Return On Investment

Maximising Employee Return on Investment (ROI) Through Continuous Training and Development Programmes is an All-round Win-Win Solution

In today’s workplace the pace of change is happening so rapidly that we simply cannot afford to get stuck in a comfort zone or rest on our laurels if only for a second, even when things do go well.
Business sustainability therefore largely depends on how we respond to changes that have a direct impact on bottom line performance as well as how we manage our resources through these changes.

Therefore, where individuals find themselves tomorrow and the things that they will be able to do in the future is contingent upon what they do today to improve themselves. Having said that, continuing to do the same thing each day and expecting different results is akin to self-sabotage. The same thing applies to business. Hence, to a large degree, where your business finds itself tomorrow and in seeking a win-win solution all round, a lot will depend on how much you are prepared to invest today in staff training and development.

In this article we discuss the main benefits to your business in developing the skills of your employees through continuous training and development programmes.

Employees are the lifeblood of your business

Your employees are the lifeblood of your business and sustaining their potential to perform means better bottom line results. 20th Century genius Albert Einstein offers some healthy advice in this regard that can be summed up as: “The definition of insanity is doing the same thing over and over again and expecting a different result.”



Beyond the obvious reasons, what are the other implications for your business when you make a dedicated investment in maximising employee potentials through training and development? In this article we examine what we consider to be the reasons why it makes perfect sense to invest in employee training and development programmes.


1. Training enhances staff performance levels

When your employees undergo training to improve their knowledge and enhance their skills it goes without saying that they will naturally be able to perform better. This applies to each and every department and covers employees at all levels within the business. Through training, your employees will automatically acquire a better understanding of your business, the industry at large as well as the function and purpose of the particular jobs that they do.

2.Cross-training opportunities mean a better understanding of the business

If your business is structured in such a way that you have different departments, creating an environment that embraces collaboration among employees inspires members from different teams to learn from each other. For instance, when one team is involved in a training session, even if it is a specific initiative, invite others from different teams or areas to also attend. This will give others the opportunity to learn more about aspects of the business that they previously knew nothing about.

3.Training minimises staff turnover

While a certain degree of staff turnover is normal for any business and new people who join an organization bring along with them fresh ideas and different perspectives, a high staff turnover rate can be disruptive and costly. Spending the money on staff training and development as opposed to recruiting new staff is far more cost effective. Not to mention that when employees realise that you are prepared to invest in their training and development needs they are more likely to feel valued and this means that they are less likely to seek employment elsewhere.

4.Employees who are trained feel more engaged with the business

Benjamin Franklin was quoted to have said: “Tell me and I forget, teach me and I may remember, involve me and I learn.” The same applies to actively engaging with your employees. It goes without saying that your employees will greatly appreciate any opportunity you give them to learn and grow. Continuous learning keeps things from becoming staid and boring by helping to stimulate a flow of fresh ideas which in turn ensures that staff are sufficiently motivated.

5.Training helps employees stay abreast of new developments that invariably translates into business growth

Training ensures that employees stay abreast of any new developments within the industry, which, in turn translates into opportunities for business growth. Staff who are informed of new developments should inform others within the business and keep everyone on the same page. This will help to sustain a competitive advantage and ultimately improve customer service levels.

6.Training improves your business bottom line

Engaging with employees through dedicated training programmes helps to improve your business bottom line in that by upskilling your employees, whether it is with a view to enhancing customer service levels or elevating technical knowledge, through training, your employees will naturally become better at their jobs which in turn translates into better bottom line performance

7.Training enhances the reputation of your business

The perception around a company who cares enough about their employees to invest in staff training and development enhances the reputation of the company. Staff and customers alike will see the company as one that is good to work for. This, in turn, not only positively affects the hiring process but also augments sales and boosts the bottom line.

8.Training upskills employees for promotion

Existing employees are familiar with the day to day running of the business and when it comes to considering promotions and placing individuals into key roles and positions of greater responsibility and influence it is natural to look within the company before hiring from the outside. Not only does training ensure that employees are more capable, but also helps to identify appropriate talent within the organization. Managers are then able to determine who should be considered for promotion and gain a better grasp of latent strengths and weaknesses

9.Training helps with succession planning

Dedicated staff training and development programmes should be a continuous process. In terms of succession planning it can help to enhance employee skill levels when considering what types of leaders a company may need in the future, what industry changes and developments are expected to take place that can impact the business or what customers may need in the future.

Company Benefits around Tax Rebates for Learnerships made simple

When registering a learnership agreement with your SETA, a tax incentive can also be claimed over and above claiming a learnership grant from the SETA.
There are numerous reasons involved with the introduction of the Learnership Tax Incentive which in the main centre around enhancing job creation, encouraging skills development as well as in terms of formal SETA registered training programmes whereby an additional tax deduction is provided for.

Deductions apply as follows:

  • The employer is entitled to an Annual Allowance which applies with respect to any year of assessment whereby a registered learnership agreement is in place.
  • The employer is entitled to a Completion Allowance which applies during any year of assessment during which the learnership is successfully completed.
  • addition to the Annual Allowance, the Completion Allowance is a once-off deduction applicable to the year of assessment during which the learnership is successfully completed once proof of completion has been submitted to The South African Revenue Service (SARS).

The following table provides an overview of the amounts that can be claimed.

Criteria Qualification Current Previous
Individuals with no disabilities NQF Level 1 – 6 R40 000 R30 000 R30 000
Individuals with disabilities NQF Level 1 – 6 R60 000 R50 000
NQF Level 7 – 10 R50 000 R50 000

Skills Development enables you to Maximise your BBEEE points

Of the total scorecard points, skills development is a priority component and constitutes 20 points plus 5 bonus points overall. To avoid dropping a level, a scoring of a minimum of 40% of the points within this component should be achieved. Evidence indicating that black people as defined by the BEE Codes of Good Practise are receiving scarce and critical skills training should be submitted to enable the scoring of points for skills development.

Recent amendments to the codes are as follows:

    • Points have been increased from 15 to 20 with an additional 5 bonus points included.

    • With respect to the total leviable amount, that is, the total annual salary payroll, spend has been increased from 3% to 6%.
    • Staff being trained do not necessarily need to be permanent employees of the company.
    • For internal or non-accredited training initiatives, a maximum of 15% of training spend should be allocated.
    • 100% gainful employment is equal to 5 bonus points and Learnerships should account for 5% of staff headcount.

Increase your BBBEE rating through skills development training

  • Learnerships not only increase your BBBEE score, they increase spend without increasing costs.
  • Grant funding received from the relevant SETA is part and parcel of training expenditure.
  • Skills Development Facilitators (SDFs) expenses in terms of salaries and invoices can be claimed.
  • Points can be claimed for training in respect of skills development, enterprise development and supplier development. Score can be achieved with two of these three elements in terms of one contribution and score can be achieved in all three elements with respect to Learnerships for disabled employees.
  • Certain limitations apply in that only 15% of the funding towards uncertified informal training will count and travel, accommodation and catering costs will also be restricted to 15% of the total amount.

Discretionary Grants

In accordance with new regulations and as drafted in the Sector Skills Plan (SSP), the respective SETA will allocate at least 80% of its 49.5% discretionary grants within the financial year towards PIVOTAL programmes in order to address critical and scarce skills.

When an employer addresses the scarce and critical skills sector needs through the following PIVOTAL programmes (Professional, Vocational, Technical and Academic Learning) initiatives that translate into full or part occupational qualifications on the National Qualifications Framework) the grant will apply.

  • Skills programmes that consist of short courses which training duration amounts to 1 day, 1 week one month etc. and incorporate one or more unit standards.
  • Learnerships that comprise 70% practical and 30% theoretical training that lead to a full qualification and that are registered with the Department of Labour.
  • Paid or unpaid Workplace Experience Placements for an agreed time period are normally arranged through a university with an employer and form part of a course of study.
  • Apprenticeships allow individuals to obtain a licence to practise in a regulated profession and consist of on-the-job training as well as classroom work and reading.
  • Individuals who have completed their training but are still lacking workplace experience prior to being employed can apply to do an internship.

Mandatory Grants

In terms of the new BBBEE codes, those companies with an annual payroll of R500 000 or more are required to submit their Workplace Skills Plan (WSP), Annual Training Report (ATR) and Pivotal Report (PVT) to the applicable SETA for approval prior to 30 April each year and failure to comply will result in a zero score in terms of skills development.

The Mandatory Grant is designed to encourage employers to provide data to the applicable SETA in terms of skills and workforce requirements as per the WSP and ATR. With respect to the WSP and ATR the Mandatory Grant stands at 20% of an employer’s 1% skills levy.

The amount that can be claimed from the applicable SETA is determined by the annual payroll and the following percentages are applicable

      • Registered Skills Development Facilitator (SDF) – 15%
      • Preparation, submission and approval of a WSP for the applicable SETA – 10%
      • Preparation of an ATR based on the approved WSP – 20%

Provided that sufficient proof exists, companies may claim for facilitators, training, course fees and course material, and training venue costs.