Sector skills planning and plans in the midst of the coronavirus outbreak

1. OCCASIONAL PAPER
SECTOR SKILLS PLANNING AND PLANS AMID THE
COVID-19 PANDEMIC
APRIL 2020
Prof Hoosen Rasool

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Occasional Paper: Skills Planning and Plans in COVID-19
INTRODUCTION
The onset of the COVID-19 pandemic and its devastating socio-economic setbacks will
decisively change the skills planning agenda and Sector Skills Plans (SSPs) in South Africa.
The sector skills planning process for 2020-2021 would need to capture an accurate picture
of the state of the economy and labour market. It means that the impact of COVID-19 on
students, employers, employees and the unemployed should be thoroughly researched to
avoid the risk of sending misleading signals for public investments in skills development.
The Department of Higher Education and Training (DHET) has extended the date to submit
the 1st draft Sector Skills Plans (SSPs) 2020-2021 from the 15 June 2020 to 15 July 2020. This
effectively covers the lockdown period since 27 April 2020 and the decline in economic
activity.
STIMULUS PACKAGE
On the 21 April 2020, President Cyril Ramaphosa announced an historic stimulus package
of R500 billion amounting to about 10% of GDP. It involves “embarking on the second phase
of our economic response to stabilise the economy and address the extreme decline in supply
and demand and protect jobs”.1
This is expected to be followed by a third phase “to drive the recovery of our economy as the
country emerges from this pandemic. Central to the economic recovery strategy will be the
measures we will embark upon to stimulate demand and supply through interventions such
as a substantial infrastructure build programme, the speedy implementation of economic
reforms, the transformation of our economy, and embarking on all other steps that will ignite
inclusive economic growth”.
1
Statement by President Cyril Ramaphosa on further economic and social measures in response to the COVID-19 epidemic,
Union Buildings, Tshwane, 21 April 2020

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Occasional Paper: Skills Planning and Plans in COVID-19
The government is also “introducing a 4-month holiday for companies’ skills development
levy contributions”.
These developments have skills development implications and should be considered in sector
skills planning and plans.
LABOUR MARKET
The effects of the COVID-19 pandemic on employment and unemployment is already
apparent. The UIF is facing a massive uptake in UIF claims from retrenched workers and
applications from employers for COVID-19 relief for furloughed employees. The scale and
speed of these claims are unprecedented and has put the UIF system under intense pressure.2
Statistics SA has conducted a rapid response survey of 707 businesses in the formal sector
during the lockdown for two weeks, from 30 March to 13 April 2020.3 It asked businesses
how the current crisis is affecting their operations, turnover, trading, workforce, imports and
exports, purchases, prices, and business survival.
The findings are not only concerning, but has ramifications for sector skills planning and plans:
• Four in ten businesses feel that they cannot continue to operate. In essence, 42,2% of
respondents indicated that they are not confident that they have the financial resources
to continue working through the COVID-19 outbreak. 54% of respondents indicated that
they could survive without turnover between one to three months.
• Almost half of responding businesses have temporarily closed their doors: The
industries reporting the highest percentages of temporary closure or paused trading
activity were construction, manufacturing, trade, and mining.
2https://www.businesslive.co.za/bd/opinion/2020-04-16-COVID-19-has-exposed-the-gaping-inequalities-in-sas-labour-
market/
3 http://www.statssa.gov.za/publications/Report-00-80-01/Report-00-80-01April2020.pdf

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• Half of the respondents expect that their workforce size would stay the same: 50,4%
of respondents expected no change their workforce size over the two weeks following
the reference period, while 36,8% expected their workforce size to decline. Businesses
indicated that they had implemented a range of measures to cope with the impact of
the pandemic on their workforce, including decreasing working hours (28,3% of
respondents) and laying off staff in the short term (19,6% of respondents). Only about
one in four businesses indicated that they had not taken any measures yet.
• Five in six companies have experienced a drop in turnover: Asked whether turnover
was within its normal range in the period 30 March–13 April 2020, 85,4% of respondents
surveyed reported turnover below the normal range. Respondents in the construction,
real estate and other business services, and transport industries were the most affected
by lower than expected turnover.
• Almost two-thirds of businesses feel that this will be worse than the 2008/09
recession: Many companies (65,0%) anticipate that the impact of the COVID-19
pandemic will substantially be worse than the 2008/09 global financial crisis. Only 4,3%
of respondents indicated that the impact would or could be the same.4
The strength of the data is that it provides a quick snapshot and valuable economic insight in
real-time into the impact of the COVID-19 pandemic on South African businesses.5
DATA DISTORTIONS
The tools, data sources and literature that we use for skills planning will become distorted
and harder to interpret for several reasons. The suddenness of the crisis means that national
accounts and other data sources do not reflect the current state of the economy and labour.
Moreover, the full measure of the meltdown will be felt in the months ahead. COVID-19 has
effectively broken the trend analysis in economic and labour market statistics. We cannot
extrapolate from pre-COVID-19 charts.
4
Statistics SA, Business impact survey of the COVID-19 pandemic in South Africa, 21 April 2020.
5
Micro businesses (with an annual turnover below R2 million) were not included in the survey.

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Occasional Paper: Skills Planning and Plans in COVID-19
The bottlenecks in the UIF is artificially holding down the number of employees who can file
for unemployment benefits and COVID-19 relief. The conventions that generally make it easy
to compare labour market numbers over time, like adjusting for seasonal variations and
converting quarterly growth numbers to annualised numbers, are more likely to create
confusion than give a clear picture.
As employers restructure their operations, the employment status (permanent, temporary,
full-time, part-time, casual) of many employees will change. This will muddle workforce
numbers, especially if employers define the status of workers differently.
QUARTERLY LABOUR FORCE SURVEY
Statistics SA is expected to release the 1st Quarter Quarterly Labour Force Survey 2020 on
the 12 May 2020. The QLFS is commonly used for the development of SSPs. However, field
operations for the collection of QLFS data stopped on the 20 March 2020.6 The next steps are
unclear. The restrictions necessary to combat COVID-19 are creating a huge obstacle to
normal data collection approaches and operations, exactly at the moment when there is a
massive increase in demand for information. The situation is rapidly evolving, making normal
planning impossible.
The full impacts of COVID-19 on labour market statistics operations and time series will only
be known over a longer period of time. Maintaining a flow of data will be an important
achievement, with any supplementation to existing data series a very valuable contribution.
SETAs will need to explore other ways to obtain credible data for sector skills planning. There
is no right or single solution.
6 https://ilostat.ilo.org/topics/covid-19/covid-19-impact-on-labour-market-statistics/

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COMPANIES
Company closures, restructuring and downsizing will change the profile of the labour
market. The relief measures to support small businesses during the crisis is proving
inadequate to need. These will further exacerbate closures. We can expect unemployment
and under-employment to increase. There will be greater competition for jobs. Many
occupations that were identified as in short supply may become surplus. The list of sector
occupations in demand may change, as will skills gaps.
Companies will surgically cut costs with the collapse of business activity during the
lockdown. We can expect management to assess every aspect of the internal value chain of
the organisation.
The pandemic has enabled companies to experiment with new organisational architectures
during the lockdown. It is no longer necessary for every employee to report to the workplace
daily. Applications such as Skype, Zoom and Microsoft Teams are used effectively to get the
work done. In the aftermath, we can expect organisational structures to change in varying
degrees, depending on the nature of business activities. This will reduce expensive real estate,
rental, operational and payroll costs.
Some companies may retain a core team full-time and use outsourced contractors or
temporary workers. Flexible work arrangements will become the norm. Contractors can be
hired when needed, and the work team can be flexed up and down in real-time. In this
scenario, companies will require new skillsets to adapt to their new business models and the
post-COVID-19 environment.
There will be new priorities if we are to protect workers when they return to the workplace
with implications for skills training. For instance, the World Health Organisation (WHO)7
recommends the following to minimise the direct effects of the coronavirus:
7 https://www.who.int/docs/default-source/coronaviruse/covid-19-sprp-unct-guidelines.pdf

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• Improve occupational health and safety (OSH) measures, including social distancing,
provision of protective equipment (especially for health and allied workers, volunteers
and others in permanent contact with people), hygiene procedures, forms of work
organisation (supported by information and awareness campaigns), and thorough social
dialogue between employers and workers and their representatives.
• Encourage appropriate flexible working arrangements such as teleworking.
• Prevent discrimination and exclusion relating to COVID-19.
• Enhance universal access to collectively-financed health services for all, including
uninsured workers and their families.
• Expand access to collectively-financed paid sick leave, sickness benefits and
parental/care leave to ensure income security for those who are suffering, quarantined,
or caring for children.
IMPACT ON JOBS
While the government seeks ways to exit from the crisis, COVID-19 will have an impact on
employment, work, jobs, and skills.
Here are some of the trends that we can expect in the future:
Full-time jobs will diminish and the Gig economy will grow: Jobs that do not add value to a
company will disappear. Paper pushers will be reduced dramatically, and so will be the high
salaried jobs that do not justify their cost. In turn, companies will move to hire freelancers
and a contract workers to carry out more tasks. Companies will look to reduce their fixed

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overheads and find ways to outsource as much as possible, except the core jobs with a direct
impact on the organisation’s intellectual capital.8
Remote and digital working will become the new norm: Mass remote working for prolonged
times will make people more skilled in remote working. It will also change the behaviour of
people and expectations from companies. Technology will improve significantly to provide
not only remote working but also remote post-schooling. Homes will start having a home
office to qualify for jobs in the future. The digital will replace the physical wherever possible.
Social distancing will encourage people to work remotely.9
Employment relations will become flexible: The first reaction to a financial crisis is cutting
costs. Since salaries are a huge cost in any company, it will come under the knife. Companies
will prioritise key performance outcomes instead of attending the workplace. Slack will be
removed from the payroll. South Africa was already in a recession before the pandemic. The
economy was in deep trouble. Businesses were closing, exports were down, and
unemployment was up. Companies will look to atypical employment contracts to survive in
lean times.
Employee accountability will be a pre-requisite: The employer will demand employee
accountability when a job position is created: accountability to take individual responsibility
for one’s actions and development; accountability to work proficiently; accountability to add
value to the company. Employees that do not meet these demands will find job security
elusive.
New jobs of different kinds will be created: The process of job shifts and new occupations
was firmly underway with the advent of 4.0 industry before the crisis. This process will be
sharply accelerated when we return to “normal”. Although technology and the crisis will take
away millions of jobs, new ones will be created.
8
COVID- 19 Impact On The Jobs Of Future While governments and citizens are finding ways to come out of this
unprecedented catastrophe, experts in SCIKEY are analysing the impact of COVID19 on the future of jobs. ?
9
Ibid.

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With COVID-19, healthcare, online retail, food production, remote learning,
telecommunications, cybersecurity, wellness sector, logistics and technology will get a
tremendous boost and create more jobs. There is already a global demand for healthcare and
IT professionals, care workers, frontline jobs and community workers.
Return of manufacturing: Manufacturing sectors that are pivotal to healthcare,
pharmaceuticals and food security will be localised to respond to future pandemics. Small-
scale manufacturers will re-emerge and start creating small job opportunities to meet just-in-
time demand. The local clothing and textiles industry is given a new life with the need for PPE.
The destruction of the South African Rand against the world’s major currencies will encourage
wholesalers and retailers to source locally.
Skilling will overtake credentialing: Businesses will hire people who possess the attitude
and skills to get the job done. Credentials in the form of degrees and certificates will matter
less for companies that want to improve profitability. Remote and online learning will grow
exponentially. Short courses and micro-learning will gain traction as a legitimate form of
learning. Quick deskilling, reskilling & up-skilling that will enhance the rapid adoption of e-
learning tools & platforms will become popular.
Employees will need to engage in life-long learning and acquire skills faster to remain in jobs.
The ability to adapt to the changing nature of work will mean more than the number of
qualifications on a CV. Charles Darwin’s quote, “It is not the strongest of the species that
survives, nor the most intelligent that survives. It is the one that is most adaptable to change”
is as relevant now as it was then.
Graduates will be expected to be work-ready: Graduates will be expected to “hit the ground”
running if they want to find employment in whatever form or join the Gig economy.
Companies will be reluctant to train graduates due to time and cost pressures. Graduates can
also expect competition from the older generation who will now be looking for new jobs and
even ready to accept lower salaries.

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Entrepreneurship will grow: As jobs become scarce, entrepreneurship will become a
prominent option for millennials. The COVID-19 crisis will level the playing fields as most
companies have to reboot. It will give new-comers with fresh ideas a fighting chance to find
niches in the marketplace.
Public service for the 21st century: Public service organisations cannot function on a century-
old business model. They will be expected to respond speedily, efficiently, and flexibly to
service delivery, especially in times of crisis. It will require a new kind of thinking in the public
service.
CONSIDERATIONS FOR SKILLS PLANNING AND PLANS
The pandemic has disrupted not just the current skills planning agenda but our lives. It has
drained the proverbial swamp and exposed the country’s vulnerabilities in areas such as
public health, governance, education and training, social welfare, local government, housing,
sanitation, and water provision. COVID-19 has refocused our attention on our greatest
challenges - inequality, poverty, and unemployment. It has compelled decision-makers to look
at what matters most for the well-being of people and society. At some stage, the pandemic
will pass. What will not change is the trajectory it has put us on.
Sector skills planning and plans should engage with these new realities. Supply-side
organisations such as SETA and training providers can only remain relevant if they respond
appropriately to the needs of society. These responses must be reflected in future Sector Skills
Plans and training budgets. It cannot be business as usual.

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Prof Hoosen Rasool
Lead Researcher
hoosen@frresearch.co.za