An impassioned
2009 budget speech sets the example for business to
follow
The global economic crisis has left many looking tentatively
ahead to 2009 with cautious optimism. While South Africa
has thus far been largely insulated from the most resonating
effects, one wonders how long we can hold out. The Budget
speech for 2009 reflects a sobered approach to tax breaks
yet increased spending on socio-economic concerns, a
resounding message from Government that difficult times
are ahead but skills development and creating employment
remains a priority that will not be compromised. Where
do businesses fit into this picture?
For the average business operating under economic conditions
that will almost certainly lead to a global recession
and resultant job cuts it is difficult to justify spending
in the areas of skills development. Many directors are
looking at budgets to cut costs wherever possible, the
training budget usually falling first victim. While
this does serve the purposes of limiting costs in the
short term, it is not necessarily the best long term
solution for the organisation.
South African companies are in a unique position to
turn adversity into opportunity through training. Bridging
skills gaps through training will result in a multi-skilled
work force able to fulfil diverse roles within the organisation.
Further, the threat of increased unemployment has made
employees less mobile. Employees are less likely to
pursue more lucrative employment opportunities, simply
because there are none. Therefore, any organisation
investing in the development of their employees is more
likely to retain the skills acquired by training through
the economic downturn. During that period these employees
contribute to a more productive (and therefore more
profitable) organisation by applying diverse skills
in different roles. Assuming that the training is of
a high quality and addresses the needs of the individual
and the organisation, the initial cost of the investment
in training can be recouped within a year.
For as long as job creation and reducing unemployment
through skills development remains a focal point of
the Government’s fiscal policy, businesses will
continue to be granted incentives to help alleviate
the burden of skills development on the Government.
Incentives like learnership allowances and recoupment
of skills development levy spend are unlikely to change
until the skills shortage has been adequately addressed
on a national level.
Businesses therefore should follow Government’s
lead and not only protect those training budgets but
spend it wisely as it may be the insulation every director
is currently looking for to safeguard against the difficult
times foreseen.
Companies
that no longer invest in training and research will
die.
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