=73deb039-b156-41fe-b00e-4a0328f13d79] South African Reserve Bank Annual Economic Report 2013 [available at 441f-b7bf-bb7dfb1bedb4&sarblist=21b5222e e55-bb65-56fd e&sarbitem=5831] Statistics South Africa Mortality and causes of death in South Africa, 2010: Findings from death notification [Available at Statistics South Africa Mid-year population estimates 2013 [Available at: Services SETA Sector Plan 2014/