Skills development: Transition to QCTO creates uncertainty

A pivotal shift for South Africa’s skills development sector – the recent announcement of a three-year extension to the S12H tax incentive – has sparked both relief and renewed uncertainty for companies. While welcomed, it has brought some pressing questions to the fore around the transition to the Quality Council for Trades and Occupations (QCTO) and its implications for broad-based black economic empowerment (BBBEE).

Rajan Naidoo, managing director of EduPower Skills Academy, says businesses’ need for further information is now urgent, with the 1 July starting date for the transition to QCTO Occupational Certificates looming. “The extension to the S12H tax incentive has provided some guidance for the sector around rebates, but we still need clarity in several other areas,” he adds. “With just over two months until companies can no longer register learners for SETA–accredited learnerships, each day without answers heightens the challenges faced by businesses that want to comply with regulations and meet their BBBEE objectives.”

He highlights the following key questions regarding BBBEE and the transition to the QCTO Occupational Certificates:

1. How will QCTO qualifications be recognised within the BBBEE framework?

There is uncertainty around how QCTO Occupational Certificates will be acknowledged under Skills Development on BBBEE scorecards; and if these will contribute the same number of points as SETA legacy qualifications.

2. Are there specific skills development scorecard changes related to QCTO qualifications?

In light of the traditional 12-month cycle associated with learnerships and employment creation, clarity is required regarding how the awarding of corporate credits will be dealt with in future. The longer duration and potentially higher credit requirements of QCTO Occupational Certificates compared to legacy learnerships could also pose challenges for BBBEE verifiers.

3. Are there any incentives or bonuses for supporting QCTO qualifications?

While the extension of the S12H tax incentive is a positive, businesses need to understand if there will be any other funding. Currently, companies can access mandatory and discretionary grants via their industry SETAs. However, will these continue or be replaced with other incentives?

4. Will existing BBBEE points remain valid?

Clarification is needed about whether investments made in prior skills development initiatives by companies will still count toward their BBBEE scores during the transition period.

5. Will companies be able to claim BBBEE points for investing in the transition to QCTO qualifications?

The substantial investment required to transition to QCTO qualifications prompts questions regarding the eligibility of companies – especially those with training departments – to claim BBBEE points for expenses related to this process, including training materials and staff development.

6. Will BBBEE verification agencies be qualified to adjudicate QCTO qualifications, and what documentation will be required?

Businesses need assurances that BBBEE verification agencies will be upskilled and certified in the transition to QCTO qualifications and their implications for scorecards. There has also been no communication around the specific documentation and evidence required to prove compliance with QCTO Occupational Certificates during BBBEE verification audits.

7. How will QCTO qualifications impact employment equity targets and socio-economic development initiatives?

The question of how employing individuals with QCTO qualifications and supporting QCTO–related socio-economic development initiatives will align with companies’ BBBEE strategies and goals still remains.

The skills development industry is clearly in a state of limbo currently, grappling with uncertainties surrounding the impact of QCTO on BBBEE compliance. As the 30 June deadline – which marks the end of SETA–accredited learnerships – approaches, Naidoo emphasises the critical need for decisive action and clear guidelines to address these concerns and many other unanswered questions facing the industry. “Without this direction, we risk stalling progress and undermining the very essence of transformational change that the skills development sector has worked so hard to achieve,” he concludes.

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