SECTOR SKILLS PLAN (SSP) 2016-2017

1 1 SECTOR SKILLS plan (SSP) 2016-2017 Final 01 August 2016 2 Table of Contents A. LIST OF FIGURES ..3 B. LIST OF TABLES ..4 C. D. ACRONYMS ..5 EXECUTIVE SUMMARY ..7 1 CHAPTER 1: SECTOR PROFILE .. 10 Scope of Coverage .. 10 Key Role 13 Economic Performance .. 15 Labour Market Profile .. 18 Employment Patterns and Trends .. 25 Chapter Conclusion .. 25 Change Drivers .. 26 Growth into Africa .. 26 Speed to Market .. 26 Digital Revolution .. 27 SKILLS Shortage .. 27 Responsible Buying .. 27 Alignment with National Strategy and Plans .. 28 Chapter Conclusion .. 29 2 CHAPTER 3: EXTENT OF SKILLS MISMATCH .. 30 Extent and Nature of Demand .. 30 Employment Patterns and Trends .. 30 Conditions of Employment .. 30 Occupations that are difficult to fill .. 31 Number and Types of 32 Extent and Nature of Supply.

2 33 Extent of Occupational SKILLS Supply .. 34 State of Education and Training Provision .. 35 Supply problems experienced by the SECTOR .. 38 SKILLS Gaps .. 39 SKILLS 39 Employability of Graduates .. 44 SKILLS supply problems that firms are experiencing .. 46 Chapter Conclusion .. 47 3 CHAPTER 4: SECTOR PARTNERSHIPS .. 48 Existing partnerships .. 48 New partnerships .. 50 Chapter Conclusion .. 51 4 CHAPTER 5: SKILLS PRIORITY ACTIONS .. 52 Findings from Previous Chapters .. 52 Recommended Actions .. 53 SKILLS Priorities for the SECTOR .. 53 Proposed Interventions .. 54 6. Chapter Conclusion .. 58 BIBLIOGRAPHY .. 59 3 A. LIST OF FIGURES Figure 1-1: Proportion of wholesalers by type of wholesale activity .. 12 Figure 1-2: Proportion of retailers by type of retail activity .. 12 Figure 1-3: Proportion of Wholesale and Retail Enterprises by size (Small: n=5905, Medium: n= 1189, Large: n= 519).

3 16 Figure 1-4: Location of Enterprises by Size (Small: n=5905, Medium: n= 1189, Large: n= 519) .. 17 Figure 1-5: Proportion of Staff (n=751 848) .. 17 Figure 1-6: Employment in the Wholesale and Retail Trade 2004-2014 (000 ) .. 18 Figure 1-7: Proportion of Employees by Formal and Informal SECTOR .. 18 Figure 1-8: Employment in the Wholesale and Retail SECTOR by province (000) .. 19 Figure 1-9: Number of employees by 20 Figure 1-10: Proportion of Staff by Occupation (n=751 848) .. 20 Figure 1-11: Employee Demographics .. 21 Figure 1-12: Proportion of Staff per province by race and gender (n=751 848) .. 21 Figure 1-13: Proportion of Staff per occupational category, by age (n=751 848) .. 22 Figure 1-14: Proportion of Staff per province, by age (n=751 848) .. 23 Figure 1-15: Proportion of Disabled Staff per Occupational Category, by Race (n=2 209) .. 24 Fiergure 1-16: Proportion of Disabled Staff per Province, by Race (n=2 209).

4 25 Figure 2-1: Sectors with a high SKILLS demand .. 32 Figure 2-2: Number of Employment Adverts in the FMCG, Retail and Wholesale Sectors .. 33 Figure 2-3: University intake by major field of study .. 35 Figure 2-4: Training workers .. 35 Figure 2-5: Number of people trained per occupational class 2013/2014 .. 36 Figure 2-6: Number of people trained per province 2013/2014 .. 36 Figure 2-7: Sectors with a high SKILLS supply .. 38 Figure 2-8: Reasons for Scarcity (n=243) .. 39 4 B. LIST OF TABLES Table 1-1: Key Role Players in the Wholesale and Retail SECTOR .. 14 Table 1-2: Provincial Spread of W&RSETA enterprises by size (Small: n=5905, Medium: n= 1189, Large: n= 519) .. 17 Table 1-3: Number of staff per occupational category by age (n= 751 848) .. 22 Table 1-4: Number of Staff per province, by age (n=751 848) .. 23 Table 1-5: Number of staff per occupational category by race (n=2 209).

5 24 Table 1-6: Disabled Employees .. 25 Table 1-7: National Strategies/ Policies and their implications for SKILLS Development in the Wholesale and Retail SECTOR .. 28 Table 2-1: Applicants per Advert, Career Junction .. 33 Table 2-2: Planned training by Top 30 occupations .. 36 Table 2-3: Findings on the remaining 6 PIVOTAL SKILLS .. 43 Table 2-4: Findings on the remaining 6 scarce SKILLS ..43 Table 2-5: SKILLS 46 C. Tables Table 1: SIC Codes Wholesale & Table 2: W&RSETA Key role Table 3: The W&R sectors economic Table 4: W&R enterprises by size and Table5: Scarce SKILLS list for Western Cape and Eastern Table 6: Scarce SKILLS list for Northern Cape and Free Table 7: Scarce SKILLS list for Kwa Zulu Natal and North Table 8: Scarce SKILLS list for Gauteng and Table 9: Scarce SKILLS list for Table 10: National Top 10 Critical SKILLS Table 11: National Policies alignment to W&RSETA 5 D.

6 ACRONYMS Acronym Description ALC Adult Learning Centre ATR Annual Training Report BER Bureau for Economic Research BUSA Business Unity South Africa CGCSA Consumer Goods Council of South Africa DBE Department of Basic Education DHET Department of Higher Education and Training FDI Foreign direct investment FMCG Fast Moving Consumer Goods FRA Fuel Retailers Association South Africa GDP Gross Domestic Product IMF International Monetary Fund IPAP Industrial Policy Action plan NDP National Development plan NEC Not Elsewhere Classified NGP New Growth Path NQF National Qualifications Framework NSA National SKILLS Accord NSDS National SKILLS Development Strategy OFO Organising Framework for Occupations PIVOTAL Professional, Vocational, Technical and Academic Learning PSET Post School Education and Training PWC Price Waterhouse Coopers QCTO Quality Council for Trades and Occupations QLFS Quarterly Labour Force Survey RA Retailers Association RMI Retail Motor Industry Organisation SAQA South African Qualifications Authority SARB South Africa Reserve Bank SERO Socio-Economic Review and Outlook SETA SECTOR Education and Training Authority SIC Standard Industrial Classification 6 Acronym Description SIPs Strategic Infrastructure Projects SMME Small.

7 Medium and Micro Enterprises SSP SECTOR SKILLS plan STATSSA Statistics South Africa TVET Technical and Vocational Education and Training UNISA University of South Africa USD United States Dollar W&RSETA Wholesale and Retail SECTOR Education and Training Authority WEO World Economic Outlook WPPSET White Paper for Post-School Education and Training WSP Workplace SKILLS plan 7 Executive Summary Chapter 1 ( SECTOR Profile): The Wholesale and Retail SECTOR employed million people, or of the total active labour force. Retail Sales year-on-year in South Africa is expected to be by the end of the 2nd quarter, according to Trading Economics expectations. Looking forward, it is estimated that Retail Sales YoY in South Africa is to stand at in 12 months time. There are 87 790 active Wholesale and Retail enterprises.

8 These consist of 77 196 small (88%), 2370 medium (3%) and 919 (1%) large enterprises. There are 7305 (8%) unclassified enterprises. Gauteng has the largest concentration of enterprises (37%); Western Cape has 18% and KwaZulu-Natal 15%. In top management, of Africans compared to of Whites are represented. Female representation is across the board with Africans, Coloureds and Indians. The corresponding figure for White females is A similar picture emerges for senior management and professionals. In the unskilled category, Africans make up , Whites , Coloureds and Indians In 2005/16 the SKILLS levies received from small enterprises was R94 627 million and the grant disbursement was R32 398 million indicating a 34% pay-out. However, in 2015/16 the SKILLS levies received from small enterprises was R255 851 million and the grant disbursement was R12 948 million indicating a 5% pay-out.

9 A similar picture emerges for medium and large enterprises. Chapter 2 (Key SKILLS Issues): Key drivers of change within the SECTOR include: Technology advancements: The wholesale and retail industry is rapidly changing as a result of technological advancements. Changes include: mobile applications, online shopping, big data, social media, cyber-crime, mobile phones and internet usage. Power shift to consumers: Consumers today are increasingly empowered by the use of social networking sites. They now have a voice, and often a very loud and powerful one. Changes include: ethical issues, eco-friendliness and greening. African retail growth: Multinational are expanding rapidly into Africa and increasing the presence, some more aggressively than others. Changes include: growing economy, population growth, supply chain efficiencies, human resources, managing risk/reward trade-off.

10 SMME development: The SMME SECTOR in South Africa is relatively large and source products from wholesale companies. Changes include: small enterprise development, hawkers, casualisation and new training model. 8 SKILLS Shortage: An evolving retail landscape has resulted in SKILLS shortages at both management and elementary level presents the SECTOR with challenges requiring urgent remediation. Key policy drivers for the SECTOR include: IPAP 4; New Growth Path (NGP); National Development plan (NDA); HRD Strategy for SA, Department of Environmental Affairs and Tourism SECTOR SKILLS plan . The research approach for the SSP focused on producing evidence, enabled through quantitative and qualitative methods, including primary and secondary research. Utilization of a number of data sources, including desk-based research, analysis of WSPs and ATRs, surveys, questionnaires, focus groups and interviews allowed for a high degree of information integrity.