INSETA: employment equity could by hampered by recession

Data just released by the Insurance Sector Education and Training Authority (INSETA) has revealed the insurance sector in South Africa is largely weathering the worst effects of the economic recession – but there is still a danger that transformation imperatives could be put on the back-burner as training budgets are cut.

This poses a potential threat to employment equity in the sector and INSETA is moving to ensure the empowerment agenda remains a top priority, even during tougher economic times, said INSETA CEO Sharon Snell.

“Our recently released Sector Skills Plan (SSP) report shows that the recession has hit the insurance industry unevenly – the general trend across the sector is one of growth and employment stability however some of the major global companies have reported retrenchments.

“However, the full effects of the recession are still not 100% clear and the industry is understandably taking a cautious approach. This means that many companies have frozen new appointments, cut back on training budgets and are even scaling down training programmes or putting them completely on hold for the time-being – which obviously poses a threat to employment equity in the sector,” said Snell.

The SSP serves as a comprehensive overview of the insurance sector in South Africa, including the demographics of its employee base, and indicates where training needs to be stepped up.

According to its data, the insurance industry – which accounts for 8% of the total employment in South Africa’s financial sector – has generally done well in terms of empowerment, but there is still a shortage of black talent, especially black females, in senior management positions.

“With reference to the scarcity of skills in the sector, there is a need for mostly African female workers in the management, professional and sales worker occupations. The degree of scarcity for managers and professionals becomes more serious for occupations requiring higher NQF Level qualifications,” said the Report.

Snell said that, significantly, this skills gap could only be addressed through sector-specific training programmes and by up-skilling existing employees – a key focus for INSETA.

“Despite higher graduation rates in recent times, and more people entering the sector, consultation with our stakeholders reveals that there remains a problem with the quality and appropriate qualifications of these graduates. Often they do not perform to expectation or are not work-ready,” explained Snell.

“This means that companies need to initiate training programmes to help new recruits reach the required level, or to help existing employees make the leap to more senior roles,” she added.

INSETA’s top priority, in response to the Report, will now be to accelerate funding for training to push forward the transformation agenda in the sector, said Snell.

“It must be noted that companies have spent a lot of money and have generally done quite well in terms of employment equity. The danger is that now, with less money around, they will not place training and transformation too high on the agenda. We want to ensure this does not happen and will be accelerating our funding in response to this concern. After all, skills development is a key driver of transformation in the sector, and we want transformation to quicken, not lose momentum,” Snell said.

Mutual & Federal is but one INSETA member that is continuing to prioritise skills development during the tougher economic climate. Their success proves that with INSETA’s support, companies need not cut back on training at this time.

Hannes Smith, Group Manager Human Capital Development at Mutual & Federal, said the company has made “optimal use” of INSETA’s support in recent months to continue its training, which is managed independently within the company.

“INSETA’s support has continued to help us during this uncertain period and we are using our relationship with them to train and develop a pool of talent who are ready to work at Mutual & Federal,” said Smith.

“Our strategy for skills development is closely aligned with INSETA’s and we have no plans to cut back on our training,” he said.

Smith added that between April 2008 and April 2009, Mutual & Federal had trained 255 people – mainly black unemployed matriculants – on their in-house learnership and internship programmes. Of the 255, 180 were given permanent employment at the company. The company has also shown commitment to training and hiring more people with disabilities, he said.

Other key findings from the SSP highlighted that the insurance market in South Africa is extremely saturated, and that any future growth will have to come from the lower end of the market – a traditionally difficult market for insurance companies to break into.

Another trend brought about by the economic downturn is that many insurance sector workers – particularly those in commission-based sales positions – would be earning less money, even if their job positions remained relatively secure, said Snell.