Skills Development: A Game Changer for Employers in South Africa
In today’s competitive and rapidly evolving economy, skills development for employers is more than a policy — it’s a strategic necessity. A highly skilled workforce improves productivity, fosters innovation, and builds a more robust economy. In South Africa, the Services Sector Education and Training Authority (Services SETA) plays a vital role in this process by offering programmes that equip both employed and unemployed individuals with the necessary skills to meet current market demands.
Why Skills Development Matters
Countries around the world have recognized that developing a skilled workforce leads to increased productivity and inclusive economic growth. In South Africa, the diversification of the economy and a shift toward high-productivity sectors are central to sustainable poverty reduction. However, this can only be achieved through a capable, skilled, and adaptable workforce.
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To support this, skills are developed through formal, informal, and non-formal education and training. From artisan programmes and apprenticeships to internships and adult education, Services SETA creates accessible pathways for individuals to grow their skills and contribute meaningfully to the economy.
How Employers Benefit from Skills Development
Boosted Productivity and Competitiveness
One of the most immediate benefits for employers who invest in skills development is an increase in productivity. When employees are equipped with the latest skills and knowledge, they perform tasks more efficiently and with higher accuracy. This leads to cost savings, improved quality, and better customer satisfaction.
Economic Contribution and Transformation
Employers that take an active role in upskilling both their current staff and unemployed individuals directly contribute to national economic growth. A skilled workforce attracts foreign and domestic investment, facilitates technological innovation, and drives transformation through improved BBBEE (Broad-Based Black Economic Empowerment) scores.
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Access to Financial Incentives
The South African government supports employer-driven training through various financial incentives. These include tax rebates for learnerships, increased BBBEE scoring, and the ability to claim back a portion of their skills development levy through Mandatory Grants.
Understanding the Mandatory Grants System
What Are Mandatory Grants?
Mandatory grants are funds that employers can reclaim by submitting Workplace Skills Plans (WSPs) and Annual Training Reports (ATRs). Employers who pay over R500,000 annually in salaries are legally required to pay a 1% Skills Development Levy (SDL) to SARS, which is then allocated to their relevant SETA.
Reclaiming the Levy
To claim back up to 20% of their annual SDL contributions, employers must submit complete and compliant WSPs and ATRs within the designated submission window, typically between December and April each year.
2025-2026 Application Window and Support
For the 2025–2026 period, Services SETA offers comprehensive support for employers through workshops and online resources. Employers are encouraged to download necessary forms, such as:
- MG_ANNEX_03_MANDATORY GRANT FORMS
- MG_ANNEX_05_25 MANDATORY GRANT EMPLOYEE TEMPLATE
- WSP and ATR Intervention Matrix
Employers requiring assistance can reach out to the Services SETA support team via wspdocs@serviceseta.org.za or by calling the relevant officer.
Discretionary Grants: Expanding Skills in Priority Areas
What Are Discretionary Grants?
Discretionary grants differ from mandatory grants in that they are awarded based on strategic priorities outlined in the sector skills plan. These grants are competitive and open to a variety of entities, including:
- Levy-paying employers
- Government and public institutions
- Higher learning institutions
- NGOs and CBOs
Applying for Discretionary Grants
Applications are submitted online through the Services SETA portal during advertised windows. Employers must align their proposals with Services SETA’s identified priority skills areas to improve their chances of approval.
Self-Funded Training and Learnership Registration
Non-SETA Funded Learning Programmes
Employers who fund training out of their own budgets can still enjoy benefits by registering their programmes as learnerships. Once registered with the QCTO and SETA, these programmes qualify for tax rebates on learner entry and exit.
LMIS Registration Process
Applications must be submitted via the Learner Management Information System (LMIS), and employers must ensure:
- Learners are on their payroll or are paid a stipend
- They are Services SETA levy-paying or recognised members
This system supports accountability and ensures proper implementation of learning at the workplace.
Inter-SETA Transfers: Aligning with the Right Sector
When to Request a Transfer
There are instances when an employer may need to transfer from one SETA to another. This includes:
- Misalignment between company activities and current SETA scope
- Changes in commercial activity
- Diverse employee categories with unique training needs
How to Apply for a Transfer
To initiate a transfer, the employer must submit an Inter-SETA Transfer Application to the relevant SETA. If approved, the request is forwarded to the Department of Higher Education and Training (DHET), and then to SARS for final processing.
If denied, employers have the right to dispute the decision and escalate the matter to DHET.
Final Thoughts: Making Skills Development a Priority
Skills development for employers is not just a compliance requirement—it’s a powerful tool for growth, innovation, and sustainability. Employers who actively engage in the skills development ecosystem benefit from higher productivity, access to incentives, and a positive impact on the broader economy.
Whether through mandatory or discretionary grants, or even self-funded initiatives, every effort made to upskill South Africa’s workforce strengthens the nation’s future. Services SETA continues to provide robust support, ensuring that both employers and employees reap long-term rewards.
For more information or to start your skills development journey, contact the Services SETA team at wspdocs@serviceseta.org.za.
