BUSINESS & MARKET INSIGHTS FOR BPO&O, CONTACT CENTRES, MARKETING & SOCIAL BUSINESSES
AFRICA
HUMAN CAPITAL & SKILLS DEVELOPMENT
MARKET INTELLIGENCE REPORT 2015−2016 YOUR KNOWLEDGE PARTNER IN BUSINESS
CONTENTS Human Capital ...............................................................................................................4 Training & Skills Development ......................................................................................32
First Published 2014 Knowledge Executive 369 Oak Avenue, Ferndale, Randburg, Johannesburg, 2194 Urban Hub, 142 Buitengracht Street, Cape Town, 8001 Copyright © 2014, MMG Publications
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Disclaimer:
The information and data in this book was comprised with the utmost care, research and professionalism. However the authors, editors and partners and suppliers of this publication accept no responsibility, or are held liable for any incorrect or inconsistant information and data.
Publisher: Knowledge Executive Managing Editor: Mark Angus Editor-at-Large: Traci Freeman Contributing Editors: Bryan Silke, Kerry Somers, Jeanette Phillips, Rodney Weidemann, Donovan Jackson Key Accounts & Sales Executives: Candace Kentridge, Clint Stebbing Research Report Designer: Esmie Lamprecht Web Designer: Sacheev Bhogal Creative Director: Sean Copping Creative Lead: Ryan Heinrich CRM & Data: Lerato Makaane Administration: Valeta Leigh, Collings Mphatse, Shaun van Zyl
HUMAN CAPITAL The evolving landscape of the BPO&O and contact centre industry necessitates a reevaluation of client and employee expectations in order to move forward accordingly. People are the most important asset of the service industry. Understanding the relationship between attracting, developing and retaining talent and financial bottom-line success is essential in this competitive, customer-centric business world.
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“
Henry Ford realised that in order for the company to work properly, he had to think not only of the company but also of the whole system.
”
Unionisation, labour law amendments, the education system – these are all topics
In 2011, The University of Johannesburg started looking at developing a Human
broader human capital services market. At the same time, the industry it serves is also
developed by Chris Jacobs and Gert Roodt who recognised that no integrative
currently influencing the discussion around South African HR services and the transforming as digital, social and mobile channels come to the fore.
Knowledge Executive consulted industry leaders within South Africa’s recruitment and human resource (HR) organisations to explore key trends in HR for South
Africa and Africa, with particular reference to skilled resources, employee development and attrition: ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Capital Predictive Model for agent performance in contact centres. It was empirically validated model exists that can explain the human resources phenomena contributing to agent performance in the South African contact centre industry. This theoretical model was being statistically analysed and completed by the end of 2014. Ultimately, it aims to consider all the possible variables, its interactions and immediate and long-term outcomes, in a complex model.
Adcorp
Emergence Growth CallForce
Careerbox Quest
Human Capital Predictive Model
Monyetla Work Readiness Programme
Eight building blocks of the Human Capital Predictive Model for agent
University of Johannesburg – independent PhD researcher
Key findings suggest that the following are related to contact centre
Graeme Codrington: HR Strategist on the Future World of Work
The 2012/13 Knowledge Executive Business & Market Insights Intelligence Report
performance in contact centres were identified by Jacobs and Roodt. performance:
identified the shortage of skilled labour, especially managerial and supervisory
▪
changed in the last two years, although there appears to be growing debate as to
▪
skills, coupled with staff retention as the biggest risk facing the industry. This hasn’t
▪
where the responsibility lies in working around this problem.
▪
Graeme Codrington, expert on the new
▪
his point of view with this example: “I’m an
▪
world of work and HR futurist, summarised enthusiastic student of economic history.
▪ ▪
human resources management practices person–environment fit
job demands-resources engagement
agent well-being
agent competence
turnover intention; and agent performance.
At the start of the industrial era, working
This research can contribute to the fields of human resource
work. Henry Ford realised that in order
within the contact centre and BPO environment - Jacobs, C., & Roodt,
to think not only of the company but also
contact centres. SA Journal of Industrial Psychology/SATydskrif vir
government to build roads. He ensured that
co.za/index.php/sajip/article/view/940/1089
the cars they were building. He doubled
Both the visionary and statistical models described above are worth
a visionary mind-set. In South Africa, I think
in this chapter.
in a car factory was considered menial
management (HRM), human capital and performance management
for the company to work properly, he had
G. (2011). A human capital predictive model for agent performance in
of the whole system. He had to lobby
Bedryfsielkunde. Available as a free download at: http://www.sajip.
his labourers earned enough money to buy their wages to build his market. This takes
considering in context of the issues and challenges discussed in-depth
we are up for that level of vision.”
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Education Many of the stakeholders in the human capital and HR sector believe South
Africa’s education system is one of the main industry threats. According to Adcorp, the root of the challenge lies at teachers unions, who seem to have a
firm grip on the system by prioritising the rights of teachers above pupils’ rights to adequate levels of education.
The deterioration of the South African education system seems to have left the
industry with no other choice but to employ candidates that do not have grade 12 certificates. There also seems to be a growing amount of privately-owned
institutions emerging as alternatives to the public education. These private institutions have potential because they offer affordable training options to learners, and workplace relevance to employers.
Whilst there does appear to be a failure of the South African education system to provide basic skills, there is also a generational gap. Interviews indicate that social media policies are outdated as are remuneration benefit structures. The
youngest generation might be the most difficult to manage, but they are still
the highest performing and there must be an opportunity therein. There is an opportunity for organisations to use the abundance of technologies available like performance support tools.
Quest is concerned about the impact of the South African education system on the entry-level workforce. According to them, the entry-level workforce does not
Ok Mr. President, you create the 6 MILLION jobs, we will FILL them.
have the cognitive ability to grasp training. “We do, however, need to bear in mind
that some of the candidates did not necessarily leave school because they failed, but because they had other responsibilities or social economical difficulties.”
Careerbox agrees that it’s a bigger issue than just formal education. There is a gap between the understanding and expectations of young people entering the
VOTED
workforce - especially in the service industries - and what the market needs and
No.1
wants. “With or without a matric certificate, the gap represents an attitudinal mismatch. Remember that in disadvantaged communities the reason for not
matriculating may have been extraneous – environmental and economic factors – not necessarily due to a lack of competence.” Careerbox reaches out to these
young people and equips them with the talk-savvy service skills required in
contact centres. This is where the primary gap is – between the end of education and the start of work. Careerbox isn’t seeing employers filling that gap. “Young people entering the workplace are being managed traditionally – as we would
have the older generation,” says Quest. “IT policies are not congruent with what this generation needs to remain motivated in the workplace. They are familiar
Field Marketing
Master Service Provider (MSP) Outsourced Staffing Solutions Payroll Outsourcing Recruitment Process Outsourcing (RPO) Special Projects
with multitasking over many devices and restricting that doesn’t make sense.”
Quest is also seeing a desire in this generation for variable pay – output and performance driven.
Join the conversation #jobpolitics www.quest.co.za
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Permanent Placement Solutions
HUMAN CAPITAL
The Monyetla Work Readiness project manager believes that South Africa is an inherently resourceful nation but is caught between old school standards while
trying to deal with the future challenge when it comes to skills. “We need to tap into people’s willingness and potential to learn without being bogged down by
criteria such as matric certificates. The youngsters today see the world differently and if organisations create an environment conducive to exploiting their potential,
“
More organisations will question the value add HR and wellness providers deliver in the next two years. There will also be a greater attention to costs with expectations of strategic input from providers. The need for multi-skilled agents will become more prevalent.
they do perform. There are a number of fantastic work readiness initiatives in place. Some are government funded and aim to bridge the gap between school and entering the Business Process Services or Outsourcing (BPS/BPO) sector.”
forward into 2015 and beyond. Certainly, Adcorp believes the most catastrophic
What the Monyetla Programme has found is that these young individuals may
They point out though that 58% of those vacancies waiting to be filled are in
they are properly coached and supported in the workplace, they match or even
Generation Y surveys indicate that they don’t want additional responsibility in
failing in the labour market is the absence of skills needed to fill work opportunities.
lack computer and comprehension skills due to a poor education, but when
management. “Management is largely drawn from the boomers generation.
outperform their peers. So the Monyetla project manager believes we need to
the workplace and don’t wish to take responsibility for their peers. This leads to a
change our approach, as a country, by identifying people differently by looking at their potential to learn and move away from old recruitment paradigms. "The
Monyetla Programme has shown that the challenge is less about our skills potential and more about our collective mind-set to build skills for the future in which investment in education within the workforce is a long-term solution.”
Codrington agrees: “A fundamental incorrect mind-set is a problem. Our education system and our skills development system have not stepped back and
asked what type of people we want to create. A lack of focus on the development of softer, people orientated skills is one of the factors inhibiting growth in the
industry. The key requirement is that we need to start looking at education from an output perspective. The skills component is the easiest piece to teach – most things can be taught. Companies are not battling because of the hard skills – they
are battling because of a shortage of soft skills. You want proactive people, you want people who can think beyond the script and you want people who are good
at communicating and people with personality. None of these things are taught in formal education.”
Skills Shortage & Skills Development Since 1994, there has been a 4-fold increase in the average age of managerial
employees in South Africa. Roles that are difficult to fill include workforce planners,
critical shortage of managerial skills that will only increase over time.”
Quest notes that this is not only caused by substandard levels of education, but also other socio-economical factors. The company says a conducive way
to develop skills in the industry would be by identifying learning potential. “Organisations will have to concede that they have career paths in place for their
entry level employees. They need to train people as they move along. There needs to be huge investment in academy models and partnering with the right
players. The time to develop could be anything between three and 18 months –
depending on the type of skill you want. The young employees are energetic and they have a willingness to learn.”
CallForce says that limited recruitment and development of unskilled staff is
undertaken by South African companies. “We keep fishing from the same pool of talent. But to employ unskilled staff based solely on their potential would require
a specialist. The standard recruitment process does not apply in these cases.
For example, typing speed and skills cannot be used to assess the candidate
accurately as they may not possess the skill needed to meet benchmarks. Potential agents need to be identified according to their aptitude and certain characteristics that they display, and developed accordingly.”
Adcorp notes that another problem is that government policies are moving in the
information specialists, business intelligence analysts, technologists, process
wrong direction and increasingly out of date in a globally competitive environment.
is of concern to the industry and all those surveyed agreed that the skills shortage
A participant in the Monyetla Work Readiness Programme doesn’t think it’s a
engineers and contact centre managers. The lack of emerging managerial talent is still the biggest risk facing the industry.
bleak picture. “As a foreigner, I think the opportunity is huge in South Africa. The
This was highlighted in last years report, but Knowledge Executive is interested to
it is the job of the market to identify what skills are required in the marketplace.
see how this position will change. Some early adopter clients are experimenting
with different ways of organising authority in the workplace - self-managed or unmanaged teams are becoming viable options – and this will remain a trend going
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”
question is: what do we need to do and who needs to do it? I think we agree that The key question is whose job it is to develop those skills. We can complain and
criticise that the government isn’t doing its job, but governments all over the world
take a long time to change and turn around. So the onus is on the operators for
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the employers. In the old model, we may have put an ad in the paper when there
was a vacancy and waited for people to apply. Today, we need to be much more
proactive. And all of us need to work together – competitors and partners alike – to develop these young people.”
Work from Home vs Work Readiness Knowledge Executive had further discussions with outsourcers in SA who feel that the problem is greater than is being reported. Where it once
it took 6 weeks to get a new agent fully operational, it now takes closer
to three months and even then only a few are able to grasp multi-tasking
skills. As a result, some of the biggest outsourcers are looking to find more mature individuals and therefore migrating from work readiness programmes to the work-from-home model. The thinking behind this is
that if the necessary skills can’t come to the outsourcer, the outsourcer
will go to them. This is a key trend that we predict will continue into 2015 and 2016.
people into other careers. Usually
Attrition and Retention Knowledge Executive distinguishes between two types of attrition drivers in the contact centre industry. The first type is endemic – factors which cannot be avoided. The second type is incidental – factors that can be avoided. The stepping stone concept – where entry-level employees enter the contact centre space for career progression – is endemic to the industry. One won’t find people who want to be in contact centres in their forties or fifties (unless they work from home). Incidental factors would be appropriate reward mechanisms, career progression programs and correct site selection, which is very important, explains Adcorp. According to Quest’s research, negative attrition levels have a direct relationship with bad supervision. “Up to 38% of the agents blamed their first career change on bad management. Secondly a lack of career pathing is also problematic. Learning and training opportunities are also very important, as well as incentives.” Adcorp believes this is a challenge ranging from entry-level employees to topmanagement. “In addition, within the contact centre and BPO industries, young people are highly mobile – particularly outsourcers who work for reputable international or domestic companies. To be able to put “Vodacom” or “MTN” on your CV as a young person gives you tremendous job prospects for career advancement. The contact centre industry is very much a stepping-stone for young
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clerical or services or administration
“
or sales.”
integrated, with a focus on collective learning. With this approach, students still get
Emergence Growth sees a direct
the value of the “big lecture” in
link between skills shortages and insufficient
Core mediums will become
levels
of
terms of scale, but also benefit
employee
engagement. “They haven’t done
from the interaction in small
or understood the full aspect of
groups and social media.
employee engagement and fail to
ask questions like ‘What makes
”
your organisation attractive?’ or ‘What can we do to make you stay in the organisation?’ or ‘What can we do that will make you put in an extra effort?’. We also need to ask if the leadership style of the organisation is conducive to a
contact centre type of environment and not only that, but the whole question of ‘do I want to stay here for the long haul?’”
Notwithstanding the policy constrains and mind-set of some of the institutions,
there are still work-arounds, and that is up to the employers. For example, Monyetla and other academies have seen, on an average intake of individuals who graduate, more than 70% can be placed in employment and of those, more
than 54% retain their jobs for more than 2 years. “Their success is a combination
of their attitude and the employer. We know that some employers are not good at keeping people, others are excellent. If more employers have more patience
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in terms of developing people and exploit the technologies that are available to help and support this, then what is fundamentally broken can be rebuilt. “We do
have a big challenge at mid-management level, but there must be at least 20 000
supervisors and team leaders of whom if 5% have been formally trained – it’s a lot. We promote them from within, put a team under them, measure them by the
old standards and then wonder why they don’t perform. But when we take those same people and equip them to perform, build their confidence and competence
and build an environment around them that works – they do perform. That doesn’t
suggest lack of competitiveness or inability. Those that learn to get it right are highly competitive. But that group is too small. We need to share the lessons with each other, leverage our experience and commit for long enough to reap the rewards.”
but also how you provide that service. Services are becoming more complex;
no longer are you providing simple information such as a bank balance, because the IVR provides for that. Now someone is phoning about their chronic medication and it is a different type of transaction altogether.”
Quest believes the biggest human capital risk facing the industry lies in a lack of complex skills. Cognitive skills are becoming increasingly important as
customers’ demand for instant solutions are on the rise. “This is going to be the biggest challenge as the demand for value adding skills increase. As the wave
of technology starts to streamline, complex skills will become more and more
important. In the age of consumerism clients are absolutely in the know, so the first call resolution is going to be paramount in terms of customer service and delight and its impact on the organisation.
“If we change our mind-set and choose to invest in training, basing it on
a return on investment, we will become the owners of the problem and thus the solution. Tax grants are great but not the silver bullet. I’m under no illusion that skills development is an immense challenge but it’s not
uncontrollable and insurmountable. We can control the outcome – it’s
about how we change our approach." Monyetla Work Readiness Project Manager
“Contact centres are going to have to re-evaluate their first call resolution rate and their ability to deal with complexity at the first point of call. As clients
become more self-sufficient, your contact centre will have to add more value as a sales generating entity. Sales-through-service is going to become more pronounced,” says Quest.
Linking to an increasing focus on value adds and ROI resulting from partnering
with service providers in human capital and HR, Quest-employees’ performance is measured on an output-basis. “This is going to become more common
Expectations Through the research conducted with all the industry stakeholders, Knowledge Executive has identified that while the industry is suffering to retain skills, expectations will increase on the receiving end of the BPO value chain in 2015 and 2016, placing even more pressure on the industry to retain competent, value-adding human capital. More organisations will question the value add HR and wellness providers deliver in the next two years. There will also be a greater attention to costs with expectations of strategic input from providers. The need for multi-skilled agents will become more prevalent in 2015 and 2016. CallForce explains that an agent may have a predominant strength in sales, but when, for example, a specific campaign comes to an end you could retain top performing staff by redeploying them somewhere else. “Versatility from a multi-skilling perspective is something that we see more and more. It makes the business more efficient and gives staff greater work satisfaction than dealing with the same product or service on a daily basis.” Apart from being multiskilled, there also is a requirement for emotional intelligence and the ability to grasp more complex contact centre tasks. The company explains: “There is more emphasis on intangibles like EQ; how agents are actually relating to their colleagues and their clients. No longer is it just about providing a service,
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throughout the whole industry.”
Unionisation Today trade unions are still an important force in South Africa, with 3.11 million
members representing 25.3% of the formal work force. The Congress of Trade Unions (Cosatu) is the largest of the three major trade union centres, with a
membership of 1.8 million. South African unions, however, suffering from declining membership numbers, aspire to expand their membership bases into
new growth sectors in the economy. That is why unions’ increasing interest in the
South African BPS&O sector could be seen in a positive light. It does, however, pose a danger for the industry.
Adcorp believes unions could have a detrimental impact on industry growth, as
South African labour laws tend to inhibit the growth of many sectors. “Unionisation
will be the ‘kiss of death’ for South Africa’s aspirations to be a competitive BPO destination. Luckily, the growth of the industry is not as fast as initially anticipated, so this is not a critical issue facing the industry.”
According to Quest, “there is a possibility that one of these days, anyone will be able to go on strike – employees won’t need a 51% quorum to go on strike. The
strike ballot has been imposed, as well as the change in labour legislation, so
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unions will continue to try to validate their position. There will be some challenges
impossible over the last six months. We have had learners at one of the leading
employees do not want to join them. That is why the unions are pushing for
October (2012), and are still not signed up. This situation is most frustrating, but
aid or pension.”
through Recognition of Prior Learning (RPL) programmes and learnerships that
for the unions, because the average union age is 45 years old and the younger compulsory membership, but the youngsters aren’t even interested in medical
South African banks that have been trying to register with the SETAs since we are persevering, because there are substantial benefits in upskilling our agents are available, both externally and internally.”
Labour Law Amendments There is careful optimism about the amendments to labour legislation, with the majority of respondents to this research anticipating a minimal impact on the
BPS&O and contact centre industries. Knowledge Executive’s discussions with a government department, however, suggest that the administrative burden of the new legislation can’t be ignored. A greater emphasis will be placed on managing contracts within time frames more prudently.
Adcorp does not believe the amendments to South Africa’s labour legislation is going to have a significant impact on the industry. “It is quite light when compared
to what the labour union Cosatu had in mind. Cosatu hoped for the outright banning of labour brokers, and this will definitely not occur. A change in the definition of the workplace, to enable unionisation even further, also will not occur. Cosatu’s hopes
that union canvassing in the contact centre industry would be simplified also did not materialise. There is an emerging consensus in government that labour laws and regulations need to be re-examined and not be made more restrictive.”
CallForce also believes the amendments to the legislation will have a minimal
Organisations are seeing the skills levy as a tax and not as an inherent requirement
to develop employees, according to Emergence Growth. “From that point of view it has been a failure. SETAs need to start developing partnerships with businesses
and consultants or services deliverers. A lot of red tape needs to be eliminated. The whole concept of learnerships needs to be revisited because it probably was one of
the best ideas that came out of the skills development act, but it probably caused the biggest hassles as well.”
Adcorp would not like to see the dismantlement of the SETAs – something
that seemed a strong possibility at the time this research was conducted. “The SETAs were for a long time the centre of the government skills strategy. It had two very desirable attributes. Firstly there was on-the-job learning, and secondly the training with industry-specific and tailored to the need of individual sectors.
Now the government is on the path of dismantling the SETAs in order to promote university style education through FET colleges.”
Like most of the respondents, Quest is concerned about the efficiency with the
provision of government incentives. In spite of this, they are still overwhelmingly
impact. “Based on the changes that are proposed, we will engage with both our
agents and clients on a slightly different contractual basis. The proposed changes
to legislation will create a greater need for companies like ourselves to provide greater support to companies in respect of labour.”
However, the “hype” surrounding the amendments has led to clients’ believing that
the industry is facing legislative difficulties. “When it becomes your perception, it becomes your belief. Our clients might start changing their strategies because they are concerned about how it is going to impact our business. We are under a lot of
pressure to communicate with our clients and make sure they understand that the impact is not going to be that significant.”
SETA and government standards There seems to be general despondence about the impact of government
incentives like the Skills Education Training Authorities (SETA). Most respondents
feel that the SETAs are not performing adequately, despite the potential they originally presented.
CallForce believes the SETAs are failing in terms of
communication. “Access to the learnerships and the RPL’s have been virtually
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“
Organisations need to step back and take a look at the work environments they have created. Human capital is responsible for up to 75% of the costs of running a BPO.
”
positive about incentives from the Department of Trade and Industry. “We are the
second largest contributor to the levies for Services SETA – we are an avid user of learnerships and it is budgeted in our finances. Government will, however, need to look into the double dipping taking place. There is a huge amount of
that taking place and there is no proper governance around it. The impact of maladministration is that we cannot build skills. We rely on learnerships, and this needs to be sorted out.”
In spite of this, Emergence Growth believes South Africa’s online and eLearning platforms leave much to be desired when compared with European and American standards. There still is a strong demand for face-to-face interaction. “Employees
still want to go to a classroom, with a lecturer telling them what to do. They don’t like self-directed training or learner directed training and people don’t like taking
responsibility for their own development and careers. They want someone to tell them when and how they should do it.”
Emergence Growth is also of the opinion that there is an increasing focus on training programmes that are globally recognised – and it is the employees who
are pressuring the companies into this direction. “SAQA is trying to sell all things
to all people and they seem to provide any organisation with accreditation when approached for it.”
CallForce believe it is difficult to utilise classroom training due to scheduling
Jobs fund None of the respondents had experienced assistance from the Jobs Fund,
whether through lack of communication or unsuccessful applications. Adcorp
has previously applied for assistance from the Jobs Fund, but was unsuccessful. “We came up with ideas that would create 500 000 jobs, and not one of those ideas were accepted.”
CallForce also was unsuccessful in their attempt to partner with the Jobs Fund. They applied for assistance for a skills development centre as well as an incubator
model for the development of inexperienced employees, both opportunities with
the potential to create substantial jobs. “To date we have not had any feedback on the applications.”
Quest applied for assistance from the Jobs Fund but has not heard anything “yet.”
Training and skills development
eLearning. ”It is difficult to take groups of contact centre agents off the phones.” eLearning gives the agent the opportunity to empower themselves and manage their own training. It is also a good measure of individual commitment and
interest in skills development. Often classroom training is viewed as a day off with the possibility of a nice lunch. eLearning programmes offers agents the
opportunity to invest further in themselves, in their own time. This displays true commitment.”
According to Quest, there is a lot of scope for online or eLearning in the industry. “Our younger generations do not enjoy classroom training. They want immediate, accessible, relevant training which is technology driven. Unfortunately, our
infrastructure is not yet suitable for eLearning – the time to process volumes is
a problem.” When it comes to training methods, Codrington believes the core mediums will become integrated, with a focus on collective learning.
With this approach, students still get the value of the “big lecture” in terms of scale, but also benefit from the interaction in small groups and social media. “If
you take this to the workplace and send someone to a course, where the content
All the respondents believe there is scope for online and mobile training in the
of the course is integrated into the work environment, technology will enable
eLearning remains a concern – especially for Adcorp. “Alternative delivery
components. Now we just need to integrate them.”
these channels effectively. To create gripping enthusiasm and excitement is
Temp, flex and permanent employment
human capital and HR sector of the BPO industry. However, the cost for quality channels have a lot of promise, but it turns out that it is very expensive to utilise expensive. The quality control is also a concern.”
CallForce believes cost efficiency actually is one of the main attractors of eLearning. “When you look at the state of the economy, clients are looking at
more efficient ways to conduct their training, so there is a big move away from classroom training on to eLearning platforms.”
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challenges, hence their preference for on the job training combined with
them to have a connection with everybody else on the course. We have all the
Temporary and flexible employment are good ways to reduce costs and increase
the focus on more important areas of the business. It gives companies the ability
to focus on their core business, and brings with it the transparency of overhead
costs, the flexibility of costs and greater employee satisfaction. “Flexible employment allows managers to match the staff compliment to business volumes
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of all stages of the economic and business cycle. In contrast to temporary or flexible options, permanent employment lacks flexibility. Excessive dismissal
protections also reduce work performance. The HR infrastructure overhead is also increased by permanent employees,” says Adcorp.
CallForce has a pragmatic view of temporary employment. “It provides a lot of flexibility around new campaigns, projects and seasonal work in the contact
centre environment. It also provides inexperienced people a nice opportunity to
move into the environment and prove themselves and then convert them into a permanent capacity.”
Emergence Growth believes negative media coverage and its association with labour broking hampers temporary employment. “Government needs to make
a statement and make it clear that they have to get all role-players in the same frame of mind when it comes to temporary employment.”
One of the HR services Emergence Growth provides is the provision of temporary
workers who assist during bottleneck periods. Some banks, for example, conduct their annual increase cycles at the same time as their bonus assessments.
“Companies do not want their HR departments to lose focus on what they should be doing and would rather outsource some of the number-crunching responsibilities
out to us. A lot of people would label this as labour broking, but we still employ
organisation is leaning towards a flexible or temporary workforce of 35% - 40%,
globally. It is not just at entry level, but at all levels. As companies start to contract and business cycles become less normalised, flexible workforces are becoming
normalised. The advantage is flexibility for an organisation. The other advantage
is the ability to create employee security, because you diversify skills and you can work through proper career pathing. It also aids risk mitigation from a cost perspective – it contains costs, helps with risk mitigation.
“The disadvantage is that there are some cases where there are two citizenships
in the organisation. The permanent workers are strategically informed, whilst the flexible workers are not and they don’t feel a part of the organisation. This also
has to do with the psychological contract that goes hand in had with temporary and flexible employment – if it is not socialised properly into the environment, there will be an ‘us’ and ‘them’ mentality.
“Permanent employment has a better psychological effect in terms of security. Access to benefits and credit facilities could also be an advantage, but productivity
lags due to a sense of entitlement. It also is expensive due to its fixed cost structure. Productivity is higher with temporary employment.”
these people. The negative is that many labour brokers or temporary employment
Information management
money, doing very little. They don’t train the employees, they don’t provide benefits,
Across all organisations, the focus is on turning data into actionable insight,
whether the person has to go and work under bad conditions. They take advantage
from data to business intelligence and analytics will affect the BPO sector in
services overcharge their clients. Temporary employment services make a lot of
they don’t make sure that their wellbeing is catered for, so they really don’t care
and Gartner predicts that this will remain the case through to 2017. This shift
of their employees’ desperation due to the high unemployment rate.”
particular. According to Quest, information is going to have to convert. “Business
On the other hand, both Emergence Growth and CallForce believe permanent
Intelligence and knowledge will become more pronounced and will have to
organisations are going to have to understand why things are happening.
employment is a good way to build a workforce and increase staff retention. “You
influence business decisions.
their development,” explains Emergence Growth. “A major disadvantage would
Where the BPO sector had to just provide call arrival stats and abandon ratios in
you have to jump through 1000 hoops to dismiss them.”
took place. “Your net promoter scores and point of contact is going to become
can hope they are in it for the long run, but you need to invest a lot of money in be that labour law could be draconian at times. Employees don’t perform and
The company believes there is a lot of potential in flexible employment. It is a
the past, now they will have to define the meaningfulness of the interactions that increasingly more valuable.”
good way to increase productivity. “Some of South Africa’s largest companies,
Apart from the commoditisation of certain core HR roles and services, Emergence
they pay for connectivity from home. Other companies have buddy systems in
employee administration services. “One of the things we have been saying for the
example, they would like to take time off from work to support their children at
human capital is a 1980’s thing. From 2000 onwards we have seen organisations
dependent on a certain extent of control from managers, as well as the maturity
their hands to focus on important, people related issues.”
like Multichoice and SAB, have good flexible working systems in place where
Growth embraces the centralisation of certain information management and
place which ensure that employees fill in for each other in instances where, for
last couple of years, is that HR needs to understand that the transactional side of
school events.” Emergence Growth warns that flexible employment’s success is
trying to reduce the time spent on transactional HR. HR should have more time on
of the flexible employees.”
20
According to Quest, flexible employment aids dynamic business cycles. “Every
MARKET INTELLIGENCE REPORT 2015−2016
21
HUMAN CAPITAL
International best practices Respondents noted that there are some international best practices that South Africa should not adopt, while others can’t be ignored. An example of
an international best practices that did not work in the South African market is
Voice Recognition technology. It was a failure due to the variety of accents in
the South African market, explained Quest. “The segmentation model of our country’s demographic is completely different – that’s why we cannot duplicate international best practices.”
tremendous effect on employee performance and is one of the key drivers of attrition, as people are not properly measured or incentivised.”
In spite of Adcorp’s take on this, CallForce sees a big swing towards incentive
based remuneration. “You offer a less guaranteed salary, but greater upside on
making sales or delivering specific service levels. This requires the employee to invest as well, so it boils down to co-investing. It drives the right behaviour.”
Employee engagement Employee engagement was a buzzword amongst many respondents during
Outsourced Home Agents to Double
our research – especially when they were asked about workforce optimisation
strategies. Harter et al (2002) defines employee engagement as: ”…the individual’s
involvement and satisfaction, as well as enthusiasm for work” and occurs when
One of the key trends driving the Business Process Offshoring &
employees are emotionally connected to others and cognitively vigilant.
and agile solutions for the contact centre. Customer as well as
Adcorp believes self-management is a good way to increase employee engagement.
working from home in decentralised contact centres may be the future.
of clear performance goals and measurements. The traditional model of one
home agents will double by 2015, thanks to innovations around security
The company also believes self-management is a good way to optimise the
Outsourcing (BPO&O) industry forward beyond 2015 is more mobile employee expectations are based on flexible choices. Remote agents
“Employees can only be engaged if they have minimal management in the context
Industry analyst firm Ovum predicts that the number of outsourced
person who supervises 12 people is just old fashioned and counter productive.”
and vertical market expansion. South Africa is especially well suited to
performance of the workforce.
provinces. Skilled workers in different areas dealing with customers
CallForce undertakes an annual survey amongst their employees to gauge the
having to build contact centres in each area.
make assumptions about what makes employees happy.”
at-home agents due to many different languages spread over various in their preferred language is possible with the remote model without
levels of job satisfaction in the organisation. “The biggest danger is when you
Through their surveys they have learned that recognition through further training Quest believes international best practices that the local market should not ignore
include vendor management and MSP, shared risk modelling and consolidating
suppliers. “(With the latter) you aggregate spend you share in the risk reward and you increase your rate of return. This is not possible if you have multiple suppliers.”
Employee benefits and remuneration
organisation. Apart from salaries, medical benefits and pension, scope for further
empowerment through the availability of study loans and study leave is also very important amongst the agents at the organisation.
Emergence Growth is a follower of the Aon-Hewitt Employee Engagement model, which identifies the key aspects of employee engagement that underpin employee
commitment. The company undertook a continent-wide employee-engagement
Companies have been talking about performance related pay for a long time and
survey, and made some surprising findings. One of the findings was that Africa’s
been battling to tie down the right performance measures that provide the right
par with Latin America.
to take the leap they need to take away from basic unstructured remuneration
“Europe and America was far harder hit by the global economic meltdown than Africa
two trends have emerged. Adcorp explains: “The first trend is that companies have incentives for performance. The second is companies have been very reluctant
employment engagement index is higher than America and Europe, and almost on
towards incentive based pay.
was. During a global meltdown employee engagement is high, because you don’t
Performance related pay was a very exciting prospect in the industry, but few
the meltdown, and you haven’t received a pay increase or performance bonus over
companies have actually taken it on board in a successful way. This has a 22
and skills development initiatives is one of the key drivers of engagement in their
know where to go and you hang on to your job. Once your country has shifted out of the last two or three years, the index starts dropping.”
MARKET INTELLIGENCE REPORT 2015−2016
23
HUMAN CAPITAL
Quest is concerned about a lack of wellness initiatives, having a detrimental impact
data and results-orientated as opposed to a general good feeling of everyone is
abuse, absenteeism on the rise – there has to be greater investment, but not just
of their clients by eliminating complexity in the workplace. They measure their
sure our people have a purpose, that they have power and control in resolution.
that companies’ HR departments focus more on growth. We could be seen as
created. They need to keep track of absenteeism and attrition, because institutional
an engagement and partnership model. “We work closely with our clients and
experience a sense of inclusiveness – it is very important to provide employees
How do you structure your business without contaminating it? How do you make
responsible for up to 75% of the costs of running a BPO. “You have to make sure
transactional supplier is over, and clients are coupling on to that.”
that you are managing your attrition as good as you can. It also comes back to
Future service offerings/innovation
on employee engagement in the industry. “We are seeing a greater incidence of drug
doing okay.” Emergence Growth believes they are engaged in the strategies
monetary investment. We have to pay more attention to career progression, make
success by monitoring their clients’ growth. “Most of the time we just ensure
Organisations need to step back and take a look at the work environments they have
a second tier growth strategy.” Quest stays engaged with their clients through
knowledge is being eroded. “We are dealing with a generation who wants to
make sure that we innovate – innovation is a big thing. What is a global learning?
with a sense of belonging in our quest to keep them engaged.” Human capital is
sure you are innovative and follow trends that are relevant? The days of being a
that it works. That your scheduling is aligned to the strategy of the business and your strategies of career management and employee engagement.
“
Knowledge Executive was encouraged to see that most of the agencies interviewed
Most of the agencies interviewed are responding to challenges with a high level of innovation, something that South Africa has a proven history of doing well.
”
“One way to optimise your workforce through positive engagement would be to
accommodate their lifestyles. We need to recruit people for lifestyle shifts. There could be nurses looking for extra work, willing to work night shifts in contact centres. Another factor we need to consider would be mothers, who would be willing to work
for four-hour shifts until they fetch their children. These are trends that Europe has adopted, but we still have a long way to go in this regard.”
Africa has a proven history of doing well.
Adcorp plans to further grow their Emergent Business Division, which is said to provide the business with “a continuous pipeline of innovations.” This division is aimed at “ventures with unknown prospects of success, but high strategic value.”
Emergence Growth is placing a lot of emphasis on the commoditisation and
transactional side of HR with their service offerings, starting with Quick HR, an electronic information management programme. Another non-traditional HR
product that Emergence Growth has launched is known as QuickSkills, which focuses on job evacuation, grading and skills.
Engagement in client-strategies
In terms of non-traditional HR models to be launched in the near future, Quest
For this year’s intelligence report, Knowledge Executive was particularly
with their clients. “We aim to see lots of consolidation in terms of master services
interested in client-service provider engagement – a question that was answered (unintentionally) by many respondents when they pointed out that more and more companies are questioning the value-add of their partnerships with HR and human capital service providers.
“It is a continuous process of becoming proactive around your client’s business
plans to have a stronger focus on partnership models than transactional models
providers. Consolidating rate cards, more cost efficiencies, better standards and
governance. Looking at compliance and risk mitigation, we aim to launch a Master Service Provider (MSP). It comes with a technology platform that does a substantial amount of consolidation, line of sight of spend, procurement of spend of resources, vacancy rates and speed to fill. It will feed into companies’ ERP systems.”
objectives, including growth, but also other aspects like profitability, return on
Other systems that Quest was looking into at the time of writing, was Vendor
implementation of its new ERP system will aid in their engagement with internal
where value added activity can be screened. Adcorp plans to introduce a
investment and return on capital,” Adcorp explains. The company hopes the and external stakeholders.
CallForce continuously measures the impact of their partnerships by monitoring
their partners’ bottom line. “We compare our agents’ sales with sales by the
workforce of the client. The environment in which we operate is becoming more
24
are responding to challenges with a high level of innovation, something that South
Management Systems (VMS) and Recruitment Management Systems (RMS) customised ERP system. The company is said to have invested over R100 million
in this platform last year. At the time we conducted our interviews, CallForce
planned to introduce a new candidate management system and an HR app. “The
HR app is aimed at communicating more effectively and engaging with both our agents who are deployed at clients, as well as our candidates who are prospective
MARKET INTELLIGENCE REPORT 2015−2016
25
HUMAN CAPITAL
employees.” Quest uses a CRM application that is linked to various enterprises to communicate with their stakeholders. “We also have client and candidate portals, some of which we developed ourselves and others we procured. We also have SkillStream and PeopleFluent, which is a modularised system which focuses on MSP, vendor and resource management.”
Screening tools and Social Media There was an expectation that screening tools would make human interaction and error obsolete during the recruitment process. According to Adcorp this expectation did not materialise and it turned out to be much more complex and expensive than they had expected. Social media platforms are used in the white-collar market, while blue-collar groups are targeted through SMSes. “LinkedIn, CareerJunction and Facebook offer self-management career options,” Adcorp says. “Years ago it looked like companies would try and succeed to develop career paths from the centre. Today, we realised that career paths involve so much individual complexity that they cannot be centrally managed or orchestrated.” CallForce utilises a referral program for the screening of over 50% of their employees and is happy with the results from this system, but they believe lack of customisation between screening and assessing candidates in different industries is problematic. “There is a problem with consistency. You can’t think that someone in the petroleum industry is going to have the same profile as someone in the cellular industry. The same applies to someone with a collections background, versus someone with a sales background. Culture fit is also an aspect that has to be incorporated into the screening process.” Emergence Growth also believes social media continues to be on the rise, with LinkedIn playing a predominant role in this regard. “There are some good pages, and some bad ones. I think the bad pages tend to be marketing pages where all the organisations do is to market what they do. The good pages are the ones that are informative.” Quest believes social media is on a growth path, but the use of it needs to be defined more clearly. “It has to be clearly defined per organisation. If I look at Quest, it is multi-channel for us. We need to recognise that dichotomous economy – we have a developed and developing sector. Most of our workforce comes from the Third World, and a lot of them still need to have the traditional communication channels.”
26
youth
training
placement
career
HUMAN CAPITAL
According to Graham Codrington, Businesses should not lose sight of eight global forces (see below:)
Technology
Google Glasses, augmented reality 3D Printing Driverless cars
THINK DIGITAL, MOBILE, SMART,
CONNECTED CAPITALISE ON SKILLS THAT
Women in Leadership
NEED FOR FEMALE MIND-SETS – not women imitating male mind-sets
COMPUTERS CAN’T DO OR REPLACE
AFRICA SHOULD LEAPFROG INTO
3G AND 4G CONNECTIVITY. Globalisation
Globalisation of talent Search for cheap, skilled labour
OFFER QUALITY
Increased life expectancy
SUPERIOR TO SOUTH EAST ASIA.
CAPITALISE ON
yearly increase in
TIME-ZONE, ENGLISH ACCENTS SKILL
WORKERS CORRECTLY – CREATE EMPLOYMENT AND EMPLOYABILITY.
Entrepreneurs
Driven by unemployed youth and “retired” workers
OUTPUT-BASED
400% 100
year-olds
Generation gaps
Open space offices,
REMUNERATION
FOR MORE INNOVATION,
Virtual, temporary, 24/7 teams
Linked up to entrepreneurship, technology and its required approaches
OF COMPETITION REQUIRES
STRONGER DIFFERENTIATION
THAN EVER BEFORE AND REDEFINES THE WORKFORCE.
28
different expectations and approaches thanks to generation gaps
DISRUPTION.
GLOBAL SCALE
AND GROW DIVERSITY IN YOUR WORKFORCE. DON’T UNDERESTIMATE
THE POTENTIAL AND
EXPERTISE OF
AN OLDER WORKFORCE.
KEEP AN OPEN MIND AND BE ACCOMMODATING TO DIFFERENT
BE ON THE LOOK-OUT Global availability thanks to virtual connectivity
ENCOURAGE
Africa’s time has come
EUROPE IS STAGNATING
APPROACHES AND
PERSPECTIVES.
INVEST IN, DEVELOP AND EMBRACE THE POTENTIAL
AFRICA
HAS TO OFFER OR BE LEFT BEHIND.
MARKET INTELLIGENCE REPORT 2015−2016
29
HUMAN CAPITAL
For ease of reference a consolidated version of all of the data on agent salaries has been provided below for your comparison. The table below presents an overview of the results from a national perspective. An analysis of the agent salaries by each province and by job function is included in this section after the main table.
AGENT SALARIES BASED ON AGENT TYPE AND PROVINCE PROVINCE
MEDIAN SALARY
LOW
HIGH
MEDIAN SALARY
LOW
HIGH
R 3 600
R 3 200
R 4 000
R 5 350
R 4 200
R 6 500
Gauteng
R 7 650
R 3 300
R 12 000
R 9 200
R 4 400
R 12 000
Kwa Zulu Natal
R 5 133
R 4 500
R 5 900
R 5 800
R 5 000
R 6 500
Western Cape
R 5 584
R 3 300
R 8 300
R 7 360
R 6 500
R 9 300
R 12 000
CUSTOMER SERVICE INBOUND - 0 TO 1 YEAR
R 7 850
R 4 200
R 12 000
CUSTOMER SERVICE INBOUND - MORE THAN 1 YEAR
MEDIAN SALARY
LOW
HIGH
MEDIAN SALARY
LOW
HIGH
R 6 081
R 4 000
R 8 162
R 8 094
R 6 500
R 9 688
Gauteng
R 8 103
R 4 500
R 15 000
R 9 897
R 5 500
R 16 000
Kwa Zulu Natal
R 6 925
R 3 800
R 13 000
R 8 175
R 4 000
R 14 625
Western Cape
R 6 335
R 3 000
R 11 000
R 8 105
R 4 500
R 15 000
PROVINCE
MEDIAN SALARY
LOW
Eastern Cape
R 5 239
Gauteng
R 8 025
Kwa Zulu Natal Western Cape
PROVINCE
MEDIAN SALARY
LOW
Eastern Cape
R 5 567
R 4 000
Gauteng
R 8 659
R 7 000
Kwa Zulu Natal
R 7 675
R 3 800
Western Cape
R 6 705
R 6 500
PROVINCE
MEDIAN SALARY
LOW
HIGH
MEDIAN SALARY
LOW
HIGH
Eastern Cape
na
na
na
na
na
na
National
R 6 861
R 3 825
R 11 791
CUSTOMER SERVICE OUTBOUND - 0 TO 1 YEAR
R 8 698
R 4 000
R 16 000
CUSTOMER SERVICE OUTBOUND - MORE THAN 1 YEAR
HIGH
MEDIAN SALARY
LOW
R 4 000
R 6 478
R 6 973
R 6 500
R 7 445
R 3 500
R 15 000
R 9 625
R 5 000
R 16 000
R 6 380
R 3 000
R 13 000
R 7 305
R 3 500
R 14 625
R 7 061
R 3 000
R 15 000
R 8 431
R 4 500
R 17 000
R 7 330
R 3 000
R 15 000
HELPDESK AND IT INBOUND - 0 TO 1 YEAR
R 7 694
R 3 800
HIGH
R 8 849
R 3 500
HIGH
R 17 000
HELPDESK AND IT INBOUND - MORE THAN 1 YEAR
MEDIAN SALARY
LOW
R 7 134
R 7 594
R 4 500
R 11 502
R 13 000
R 11 278
R 7 000
R 16 000
R 13 000
R 7 675
R 3 800
R 13 000
R 7 732
R 8 755
R 6 500
R 13 000
R 13 000
SALES INBOUND - 0 TO 1 YEAR
R 9 879
R 3 800
HIGH
R 16 000
SALES INBOUND - MORE THAN 1 YEAR
Gauteng
R 6 800
R 4 000
R 9 000
R 7 600
R 4 000
R 12 000
Kwa Zulu Natal
R 6 400
R 3 800
R 9 000
R 6 963
R 3 800
R 10 125
Western Cape
R 5 063
R 3 333
R 7 048
R 6 054
R 3 500
R 12 000
National
The thinking force behind your success
R 3 200
PROVINCE
National
2013/08/29 8:30 AM
R 6 515
Eastern Cape
National
MDU-928 Career Call Salary Survey 2013 Paths.indd 1
COLLECTIONS - MORE THAN 1 YEAR
Eastern Cape
National
The thinking force behind your success
COLLECTIONS - 0 TO 1 YEAR
R 6 305
R 3 333
R 9 000
SALES OUTBOUND - 0 TO 1 YEAR
R 6 884
R 3 500
R 12 000
SALES OUTBOUND - MORE THAN 1 YEAR
PROVINCE
MEDIAN SALARY
LOW
HIGH
MEDIAN SALARY
LOW
HIGH
Eastern Cape
na
na
na
na
na
na
Gauteng
R 6 542
R 4 500
R 9 000
R 7 500
R 4 500
R 12 000
Kwa Zulu Natal
R 5 500
R 3 000
R 6 500
R 6 771
R 3 000
R 7 313
Western Cape
R 5 238
R 3 800
R 6 792
R 5 698
R 3 500
R 7 709
National
R 5 672
R 3 000
R 9 000
R 7 273
R 3 000
R 12 000
TRAINING & SKILLS DEVELOPMENT One of the critical challenges facing the South African economy is unemployment, with job creation earmarked by the National Development Plan as a key growth area. Central to this challenge is up-skilling the population, and ensuring the relevant skills initiatives offer practical benefits – which will ultimately strengthen the economy. Professional skills development and training is a highly-competitive sector, and thus trainers, government and corporates need to bargain collectively for the long-term benefit of potential contact centre agents, to ensure a more competitive value proposition for the industry.
32
MARKET INTELLIGENCE REPORT 2015−2016
33
TRAINING & SKILLS DEVELOPMENT
“ South Africa has one of the most comprehensive national skills development systems in the world, and yet the unfavourable schooling system, unemployment
and skills gaps need to be addressed if the country wants to improve its ratings as a competitive, business process outsourcing & offshoring (BPO&O) destination.
Global trends indicate that classrooms are fast becoming obsolete, however in a South African context there will always be a need for classroom-based, instructorled training which works well for practical experience coupled with eLearning which works well for theory.
Apart from the skills development legislation, South Africa now has additional
”
national mechanisms to accelerate skills development, such as the National
Skills Development Strategy (NSDS) and the Joint Initiative on Priority Skills Acquisition (JIPSA), but industry pundits believe more is required.
Online and eLearning skills programmes continue to gain ground in the training and skills development sector, with all key players surveyed by Knowledge
Executive from this sector viewing the growth of this training medium positively,
although this sector (online and eLearning) will unlikely replace classroom
training in the short to medium term. Surveys were conducted with the following organisations:
▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Contrary to the established government position that bridging colleges are no
longer needed in South Africa, Knowledge Executive noted a general consensus from the respective discussions on skills, that many school-leavers are not equipped with sufficient skills in numeracy and literacy to sufficiently handle
business process outsourcing (BPO) posts. This is not an indictment on the quality of the potential graduates, however, as many skills analysts have declared the intelligence levels of our graduates to be excellent. This coupled with training
and personal ambition bodes well for the future of BPO and contact centre growth domestically.
Bytes People Solutions
Trends in technology: eLearning and digital
Contact Centre Academy
Innovation in technology has undoubtedly shifted the paradigm in how skills are
iFundi
particularly within South Africa, both skills service providers and contact centre
People Solutions
to reconcile the heavy costs that threaten in-house training. Siyandza, one of
Careerbox
Harambee Youth Employment Accelerator
accrued. eLearning has facilitated massive cross-border skills transfers, but
IQ Business Group
operators on the supply side will have to embrace modern training methods
Siyandza
South Africa’s leading training providers in the sector argues that the shift has already moved much more into formal eLearning and this can be ascribed to the global economic climate, which led to a trend where many training and skills
development programmes became more compressed. Siyandza believes this trend of compression has also branched out into the classroom.
“Business understands the need for instructor-led facilitation, because you can’t just have all your training done on digital platforms – it won’t work. They want
you to compress the classroom time to as little as possible. In general, everyone is getting more on board in a sense that eLearning works well for theory, and classroom works well for practical experience,” says Siyandza.
Although global trends suggest that classrooms are fast becoming obsolete, those interviewed concur that in the South African context there will always be the need for classroom-based training for specific things. There might be quality concerns involved with this approach, but quality can be monitored by carefully managing training programmes.
34
MARKET INTELLIGENCE REPORT 2015−2016
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TRAINING & SKILLS DEVELOPMENT
iFundi believes a combination of online or eLearning with classroom training will be
the group says. There is a strong trend, and movement away, from skills garnered
of the future. According to iFundi: “It’s becoming increasingly sophisticated and
Contact Centre Academy says where historically, skills were empowered from
replace. eLearning supports delivery by making it more user and student friendly.
the experiential element that characterises today’s seminar style learning, the
half. It is already starting to happen with good brand names, but it’s still too high.
conferences, seminars and forums etc. As a ‘knowledge centric’ approach,
the most effective way to approach training and skills development programmes
through a ‘course centric’ approach, towards a ‘knowledge centric’ approach.
relevant, but we think it will be more there to support contact learning, rather than
a single source – material was ‘said over’, and subsequently learnt – without
To become real, the prices of tablet PCs and mobile devices will have to drop by
trend espoused by the academy implies access to various facilitators, contents,
Once this happens - within the next two years - we will see mobile and eLearning
employers tend to empower learners with the tools for them to bolster their own
gathering a lot of momentum.”
knowledge – and perhaps become ‘bigger’ than what the role demands.
According to People Solutions, there is a huge demand for eLearning by
In addition, the shift in platforms and self-management will play an integral part
means of imbuing skills. The conundrum however, is that the Sector Education
and identify what skills you need for a particular job is critical. Subsequently,
you cannot receive a qualification through an eLearning platform. The others
upload your results will empower the individual and give the e-learner more
employers, who see the system as a long-term cost saver and more efficient
in this learning approach. The ability to self-manage your learning development
and Training Authorities (Setas) do not recognise eLearning – and as such,
being able to source the training content online, download it, go through it and
interviewed empathise with the employers – who are searching for ‘friendly’
independence.
resistance from institutions such as the Services Seta – who place the demand
The changes (and by implication, benefits) are both in terms of accessibility –
ways of raising the standard of skills in this country, and are met with a tacit upon employers as to how they ought to be training their prospective employees.
“
hungry for interaction, which technology brings, but South Africa has still not yet made the complete transition from the “old-school” facilitation to blended learning
Self managing one's learning environment and identifying what skills you need for a particular job is critical. Sourcing the training content online, downloading and going through it, and uploading results will empower the eLearner.
”
Careerbox concurs with the positive sentiment generated by eLearning – although
they do caution the ultimate effect an eLearning system can have in South Africa with the present data prices. Data is still expensive relative to Europe and North
America, and in particular, with poor accessibility in non-metropolitan areas – it is
somewhat more difficult for corporates to access prospective employees, which may result in a lower skills uptake, purely based on inaccessibility.
The IQ Business Group is careful to talk about the possibility of eLearning developing into a substitute for classroom training and – like iFundi – they anticipate
that learning platforms will become more integrated between the classroom, the
digital space and on-the-job training. Knowledge Executive believes this trend will likely hold well with younger generations as they can engage and interact with the learning device or person. This will also involve game-based learning,
where people use the computer game principle and look and feel by applying
it to learning concepts. This appeals to the mindset and learning approach of
generations X, Y and Z. IQ Business Group also expects the incorporation of mobile
devices will play a big role in the further development of eLearning. “We will see a
lot of mobile learning, but we will also see other media like interactive television,”
36
and more importantly functionality, says the IQ Business Group. Learners are
methodologies and experiential learning models. One of the biggest challenges
locally is the integration of skills. Technology can ultimately deliver this integration, but at a cost – as “training the trainers” will put significant pressure on the industry.
Training models: metrics matter This cost pressure associated with training, our research suggests, will continue
to stifle the industry. Historically, cost pressure has restrained appropriate skills
development and the failure to create a metric for skills and HR could ultimately lead to cutting skills training entirely. Knowledge Executive has found that this impasse will force training providers to look differently at their models – including indicators such as cost of delivery, speed to market, methodologies, and content.
People Solutions concur that a relook is required. The company echoes the
frustration that corporates are reluctant to take partial “ownership” in the skills training process and argues that the reliance on government funding, and subsequent failure to act is costing not only potential jobs for unemployed South
Africans, but commercial revenues too. According to People Solutions: “If we could just get organisations to calculate what it is costing them not to invest in
their people and training properly, then we could justify the spend that is required.”
Industry leaders concurred that whilst there needs to be a return on investment (ROI) for training – the investment risk can be offset by longer-term contracts, as it is oft-debated. Harambee believes training providers should distinguish between government-issued education certificates, and the learning potential exhibited
MARKET INTELLIGENCE REPORT 2015−2016
37
TRAINING & SKILLS DEVELOPMENT
by the South African youth. It is the industry’s responsibility, says Harambee to
Like Siyandza too, the IQ Business Group sees an increasing number of
individual rather than creating their own misguided yardsticks of required skills.
fund and the jobs fund. The group argues that companies are attaching more
educate the corporate community about how to measure potential value of the
Statistics from Harambee do articulate certain failings of the school system, and certain trends emerge of the 35 000 youngsters profiled as to what challenges face the typical young person not able to presently access the formal economy: ▪ ▪
SA Citizen average age of between 18-28.
25% come from households that have no grant or formal income (and additional 19% do come from a household that receives a basic grant).
▪
In these households, one working person on average is supporting 6.2 other people.
▪
They do have matric, but on a retail numeracy test that would be set on about grade 6 level, there is a 50% failure rate
value to accredited content, like the South African Qualifications Authority (SAQA) accreditation with the relevant Seta. Whereas in the past that wasn’t
so important, now it is becoming increasingly important. The other driver behind this are companies’ Broad Based Black Economic Empowerment (BBBEE) scorecards, where points are awarded for employees put through learnerships and skills programmes.
Skills shortages: addressing human capital challenges There are myriad challenges facing the twenty-first century South African
Harambee counters, however that on the learning potential test (measure of
economy. The first ANC-led democratic government of 1994 inherited an economy
employers rely on the standard tests as a measure of learnt knowledge, we aren’t
where resources (electricity, water, education) had primarily been allocated for a
fluid intelligence) we see above average learning potential - to the extent that
near recession, devoid of capital reserves, isolated by the global economy –
going to bring young people into the roles.
small minority within the population. One of the core sectors adversely affected
Harambee states: “We can’t continue to measure learnt knowledge, we have to
the sectors noted during our research, one of the biggest human capital threats
how to break through that. While we can’t wait for the education system to solve
level trainees, agents and employees receive between grades 1 and 12 (South
and requiring redress is the basic education sector. As respondents from most of
look at assessments that measure inherent potential. We have to understand
facing the BPO&O industry as a whole is the substandard education that entry-
itself, we have to be quite clear on what the starting point actually is.”
African primary and secondary level).
Outsourcing your training: the benefits and pitfalls
A primary concern about this amongst the organisations that spoke to Knowledge
Many of the training providers and consultants interviewed by Knowledge
Executive is work readiness levels. Very few of the potential and entry-level employees grasp what is required from them to make valuable contributions to the companies that employ them.
Executive were of the opinion that more and more companies tend to insource
According to one organisation that chose to speak anonymously: “the level
are also taking advantage of the grants and other funding mechanisms made
understand what it takes to be successful in the workplace. We actually created
their training and skills development programmes. While this is happening, they available by the Setas, Siyandza explains.
When it comes to the relationships between the companies and their training and skills development service providers, iFundi makes a clear distinction between
companies with mature relationships with service providers, and those who don’t. Their approaches to these types of clients seem completely different.
According to iFundi, “The new companies learn by doing. A training provider can
of schooling these employees receive is not good enough and they don’t a work readiness programme to address those needs, but we think besides basic
schooling not being adequate, that not understanding how to be successful in the corporate environment is a big risk for the industry.”
“The very first time we rolled out a work readiness programme, it was aimed at the
top 200 graduating engineers in South Africa. None of these students understood what it meant to work for someone else.”
help the companies that are new to the concept of outsourced training to find their
In addition to the local challenges, there is a clear movement in the skills sector
are less complicated in a sense that they know how to build learnerships into their
the IQ Business Group, who suggests there will be implications for local skills
way in an area that is quite complicated. Companies with established relationships business models.”
38
companies that fund training programmes through the Setas, the national skills
globally from a demand for manufacturing to services. This is according to suppliers – as we have a real shortage of good service skills in South Africa since
MARKET INTELLIGENCE REPORT 2015−2016
39
TRAINING & SKILLS DEVELOPMENT
historically South Africa has been known as a strong manufacturing supplier.
start to think about skills development for supervisors when there is a shortage.
pressure on a) the corporates and b) the skills suppliers to ensure the adaptation
and staff planning,” says iFundi.
“We are rapidly trying to play catch up,” says IQ Business. “This implicitly puts is smooth and transient. To do that (shift the skills emphasis to service-orientated
from manufacturing), we have to go back to the foundations – the schools, the
In the research conducted, all the major training providers informed Knowledge
know, from research, that the literacy and numeracy in the average corporate
active leadership development, which in turn, will reduce the amount of head
universities – and we are going to have to address this. In South Africa we management level is the same as grade ten. In the service environment, we
would expect that an entry level to be at the level of matric or higher. It’s a massive pressure bearing down on us because we have so much catch-up to do.”
Careerbox concurs saying it’s a bigger issue than just formal education. “There is a gap between the understanding and expectations of young people entering
the workforce - especially in the service industries - and what the market needs
and wants. With or without a matric certificate, the gap represents an attitudinal
mismatch. We can work with this. Remember that in disadvantaged communities the reason for not matriculating may have been extraneous – environmental and
economic factors – not necessarily due to a lack of competence. We reach out to
Executive of the importance of identifying untapped leadership potential and pro-
hunting taking place in the industry. This will become an important trend to watch in 2015 and beyond.
IQ Business summaries the quandary as follows: “We need to convert the potential of the entry-level workers into the right functional skill. We have significantly large
and untapped skills potential. We are flooded with matriculants and graduates who can’t find employment and even with people who leave school before matric
(graduating from high school). The talent is there and it is not their problem, but
ours. We need to hone that talent and create a sustainable supply of skills. This will also address the issue of poaching.”
these young people and equip them with the talk-savvy service skills required in
Furthermore, the IQ Business Group also believes a shortage in specific language,
and the start of work. We aren’t seeing employers filling that gap.”
shortages – and missed opportunities – in the local industry.
contact centres. This is where the primary gap is – between the end of education
Apart from the issue of work readiness, Siyandza is of the opinion that the
technical and analytical skills to service offshore clients could lead to further skills
as prevalent amongst agents as most stakeholders would like to believe, with
Developing skills – catering for the individual
industry.
South Africa’s unemployment rate is a staggering 25.6% according to Statistics
“We need to distinguish good contact centre agents from agents with good
backgrounds – diverse ethnicities, languages and cultural upbringings. The skills
substandard education-related skills shortage perceived by the industry is not leadership identification and development being the most crucial issue facing the
leadership skills and develop the agents with leadership skills. Companies can easily develop them into supervisors and managers. There are plenty of courses
and providers, and plenty of in-house training programmes and mentoring that can be done to up-skill and qualify leadership in the contact centre.”
South Africa. At the same time, those unemployed come from different experts share consensus that we cannot embrace a ‘one size fits all’ approach to
skills training locally. Some personalities are better suited to the services sector,
others to production, and yet others demonstrate an aptitude for sales. It is critical for skills trainers to be cognisant of this when trying to place candidates.
iFundi believes poaching is becoming one of the main symptoms of the skills
Harambee suggested that as skills trainers, they had to bring the employers along
saying they can’t find good people. Conditions are severe in a sense that South
manage the career expectations and “journey management” of the prospective
shortages the industry seems to be experiencing. Everyone justifies this by
Africa has foreign investors coming into the market and all of a sudden business as usual is not working any more, with different skills and standards. There must
be targeted interventions, says iFundi otherwise we are going to have serious problems as the industry is getting very, very tight.
Apart from poaching, iFundi believes the industry is suffering from a lack of leadership skills, rather than only skills shortages. The onus for this is placed on a lack of succession planning. “We do not take a pro-active approach and only
40
At that time they are needed at an operational level, so there is a lack of career
on the structural gap on the education front. Additionally, trainers have to better employees. Here, career guidance is necessary – the individual cannot view their
role or job as simply a means to put food on the table, but rather as a platform to develop and grow. “This is an approach that would encourage their own skills
development, and we know that South Africa is in dire shortage of skilled workers and managers – which this holistic process would facilitate an increase thereof,” says Harambee. “The type of person who succeeds in a restaurant and the type
of person who succeeds in a contact centre are not the same type of person.
If people are journey-managed properly, the high levels of attrition and lack of
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TRAINING & SKILLS DEVELOPMENT
progression will decrease – pull people through not just entry-level roles but through team leader and management roles. Additionally, we need to recognise that increasingly results-oriented training is important, and that we have to measure our work on retention – not just on training and placement.”
The issue needs to be addressed early – expectations have already been defined as a person moves into his or her 20s. People Solutions questions how we can raise the issue at school-level – where the problem starts. Here there is “definitely
a gap in terms of vocational guidance”, and as an industry – we need to take responsibility for ourselves. Therefore People Solutions implores employers (and by implication the skills trainers themselves) not to be reliant on government – and as an industry embark on new work-readiness campaigns at schools. Targeting schools, says People Solutions, will certainly benefit the industry in the long-term.
The drivers of high attrition rates The consensus gathered from top domestic trainers is that contact centre operators change jobs because of uncertainty, better career opportunities and
Types of training programmes In the light of the fact that the majority of the training and skills development sector
is concerned about the work-readiness of entry-level employees, work readiness
programmes are high on the priority list. Employees tend to lack an understanding
of basic workplace principles, like employee-supervisor communication or general communication in the workplace, appropriate work attire and punctuality.
If for instance, an employee can understand what it takes to be successful in the
industry, then he or she will be more successful in the long run. The employee will know how to interact with supervisors, why someone is telling him or her to do things, what stresses people are facing and what the overall goal of the business is.
“
Upfront training is gaining ground. Companies want their agents to be prepared by the time they arrive at the workplace so that they do not have to interrupt their productivity for training at a later stage.
lack of work readiness.
According to Siyandza, “not understanding what is expected of one when one
starts working is the biggest challenge. They think it is going to be easy, only to realise that it is a hard job to do and then they don’t stay very long.” In general, and from the research conducted, most training providers ascribe attrition in the industry to four factors: 1. Fit (within the work environment); 2. Generational factors;
3. Career development, and 4. Remuneration.
Firstly, they believe agents leave contact centres because the work environment is the wrong fit – they do not experience a sense of belonging. Secondly generational factors play a role, because younger people strive towards career opportunities and “move around” to gain experience. Thirdly, Generations X, Y and Z don’t only look at what a company can offer them in terms of career development, but what they can offer the company – and that includes a good, sound candidate for with a career, goal-oriented mindset. However, the most common driver of attrition is remuneration: “People will move quickly for little more, simply because we live in a materialistic environment and the young generation will look at the next best opportunity and move,” says the IQ Business Group.
”
Siyandza explains that as long as you cover the contact centre basics, performance standards, the handling of complaints – those are the biggest classroom courses.
In terms of the work readiness of inexperienced workers iFundi is seeing a trend of upfront training gaining ground in the industry – a trend where work readiness
most probably also plays a substantial role. Companies want their agents to be prepared by the time they arrive at the workplace, so that they do not have to interrupt their productivity for training at a later stage.
For the training of experienced agents, the organisation utilises a brokerage
format for the training services they provide. The experienced operators can’t afford to stay away from work for extended periods. Online training is definitely going to become more common in this regard, and it will be blended with inperson training.
All the training providers agreed that there is an increasing need for an integrated, framework based learning approach “where people are equipped with all the
content based knowledge they require.” But then when they need to learn to
apply that content and build skills within a framework, so they have to think and integrate all these skills instead of being pulled through by script or procedure.
A recent Learning and Development (L&D) Benchmark Survey conducted by the IQ Business Group found that there is not enough on-the-job training taking place
in environments in which L&D should be ongoing and where it is costly and difficult
to take people off the floor to attend classroom based training. "Specific focus
must therefore be placed on learning application in the needs analysis stage,
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TRAINING & SKILLS DEVELOPMENT
design stage and delivery stage to develop programmes and interventions that
enable effective on-the-job training that delivers improved business performance and that allows career progression for the learners," says the survey. "Companies
need to include the use of knowledge management tools, performance support tools, talent management tools, simulations and multiple delivery channels to
complement the current tools set in their learning architecture to enable blended and open learning in the true sense of the term."
One of the key enablers of framework-based learning is using simulation as a
tool. In 2015 and 2016, expect to see more different types of simulation based training being utilised. This includes script-based simulation training and live
simulation, where one actually has to exercise what they have been taught using scenarios that are created to try and replicate the live environment.
International trends and best practices
New programmes/innovation Based on the research conducted, and global surveys, Knowledge Executive can confirm that more South African training providers will bring in internationally recognised training and skills programmes in 2015 and 2016.
Specialised training programmes for supervisors and workforce managers, quality managers and trainers will become more prevalent coupled with a
stronger focus on the training of executive leadership. This is because of the pivotal roles these knowledge executives play in the contact centre, and the dearth of skills in these areas.
Training providers will also move into new areas of eLearning, which include rich media and gamification in response to generational learning requirements.
Pressure will be placed on the government to increase their support for training
The biggest international trend valued by respondents from the training and
programmes within the BPO&O industry and scale up work readiness programmes
mobile for training (m-learning), social media and massive open online courses
education system. More corporates and outsourcers will also build, and establish,
buyers/investors arriving in South Africa has had a significant impact on the value
needs and requirements.
important to customise these practices to suit the local cultural demographic.
Training service providers would like to see government continue with initiatives
iFundi agrees noting that: “international companies have their own material
some initiatives are operating needs to be extended.
skills development sector, is the impact of technology particularly the use of
like Monyetla, removing complicated red tape in the Setas and improving the
(MOOCs). Apart from that, Careerbox believes the influx of international BPO
their own work readiness and skills development programmes suited to their
the local industry attaches to international best practices. However, it remains
where they share a common purpose with the industry, but the scale at which
and best practices which are tested globally. They have good material, but the
challenge is we also have the local Seta and SAQA standards, so they also have to meet local requirements while adhering to their global standards. This is usually resolved through the collaboration between external training providers and the outsourcers – the two are meshed together.”
The IQ Business Group also warns of the danger of merely replicating international
trends and best practices in the industry. “For many reasons, our resource base comes from a very different background and we need to be cognisant of that. The way that we execute our work is also different, so there is a strong cultural
component to the learning process. These cultural components tend to get lost in translation when you take a learning programme from one country to another just
because it is said to achieve results. “It remains important to note that the cost of learning the old way is no longer efficient – we need to observe what is going on and understand how relevant and applicable this is to South Africa and adopt practices that are most relevant to local requirements.”
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MARKET INTELLIGENCE REPORT 2015−2016
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TRAINING & SKILLS DEVELOPMENT
BPO&O Learning and Development (L&D) Benchmark Survey Demand (for the right skills) has now outstripped supply to the point that the BPO&O sector faces the most critical challenge of sustaining the supply of suitable skills.
The skill shortages can be found at the leadership and supervisory levels and in
specialist roles such as Quality Assurors, Trainers, Information Analysts, Work Force Managers, and foreign language speaking roles. For this reason, IQ Business
decided to introduce a Learning and Development (L&D) Benchmark Survey, to start
mapping the skills landscape in the BPO&O sector. The first Benchmark report was published in 2014.
Highlights of the 2014 report
32 companies in the BPO&O Sector across South Africa responded with accurate and complete submissions. The following findings provide an insight into the L&D landscape: ▪
When asked to rate their status of maturity as a Learning organisation, 3% of respondents indicated they are at a basic stage, 59% at a good stage, 22% excellent, and 16% rate themselves as world-class.
▪
All companies surveyed have a L&D strategy in place and most have a formal
strategy (78%) for measuring ROI. However, only 49% can confirm that their strategy is aligned to the National Skills Development Strategy. ▪
When choosing an L&D supplier, four factors seem to be key: Experience, Seta accreditation, Cost and Reputation.
▪
The majority of respondents have high ratios of employees to trainers. 61% have ratios of between 21 and 250 employees per trainer.
▪ ▪
74% have ratios of between 11 and 20 learners per trainer in a group.
The majority of companies surveyed spend 10% or less of their payroll on
annual training. 15% spend more than 21% of their payroll on training. For the majority, training is predominately funded through internal sources. ▪
Coaching (94%), traditional classroom training (91%) and buddying in the
live operational environments (88%) are the most popular methods of training with much less focus placed on on-the-job training. ▪
Organisations do align KPI’s to competencies, but are less prone to aligning staff member’s development plans to training plans.
▪
Performance Management tools, Learner Management Systems (LMS) and
eLearning tools are fairly common but other employee management tools
such as knowledge management, performance support, simulation tools and talent management tools are not used as often. ▪
While a third (31%) of companies purchase off the shelf software for training,
the majority (69%) prefer a customised solution (developed internally, outsourced, or customised from open source systems). ▪
Most companies use a combination of custom developed and off-the-shelf eLearning content. Very few companies overall - only half who actually use eLearning tools - make use of simulation development tools.
46
With over 6 million unemployed South Africans...
Trade & Investment KwaZulu-Natal ICT / BPO sector The Information Communications & Technology (ICT) and Business Process Services & Outsourcing (BPS&O) industries are two of government’s prioritized sectors with the potential to make KwaZuluNatal globally competitive through the provision of world class technological products and services and create both investment and export opportunities that can contribute towards broader economic growth and job creation. ICT & BPS&O investment in KwaZulu-Natal continues to emerge as a major contributor to South Africa's growing economy and its favourable business environment has made the province a sound investment destination for investors from around the world. Advanced information communication technology creates easy access to the global telecommunications highway, with high-speed international links and world-class mobile telecommunications networks. Trade & Investment KwaZulu-Natal markets packaged investment opportunities to both foreign and local business sectors. Investors are encouraged to consider KwaZulu-Natal as the destination of choice in the Business Process Services & Outsourcing (BPS & O) sector for the following reasons: ▪ The high quality of our agents as they have a language and cultural affinity with that of
For more information please visit www.tikzn.co.za or contact the Trade & Investment KwaZulu-Natal offices on Tel: 031 368 9600.
▪ ▪ ▪ ▪ ▪ ▪
▪
the United Kingdom and the United States of America; The excellent standard of our education system and institutions of higher learning; The low cost of doing business in the province of KwaZulu-Natal; The low attrition rate; The excellent communications infrastructure; Access to Global Broadband connectivity in order to improve speed & efficiency; Social cohesion and co-creation amongst local and existing businesses including training and recruitment institutions and Strong government support.
There are incentives offered by the national department of trade and Industry (dti) and these are based on the number of international jobs created and Foreign Direct Investment. Trade & Investment KwaZulu-Natal also has strong relations with development finance institutions such as ITHALA Bank, KwaZuluNatal Growth Fund (KZNGF), National Empowerment Fund (NEF), the Big 4 private Banks and the Industrial Development Corporation (IDC).
YOUR KNOWLEDGE PARTNER IN BUSINESS
ABOUT THE GAUTENG GROWTH & DEVELOPMENT AGENCY The Gauteng Growth & Development Agency’s (GGDA) key purpose is to maximise the effect of developing the economy of Gauteng, through support growth of the cooperatives economy, facilitation of trade and investment and increased strategic economic infrastructure. The strategic goals of the GGDA are derived from a response to the provincial outcomes, an analysis of the environment as well as key challenges and strategic issues that the authority should address. These are aligned to national and provincial strategic priorities and the Gauteng Department of Economic Development’s (GDED) Strategic Plan. The mandate of the GGDA is to grow the economy by positioning Gauteng as a Globally Competitive City Region (GCR). The Agency aims to demonstrate thought leadership in implementing key programmes and provides support for the development of key sectors of the economy, in line with conventional economic and industrial policies of the Province. Key to this, is support to Small, Micro and Medium Enterprises (SMMEs) and growth of the cooperatives economy, development of skills in key sectors, facilitation of trade and investment and increased strategic economic infrastructure. The GGDA also aims to ensure that key Provincial Strategies are supported in a manner that certifies the success of those strategies.
OUR SERVICES We recently opened the Gauteng Investment Centre (GIC), which is aimed at reducing the cost of doing business and creating a business environment that is compatible with the status of a globally competitive city region. The GIC offers businesses and prospective investors a one-stop, seamless service with easy access to various government agencies and functions. Our partners at the GIC include the Department of Trade and Industry (dti), South African Revenue Service (SARS), Gauteng Department of Agriculture and Rural Development (GDARD), Gauteng Enterprise Propeller (GEP) and Gauteng municipalities.
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