1 A Company Perspective Challenges and OpportunitiesSkills Development A Company Perspective Challenges and Opportunities Rajen Govender Human Resources Director Weir Minerals Africa

2 Skills Development Challenges and OpportunitiesSEIFSA – 29 February 2016

3 Context: Industry Down turn in industry – declineJob Losses: Lost jobs in industry (SEIFSA – Business Day report February 2016) – Unemployment rate of 24.5% Q (STATS SA) Our industry has seen major attrition. Are we operating in a vacuum? Rand / Exchange rate vs importing cost Challenging Mining industry: Shrinking client base Commodity price trends Legislative changes Production: Dropped 3% in 2015 (SEIFSA) Traditionally what's one of the first budget items to get the chop? You can’t shrink your way to greatness (Tom Peters) Lets refuse to participate in this so-called recession!!!!

4 Context: Education & TrainingLegislation: Skills Grants BBBEE SETA landscape DHET focus areas Schooling FET

5 WHAT DRIVES THE DECISION TO TRAIN OR NOT?Stop training for BBBEE POINTS !!! Not about compliance Training because it’s the right thing to do for the company, for the employee And for the greater economy Train them and they leave, don’t train them and they stay – which would you prefer? = EVP When was the last foundry training done? Close to 30 years ago last formal artisan training in the foundry industry (foundry theory/ moulding etc.) What is the current state of that - SAIF/UJ/Industry What is the difference between what we have and what is needed in terms of artisans What about training of other disciplines other than those related to your core Business?

6 Challenges to Skills DevelopmentSEIFSA – 29 February 2016

7 (Part of SETA landscape proposed changes)Challenges: Skills Grants Changes in skills grant legislation: Allocations Past Current Future (Part of SETA landscape proposed changes) Mandatory grants 50% 20% Discretionary grants 49.5% 9.9% NSF 60.1% Some things are out of our control!

8 Challenges: Discretionary GrantsLogistics to apply: DG application is done in one year and funding awarded the next The company/industry skills needs might have changed already Accessability for SMME’s and Meduim companies: Don’t have a dedicated training department / SDF Don’t have dedicated person to lead application Don’t have capital to sponsor training before funding is awarded Opportunity for larger companies to embark on ED programmes

9 Challenges: System changesPre-1999 Industry Training Boards Industry to claim training expenses after they have paid 1999 / 2000 SETA System Mandatory & Discretionary grants 2016 SETA landscape changes (Proposed) Implementation not confirmed

10 Challenges: Pipeline Educational challenges:Maths – Maths literacy, maths third paper Lack of Math teachers Matrics with Maths & Science Limited career options Career guidance: Lack/quality of career guidance Image of artisan trades – Some stats point to constraints leading to the shortage of skilled motor mechanics in SA According to the Youth Entrepreneurship program: “The shocking truth is that South Africa’s estimated 40+% youth unemployment rate is among the highest in the world. This is further compounded by a 16% decline in entrepreneurial skills among 18 – 34 year olds.” How can we as employers positively influence a better outcome (early intervention at schools-SED programmes) Me in 1984!!!!!

11 Opportunities to Skills DevelopmentSEIFSA – 29 February 2016

12 Skills shortage – a theoretical perspective!definition of a skills shortage from Shah and Burke (2003): A skill shortage exists when the demand for workers for a particular occupation is greater than the supply of workers who are qualified, available and willing under existing market conditions

13 Opportunities: Youth Career guidance Access to unlimited resource poolChannel young talent in the right direction Catch them early – (sponsorships/employee education assistance) Explore potential Entrepreneurial spirit: RSA is the country with the highest Entrepreneurial appetite “A 2011 Global Entrepreneurship Monitor (GEM) report has found that the more people in a country are involved in opportunity entrepreneurship, the greater the level of economic development.” Skillsportal: “”people with a tertiary qualification are more likely to start an opportunity-motivated business than a business motivated by necessity”

14 Apprentices The studies - Apprenticeships3 years vs 4 years – Quality of training Section 13 vs Section 28 and now Section 26 D Weir Ambassador Programme – you are the champion of the success Sourcing and Selection - critical point of departure Quality exposure during OTJ/Exchange programmes Grow your feeder system for your talent pool! Dual ladder approach = earning potential Ownership and commitment form the highest level Why train: Don’t fall in the trap of thinking “If we train the they will leave, what's worse if you don’t train them and they stay” Train for your needs and for the industry at large – create a greater pool of artisans – render job hopping futile Remember training is a critical part of any retention philosophy Build your retention around your talent pool with focus on HIPO’s – across all job categories

15 Apprentices Opportunity for growthSpecialist in a field or people manager Earning potential not determined by number of direct reports Aides in retention due to prospects of different careers with one employer Do not only focus on employees that are pivotal to your core business to the detriment of other support/functional employees Company-specific Artisan grading – reward Succession planning/HIPO’s Productivity vs Reward Actual spend vs Budget Train artisans with a future outlook in mind Predict future needs (numbers/skills)

16 HOW CAN WE MAKE THIS WORK FOR ALL CONCERNEDInductions/Orientations – Start of the engagement for better EVP! Safety – add a module to all your training interventions especially apprentices Competency assessments after training interventions Forget about the notion of ROI The Weir ambassador programme OJT/Hands-on training/Theory Create an environment that encourages innovation – promote this, celebrate this and implement where there is merit!!!! Equip learners/youth with Entrepreneurial skills and attributes- ED projects Train the to be independent and self efficient Focus on employable/ portable / self employment skills

17 Opportunities: FundingVarious funding mechanism: Mandatory grants Discretionary grants NSF Youth subsidy Tax rebates