Skills Planning Mechanism for South Africa - Discussion Paper - Prof Hoosen Rasool

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ESTABLISHING A CREDIBLE INSTITUIONAL SKILLS PLANNING MECHANISM - HOOSEN RASOOL – OCTOBER 2013 1
DISCUSSION PAPER
TOWARDS “ESTABLISHING A CREDIBLE INSTITUTIONAL MECHANISM FOR SKILLS
PLANNING”
(Prof Hoosen Rasool – October 2013)
INTRODUCTION
This brief represents my conceptualisation of “establishing a credible institutional mechanism for
skills planning” which constitutes a key goal of the National Skills Development Strategy III.
An “institutional skill planning mechanism” is imperative to strengthen the diagnostic capacity of the
state to identify occupational imbalances (occupational shortages and surpluses) and form
assessments of current and emerging occupational needs in the labour market. Hence it rightfully
takes pole position as Goal 1 in NSDS lll.
I draw a clear distinction between “occupations” (which we refer to as “scarce skills”) and skills
(which we refer to as “skills gaps” or “critical skills”). I have always had reservations with the
bracketed terms currently in use, but that’s another issue for another paper. It is my contention that
a “skills planning mechanism” should talk primarily to “occupational labour markets” for sector-wide
planning.
I firmly believe that skills gaps are tracked, or should be tracked, at enterprise level. For example, the
focus should be on whether there is a shortage or surplus of Maths teachers (occupations), instead
of whether Maths teachers can communicate effectively (skills gaps or critical skills).
The effectiveness of an “institutional skills planning mechanism” is dependent on the extent to
which skills supplied by the education and training system match closely to skills demanded by
industry, both over the short-to long-term.
This brief responds to 3 fundamental questions:
1. What is an “institutional skills planning mechanism”?
2. What should an “institutional skills planning mechanism” measure?
3. How do we construct the “institutional skills planning mechanism”?
WHAT IS AN “INSTITUTIONAL SKILLS PLANNING MECHANISM”?
There is no single, universally agreed design of an “institutional mechanism for skills planning”. The
design of the mechanism is informed by the specific needs of a country and the resources at its
disposal.
In its most basic form, an “institutional mechanism for skills planning” can best be described as “an
entire set of interlinked institutions, systems comprising policies, processes, procedures, frameworks,
plans, collaborative partnerships, institutional arrangements, governing structures, methodologies,
tools and human resource capacities to provide analytical information and insights into short-,

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medium- and long-term skills imbalances (shortages and surpluses) in the labour market for
supporting skills planning in the sectoral, national, regional and local domains” ( my definition).
It should be pointed out that a computerised system is a “medium” or “platform” by which
information and data is transmitted to end users, but it is not an “institutional skills planning
mechanism”.
A labour market information system is also not a skills planning mechanism. STATSSA has a labour
market information system which is a platform for the Quarterly Labour Force Survey, Quarterly
Employment Survey, Employer Survey, Wage Survey, and so on. A skills planning mechanism should
not be replicating this in a diluted form. Rather relevant labour market indicators should be exported
to the “skills planning mechanism” interface. Therefore the usage of the term “labour market
information system” in LMIP 1 is a misnomer. A typical example of a “labour market information
system” is the ILO’s Key Indicators of the Labour Market (KILM) – this is not what we want to
develop to meet Goal 1 of NSDS lll.
Institutional policies, strategies, processes, research methodologies, stakeholder relationships,
decision-making structures and human resource capacities are critical to the effective and efficient
functioning of a “skills planning mechanism”. Equally important are monitoring and evaluation
processes to measure the performance of the mechanism, and the extent to which it is “fit for
purpose” and “fit of purpose”.
WHAT SHOULD AN “INSTITUTIONAL SKILLS PLANNING MECHANISM” MEASURE?
Here again, there is no prescription. The mechanism should measure what the owners of the
mechanism want it to measure – what they regard as important for making informed decisions on
skills planning.
However, the essence of any skills planning mechanism typically involves identifying a valid, reliable
and robust package of indicators to measure occupational imbalances that may exist in the
occupational labour market.
Since no single indicator is sufficient to measure disequilibrium, it is necessary to identify, combine
and synchronise an array of priority indicators, using multiple research methodologies and
processes, into a workable Occupational Measurement Framework. Such a framework should be
constructed to identify occupational mismatches at the detailed occupational level (digit 5 or 6),
according to OFO Codes.
Broadly, measurement indicators of the Occupational Measurement Framework should fall into the
following categories:
1. State of the labour market - information on the overall structure and performance of the
labour market, including its demographic composition, employment conditions, employment
and unemployment patterns, occupational trends, industry analysis, labour market
projections, migration trends and labour force flows. STATSSA provides elaborate data
coverage on the labour market and the DPRU (UCT) analyses this data in their reports.
2. Recruitment – hard-to-fill vacancies, job openings, work seeker applications and industry
recruitment. The level of difficulty experienced by employers in recruiting skilled workers is
indicative of the degree of oversupply or undersupply of a particular skill or occupation. The
Department of Labour and the CareersJunction Index tracks recruitment trends.

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3. Administrative data – post-school enrolments, graduate rates, financial assistance, courses
and SETA administrative information. HETMIS and FETMIS are important here.
4. Labour market entry - labour market entry indicators are based on the extent and the speed
at which the market absorbs graduates immediately after course completion, their level of
pay, and the quality of the match between their qualifications and their job. There are no
reliable or regular monitoring of this category. Primary research is required on a sustainable
basis sector-wide.
5. Employer responses – current and future occupational needs, emerging occupations,
training activities and spending, promotion, work process changes and industry growth
prospects. There are no reliable or regular monitoring of this category. Primary research is
required on a sustainable basis sector-wide.
6. Occupational wage movements – wage growth and decline, benefits, wage levels, hourly
pay, overtime and non-wage changes. There are organisations doing primary research here.
But it would need to be re-packaged for the different users of the mechanism.
7. Migration – inbound and outbound skilled migration, types of occupations and
qualifications, migration densities and industries employing migrants. There are
organisations doing primary research here. But it would need to be re-packaged for the
different users of the mechanism.
8. Industrial policy, strategies and plans – there are a myriad of industrial strategies, national,
provincial and local economic development strategies and sector growth strategies criss-
crossing the political economy. The skills planning mechanism should “digest” this and
present it to users in a “palatable” way.
9. Scenario Planning – scenario planning should be undertaken from the perspective of
occupational labour markets. There are agencies doing this type of work in SA.
10. Econometric Modelling – we have started work here, but the challenge is sustainability,
consistency, reliability and accuracy.
11. Occupation in High Demand Index – there should be a credible Occupations in High Demand
Index which culminates in that elusive “National Scarce Skills List”. Proper methodologies
should be employed to make a determination of occupations in high demand.
A multiplicity of research strategies, approaches, methodologies, techniques, processes should be
employed to collect, compile and analysis data for intelligence. The different categories of the
Framework should corroborate or dispute findings as part of a triangulation process. It is neither
advisable nor feasible for the DHET to attempt to conduct all research to populate the framework.
The Occupational Measurement Framework presented above is a very tall order for a country
embarking on developing a skills planning mechanism. The categories chosen will depend on
institutional capacities, stakeholder support, partnerships, diagnostic capacities, resources, including
human resources, and priorities of owner(s) of the mechanism. It should ideally be phased in
developmentally with the mechanism acquiring increasing capacity over time.

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Ideally the DHET should leverage a range of institutional actors such as post-school institutions,
SETAs, research bodies, quality councils, professional bodies, STATSSA, NGOs and CBOs to realign
their research activities and commitments to the mechanism. Additionally collaborative partnerships
with international agencies, other public departments at national, provincial and municipal levels,
state agencies, employer associations, trade unions and employment services bodies are also vital to
augment the mechanism. This broad constellation of actors would, in varying degrees, provide
information on occupational imbalances in the labour market.
Within this context, the DHET’s primary functions are establishing a policy, legislative and regulatory
environment; co-ordinating a network of participating institutions; leading, steering and managing
framework development activities; building institutional capacities; filtering data and information;
compiling datasets and information banks; formulating labour market intelligence; producing
reports; disseminating information; and monitoring and evaluating the performance of the skills
planning mechanism.
The above functions are the “scaffolding” that should be used to “construct” the skills planning
mechanism. The HSRC are the “architects” that are supposed to provide the “architectural plan”
through LMIP 1 for the “construction”, which would be the task of the DHET as the “builders” of the
mechanism.
I regard the word “construct” as the most important in this discourse. We should “construct” the
mechanism. There are no “turn-key” solutions that can be bought and implanted into our HRD
landscape.
What works well in one country may work badly in another. It will be a painful process of trial and
error. It is not so much the errors we make, but what processes we have in place to identify and
rectify with speed.
HOW DO WE CONSTRUCT THE “INSTITUTIONAL SKILLS PLANNING MECHANISM”?
This section captures the main elements of constructing an “institutional skills planning mechanism”
which ostensibly should involve a multi-stakeholder, multi-level approach to system development
and innovation.
A starting point should be to envision an “institutional skills planning mechanism” on paper with an
envisaged “Occupational Measurement Framework”, governance arrangements, intra- and inter-
institutional structures, funding, staffing, and shared responsibilities. This should be encapsulated
into a comprehensive workable plan that is adaptive to changing and new demands from
stakeholders. We should be able to remould the Framework without having to start again if new
issues are to be incorporated.
Institutional Arrangements: The different institutional actors mentioned in the preceding section
should be delineated specific roles, functions and responsibilities. Consideration should be given to
establishing sector, regional and local skills planning observatories. The latter is necessary to ensure
that regional and local labour market sensitivities are captured.
DHET structures and capacities: Arguably this endeavour requires the DHET to develop sustainable
intra- and inter-institutional structures and human resources to develop and maintain the “skills
planning mechanism”. Research managers, labour market analysts, statisticians, IT specialists, to list

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a few, constitute the “heart and soul” of the mechanism. System infrastructure requirements such
as hardware, software, web-enabling and mobile technologies should be considered.
Delivery systems and information dissemination: An optimal “skills planning mechanism” should
provide easily accessible intelligence, services and resources to the wide range of end-users. Whilst
the web is a necessary medium, other means to ensure accessibility should also be explored. This
ensures inclusivity in the utilisation of the “institutional skills planning mechanism”.
Legislative and policy framework: Establishing a legislative and policy framework to govern the
“institutional skills planning mechanism”; secure funding; put plans into statutes; create
accountability frameworks, and garner a coalition of support are required. These are needed to
ensure institutional actors reporting to the DHET meet statutory obligations to populate the
“Occupational Measurement Framework”. It would also ensure the sustainability of the “skills
planning mechanism”.
Analytical function: A “skill planning mechanism” embodies analytical capacity to identify and
anticipate occupational needs and relate these to national strategies, policies and programmes. At
its core, the mechanism should track a set of leading indicators. A unit within the DHET should be
established for data compilation, database development, analysis, and production of reports.
Consultation: Stakeholder consultation constitutes the basis for the development of a “skills
planning mechanism”. At the outset a consultative process should be initiated by an existing or new
task team to determine what research is already being conducted and seek stakeholder
commitment. The task team should also prioritise: legislative changes; end-user needs; the
Occupational Measurement Framework; intra- and inter-institutional structures; staffing; data
collection and analytical methods; IT and processing software; communication and public relations;
funding and donor support; monitoring, evaluation and reporting. In a nutshell, the entire
architecture of the “institutional skills planning mechanism”.
Responsiveness: Identification and measurement of occupational imbalances should feed into the
policy-making cycle to enable supply-side institutions to respond to the demand-side needs of the
labour market. This has direct implications for education policy, funding and programme mix at post-
school level.
CONCLUDING REMARKS
In the context of limited experience, it is recommended that initially a core “skills planning
mechanism” should be devised with a limited set of leading indicators and research studies. Over a
period the mechanism should progressively be developed to meet the evolving demands of end
users. Although the development of the mechanism has been outsourced to the HSRC, it is strongly
advisable that adequate institutional capacity should be built within the DHET from the outset to
ensure technical proficiency, sustainability, ownership, and ultimately the success of the enterprise.
There are two other elements in the “barrel” of the skills planning mechanism which I have not
“triggered” upon. These are career guidance services and matching services that would eventually
constitute the full “arsenal” of the mechanism. Work on these elements are taking place within and
outside the DHET. At some point these should need to be incorporated into the expanded
mechanism.