Challenges regarding TVET training programs in the SA automotive industry

ABSTRACT

This paper reports on research undertaken to understand the contribution of formal Technical Vocational Education and Training (hereafter TVET) to company-level growth and transformation in the automotive sector in South Africa. The findings of this article are part of a larger research project conducted in South Africa and five other developing countries, namely, Bangladesh, Cambodia, Ethiopia, Laos, and Vietnam, to explore the contribution of TVET programs to inclusive industrial transformation and growth in the manufacturing sectors. It argues that formal TVET training does not drive workplace changes in technology, work organisation, and product change in the automotive sector. This paper challenges the current formal TVET provision policy in South Africa to recognise other forms of training provision, such as non-formal, and informal on-the-job training, in addition to company-level factors critical in shaping the skills system if we are to understand the extent to which skills enhance growth and transformation.

KEYWORDS:

• TVET
• skills training
• industrial strategy
• transformation
• on-the-job training
• non-formal training
• informal training

1. Context and background

This paper reports on the perceived contribution of formal technical and vocational education and training (TVET) training to inclusive company growth and workplace changes in the automotive sector in South Africa. The paper argues that skills training programs are likely to be more effective when aligned with training policies for workplace changes in terms of technology and industrial strategy. This implies that formal TVET provision on its own is not helpful to shape company-level growth and transformation, and does not influence the skill regime happening at a company level. The findings of this article are part of a larger research project conducted in South Africa and five other developing countries, namely, Bangladesh, Cambodia, Ethiopia, Laos, and Vietnam, to explore the contribution of TVET programs to inclusive industrial transformation and growth in the manufacturing sectors. However, the focus as it will be demonstrated is on the South African automotive industry. Vocational Education and Training (VET) not only in South Africa but the world over has become an important priority in addressing socio-economic issues and industry skills, especially in export-oriented manufacturing sectors (Baatjes et al., 2014; Kgobe & Baatjes, 2014; King, 2013; Wedekind, 2014). Kapur (2019) argues that formally acquired training such as TVET skills helps candidates to get employment opportunities in the formal workplace and also enhances their productivity. Candidates who have undergone formal training tend to be productive and more adept at withstanding workplace pressures (Samouel & Aram, 2016). This line of argument appears to have led to many TVET skills programs gaining prominence and traction becoming a priority for the government, and private donors (Baatjes et al., 2014; International Labour Organization, 2012; Kgobe & Baatjes, 2014; Wedekind, 2014). Consequently, donor funding for vocational skills appears to have also expanded over the years to support industry-based training, in particular, export-oriented manufacturing (International Labour Organization, 2012; King, 2013; Lall, 2013; Maurer et al., 2017).

Training is also seen as critical to improving employees’ competencies and knowledge which positively enhances their performance (Fachrunnisa et al., 2021). Fachrunnisa et al. (2021) argue that different types of training are implemented for specific purposes, i.e. to enhance candidates’ cognitive rationale and thinking to solve organisational problems. This paper focuses on formal TVET training in the context of South Africa, which has been identified as a catalyst to address unemployment amongst the youth, poverty, and inequality (Department of Higher Education and Training, 2014; Kgobe & Baatjes, 2014; Taylor & Shindler, 2016). The issue of formal TVET skills’ contribution to workplace changes in terms of technology, product change, and work organization – industrial/company transformation is still under-explored if, at all known, around the world (Maurer et al., 2017). Several research studies undertaken have thus far focused on the acquisition of skills for individual benefits i.e. employment and income, with little to no analysis of how these skills training help manufacturing companies to introduce new changes in terms of technology, product change, and work organization (Maurer et al., 2017). The automotive industry not only in South Africa but globally is introducing changes in the production line to improve efficiency, reduce waste, and ergonomics, and the role that skills training plays in this context of transformations in manufacturing has not been extensively explored. The available literature tends to look at the nexus between college training and work transition to improve training for employment purposes (Papier, 2017), acquisition of skills for human development (Powell & McGrath, 2019), and skills programs for training intervention path (Nkiwane & Barnes, 2017), with no deeper analysis of how skills acquisition contributes to workplace changes. This paper sought to bridge this hiatus by bringing empirical insights on the extent to which formal TVET training contributes to inclusive company-level growth and technological changes in the automotive sector, given the prioritization of formal vocational skills training not only in South Africa but also the world over (Afeti, 2018; Baatjes et al., 2014; Wedekind, 2014). It focuses on two occupations in automotive firms, namely, operators and artisans/technicians, defined as mid-skilled (MSE) and higher-skilled employees (HSE) respectively. It is structured in the following manner: The first section is the contextual background of the paper; the second section gives an overview of the TVET training system in South Africa; the third and fourth sections reflect and explain the methodology, analytical framework, data analysis, findings, and discussion; and the fifth and last section reflects on policy implications and conclusions.

2. Brief overview of the South Africa’s TVET system

The restructuring of education and training systems as a global phenomenon is mainly about raising levels of skills; improving the relationship between education and training systems on the one hand, and labour market prospects on the other hand (Allais, 2011; Kraak, 2018; Powell, 2014; Yassim et al., 2019). In the context of South Africa, the policy on public TVET provision is administered by the National Department of Higher Education and Training (DHET) and has been about the formal provision of TVET training (Akoojee et al., 2008; Allais, 2020; Allais et al., 2021; Baatjes et al., 2014; Department of Higher Education and Training, 2014; Nkiwane & Barnes, 2017; Papier, 2017; Papier et al., 2018; Sibiya et al., 2021; Vally & Motala, 2014). The TVET sector comprises vocational, occupational (a South Africa-specific term), and artisan education and training, and is a priority for the South African government for skills development (Department of Higher Education and Training, 2014; Tibane, 2018), yet receives a tiny fraction of what is allocated to universities.

This level of education and training takes place from senior secondary to one or two years post-school (but below degree level) and is seen as work-oriented (Macha & Kadakia, 2017). There are four main types or groups of TVET qualifications: the NCV (National Certificate Vocational); the Nated (National Accredited Technical Diploma Education) qualifications including the N diploma; the National Senior Certificate (Technical); and occupational certificates (at various levels). The NCV and Nated qualifications, as well as occupational certificates, are offered mainly by public and some private TVET colleges. Senior secondary school begins at grade 10 and learners can choose between an academic (general) route and a technical route, although there are only a small number of technical schools. The completion of senior secondary school in South Africa is determined by performance on a national final exam, the National Senior Certificate (NSC) also known as matric. This qualification certificate signals an exit point from the schooling system in South Africa to either university or TVET (Wedekind, 2013). It is an affirmation that a person has sufficiently completed their schooling years. While the qualification as a whole is silent if not vague on the generic skills, it nevertheless opens doors of learning to several post-schooling education institutions (Wedekind, 2013). Hence, learners who have completed senior secondary schooling can enroll in either Technical and Vocational Education and Training (TVET) to which completion of senior secondary schooling is not mandatory, or universities for which the completion of matric is compulsory (Macha & Kadakia, 2017). There is a debate internationally about what should be included in the school curriculum from the perspective of preparation for work (Massimo et al., 2013). In South Africa, the most recent of this debate is the so-called ‘three streams model’, which suggests a general, technical-vocational, and occupational matric. Policy attention on TVET internationally has intensified in recent years, as the World Bank has started advocating for building TVET systems (Allais, 2013). Despite many reforms or changes in the country’s TVET system since the dawn of democracy in 1994, it continues to emphasise the supply side of formal training with little focus on the demand side to address employers’ skills concerns in the workplace; is seen as weak and poor (Akoojee et al., 2008; Allais, 2013, 2020; Allais et al., 2021; Bhorat, 2014; Bhorat et al., 2016; Nkosi, 2017; Wedekind, 2014); and tends not to consider vocational training taking place inside companies (Allais, 2020; Allais & Wedekind, 2020; Allais et al., 2021). Notwithstanding the institutional and structural weakness of the formalization policy of the TVET system, the overarching policy of the South African government, the National Development Plan, and the Post-Schooling Education and Training (PSET) White Paper aim at expanding the formalization of the TVET sector to enroll about 2.5 million students by 2030 and produce 30,000 artisans by 2030 as an attempt to strengthen the artisanship training system in South Africa, which is seen to be of poor quality and inadequate (Department of Higher Education and Training, 2014; National Development Plan, 2010).

3. Methodology, data analysis, and analytical framework

The research was undertaken using mixed methods with two different data sources, namely, a survey instrument and an interview questionnaire. In terms of sampling process and procedures, the automotive industry in South Africa incorporates the manufacturing, distribution, servicing, and maintenance of motor vehicles, which is about 480 companies. This list was obtained through the National Government Department of Trade Industry and Competition ‘Who’s Who’ database, which houses different sector companies. The list of the automotive manufacturing companies was further verified against a company register with the Department of Trade, Industry and Competition, and two employer associations in the sector, namely, the National Association of Automobile Manufacturers of South Africa (NAAMSA), which looks after and promotes the interest of all car manufacturers known as original equipment manufacturers (OEMs); and the National Association of Automotive Component and Allied Manufacturers (NAACAM), which is the representative of the country’s component suppliers both locally and abroad.

The process of verification of these companies was threefold: Firstly, to select companies within the formal sector with more than 50 employees that manufacture locally; secondly, to identify and remove those that were not manufacturing companies; and thirdly, to exclude from the list dormant companies – those that could not be reached telephonically, via emails, and/or had no active physical address nor website. This criterion reduced the total number of suitable companies to 113 companies, inclusive of the car manufacturers and different component-manufacturing suppliers, which were surveyed and 61 of 113 completed the survey instrument. The survey was completed by senior management personnel such as human resource directors and training managers to solicit information on whether: The automotive companies have experienced skills shortages in the past five years and the perceived effect that this has had on operations and growth; the three most frequent formal training programs that each of different categories of employees (general, operators, supervisors, artisans/technicians, and management) have undertaken in the last five years before employment as well as in employment, and the perceived value of these programs to transformation and growth; the extent to which there has been transformation and growth within the company (against a set of indicators such as changes in technology, products, and increased number of employees), as well as the extent to which this has been inclusive (measured in terms of gender, race, and wages). The survey instrument and a full technical report which provides details of all the data analysis are available at https://www.wits.ac.za/real/. The survey was completed as part of a larger research project that was undertaken in three manufacturing sectors of six countries as mentioned in the introduction section. Although the findings may not represent the industry as a whole, which is a limitation, they provide broader insights into the range of dynamics, behaviours, and perceptions of these companies about growth and workplace changes in terms of technology, work organization, and product change.

The interview questionnaire was designed to determine whether companies perceive the formal TVET programs focusing on high-level skills as more significant or whether there are specific programs that companies perceive to be a necessary condition for inclusive growth and transformation. Of the 61 companies who completed the survey, 30 also indicated their willingness to be interviewed in the second phase. All of these 30 companies were sent interview invitation letters requesting interview sessions and 11 confirmed availability for interviews and this was more than what the project broadly required which was only five companies. In all the 11 companies the following personnel were interviewed: Human Resource Director(s), Production Manager(s), and Trade Union representative(s) at a time and date convenient to the company. This number consists of companies that during the survey reported to have grown and also those that reported having shrunk; the intention was to understand the extent to which formal training may have played a role. As indicated, the focus was on formal TVET training programs. In total 33 personnel were interviewed in 11 companies. As part of adhering to the ethical code of conduct, the application for ethical clearance was submitted and granted by the University of Witwatersrand ethics committee in South Africa, and the Wits University human research ethics committee (non-medical) ethical clearance number is R14/49. In terms of reliability and validity of the research and for the project requirements, both the survey and interview questionnaires (draft) were tested or piloted through three companies and one trade union, and this process led to further revision and refinement of the instruments. In terms of analysis, I calculated the number of TVET training programs mentioned by each company for each occupational level at the point of hiring and for training existing employees, and have used this to determine the extent to which companies utilize TVET training programs for pre-employment and in-employment. I ran frequencies and crosstabs for variables such as growth and transformation to determine the extent to which TVET skills training contributes to growth and transformation. Companies also mentioned their skills requirements more broadly, counting the non-formal company-based training programs, including matric certificates as a requirement, which was rather an interesting finding, and related to the conceptual framework. A matric certificate is a secondary education qualification in South Africa or school-based training that signals academic ability at the university level, thus dominated by academic or general subjects. For the interviews, I utilised the NVIVO qualitative software analysis to code data according to the emerging themes, concerning the perceived role of the TVET training programs on company growth and workplace changes in terms of technology.

3.1. Analytical framework of the study

It is important to create an alignment of the key and relevant concepts of the study. This section briefly reflects on key concepts I created as part of my analytic framework to understand their contribution to company growth and transformation. These different forms of training utilised in the paper are: Formal institutional-based TVET training, formal dual type of training also known as apprenticeship training, informal on-the-job training, non-formal workplace-based training, and secondary school-based training. These concepts have been created into a relationship with each other to understand the extent to which they contribute to industrial growth and transformation in the automotive sector in South Africa. The literature argues that formal institutional training is formally structured and intentionally planned and leads to a formal qualification (United Nations Education, Scientific and Cultural Organization, 2011). Non-formal workplace training is about the development of the company through contributing to the production, effectively and innovatively; and the development of employees through enhancing their knowledge and skills. It is seen as useful by companies because candidates or employees who undergo non-formal training are often utilized by companies to induct new employees into the culture of the company. The formal dual type of training, also known as apprenticeship training, is a training in which an apprentice acquires the skills for a trade in the working environment, trained by an experienced craftsperson, and often complemented by classroom-based instruction (International Labour Organization, 2012, 2020; Misko, 2008; Mohrenweiser & Backes-Gellne, 2010; Mulder, 2018). This type of training is different from other formal training happening in formal education institutions because apprentices are attached to the company and spend a significant amount of their time in the workplace. Informal on-the-job training that takes place on the job is company-specific and linked to new machines and is often provided by companies to employees on the job. This training is conducted intentionally but is not institutionalised, is less organized, and less structured (United Nations Education, Scientific and Cultural Organization, 2011). The school-based training gives candidates basic skills that they need for entry into the world of work. These skills are seen as crucial by employers i.e. reading and writing skills, and communication skills (International Labour Organization, 2012, 2018; Modenisto, 2016; United Nations Education, Scientific and Cultural Organization, 2011).

4. Findings and discussion

This section discusses research findings and shows that there is a lack of high technical skills such as technicians/artisans in the industry, and this problem is more pronounced in component manufacturers than it is for manufacturers. However, a lack of skills does not affect company growth. It further reveals that formal TVET skills training does not drive workplace changes in terms of technology, product and change, and work organization; rather critical factors such as industrial policy, client base increase, product demands and specifications, research and innovation expertise, and global market forces and price volatility are drivers of industry changes. It argues that technology has had a positive impact on employment and demanded new skills.

4.1. Lack of technical skills does not affect company growth

The findings show that there is a shortage of artisans/technicians in the automotive industry in South Africa and that this problem of technical skills shortage tends to affect the component manufacturing suppliers the most, and car manufacturers to a lesser extent. A possible explanation for the car manufacturers not reporting major skills problems is that they have all reported to have accredited training centers, in which they spend millions running training programs in-house. These findings seem consistent with the literature and industry reports that the automotive industry in South Africa has a serious technical skills problem (Automotive Supply Chain Competitiveness Initiative, 2016; MerSETA Sector Skills Plan, 2017). However, the shortage of artisans or technicians as reported by companies does not affect company growth. As part of addressing skills problems, companies report to train their artisans/technicians in-house through dual formal training, known as an apprenticeship program training as reflected in the analytical framework and is seen as crucial in addressing technical skills gaps in the sector. It is a structured training of vocational preparation, offered by the companies, juxtaposing part-time education with on-the-job training and work experience, leading to a recognised vocational qualification at the trade level. The findings show no major skills training problem at an MSE level and a possible explanation is that they prefer a national senior certificate from secondary education (matric certificate), with Mathematics, Science, and English as entry requirements signalling the ability to read and write, which as explained in the analytical framework, is important for employers. The ability to read and write at an operator level is crucial for companies when providing various forms of workplace training which helps to address skills needs. There is a relationship between secondary education and in-house training in the workplace, which is critical for employers to address literacy and numeracy gaps.

Although some component suppliers report having MSEs who have had TVET training, this did not help them with skills needs. Moreover, TVET graduates undergo further training in-house, as TVET training is seen as poor and weak for company skills needs, a finding consistent with the literature as reviewed. The component suppliers attribute the TVET weaknesses to the absence of the industry coordinated partnership with colleges, and the general lack of TVET trainers with industry experience and background. At the HSE level, all companies prefer formal training or qualifications such as trade tests for artisans, and engineering national diplomas and experience for technicians. At this level, companies report having recruited candidates with university degrees or universities of technologies, and to a lesser extent from TVET colleges.

4.2. Formal TVET kills do not drive technological changes in the workplace

This section shows that firm changes in the workplace in terms of technology, work organisation, and product change are influenced or driven by critical factors, not by formal TVET training as the research anticipated. The findings suggest that skills play an additional role in this regard, as they are not a key determinant of changes in the workplace. Firstly, product demands and specifications appear to be central to firm transformation in the workplace and this was confirmed by all companies. Secondly, the national industrial strategy is seen by all companies to have played an important role in companies making new changes in technology. Thirdly, seven component manufacturing suppliers report that research and innovation expertise conducted through their head offices outside South Africa also influence them to change technologies, playing an important role in understanding global market trends, which shape or influence technological changes. There seems to be a growing trend that company head offices located outside South Africa often employ their skills and training expertise, infrastructure investment capacity, and research & development (R&D) to forecast the global market and industry trends. This helps them [the head offices] to plan, design the latest new machines and equipment for deployment in the value chain, and make decisions that bind local subsidiaries [SA-based companies]. This finding is consistent with the literature that the design and decisions on new and latest technology are decided upon outside South Africa by the local subsidiaries’ head office and this in the literature is attributed to foreign ownership in the South African automotive industry, and the introduction of the Motor Industry Development Programme is seen to have facilitated foreign control (Barnes & Black, 2013; Black, 2011; Masondo, 2018). Fourthly, global market forces and price volatility influence technological changes for companies to keep up with global trends, and this is also confirmed by all the senior management and production managers. The fifth driver is competition among companies that manufacture the same products; this is seen as important to keep companies on their toes and follow trends, thus, re-investment in new equipment is essential for both industrial transformation and market growth. For example, all 11 companies report that competition has influenced technological changes. Confirming the competition as an enabler of transformation the Production Manager from SA69ABA (another pseudo name), a component company (interviewed on 28 October 2019) said, ‘We bought the machines to upgrade our production efficiency and also to compete with other firms in the value chain and produce goods faster at a reduced time’. The importance of competition is also consistent with the literature and is attributed to the Motor Industrial Development Programme (MIDP), which is the first national industrial policy for the automotive industry adopted by the government after the 1994 democratic elections in South Africa to improve local industry’s global standard in terms of competitiveness (Department of Trade and Industry, 2007a, 2007b, 2009, 2012; Lamprecht, 2009; Mashilo, 2010). The sixth driver common to all 11 companies is new regulations on emission(s) demanded by the government through the industry, which are getting stricter. These emissions regulations according to the Production Manager from SA286E (pseudo name), which is a medium component supplier (interviewed on the 29th of October 2019), ‘are getting tighter and they require more expensive rare-earth metals that are difficult to get in some countries’. So companies have introduced new machine equipment in line with new regulations demanded by the industry in line with government regulations. It is through these factors that influence transformation in the workplace that skills training appears to play an additional role.

4.3. Technology had a positive impact on employment and demand for new skills training

Technological changes have had a positive impact on employment and demanded new skills. Companies report that as they buy new machines to enhance production, improve efficiency, and reduce waste they also require skills to operate these machines. The findings show that there is greater usage of formal training programs including TVETs at the point of recruitment and selection of candidates, which increases with high levels of skills. This finding seems consistent with the argument that effective delivery of the TVET curriculum is crucial in enabling students’ knowledge and competencies that will equip them to have a competitive edge in the work of work (Rudhumbu, 2021). The findings seem to confirm the argument (Fachrunnisa et al., 2021; Rahman & Bockarie, 2022) that training and development in most organizations is an essential part of human resource development.

Technological changes have had a positive impact on employment opportunities, and this was confirmed by all nine component suppliers. Describing the employment expansion attributed to new technology, the Trade Union Representative from SA286E (pseudo name), reported that “the introduction of ZECT line 2 led to robots being introduced, and the manual work is now being carried out by the robots, and the company has hired two additional employees to complement the robots and work in the new line’’. The hiring of new additional employees ‘was not that there was a lack of skills internally, but it was more to increase employees instead of reducing them’. Furthermore, changes in technology have led to reskilling and upskilling of workers rather than retrenching them, although the trade union representative revealed that ‘there was re-deployment of workers after reskilling and upskilling’. The Trade Union Representative from SA6D165, an OEM – a car manufacturer – explains how the new technology led to training as well as the expansion of employment saying that ‘the robots were introduced massively in the press shop and body shop and demanded new skills, thus the company through our insistence retrained and upskilled workers, on top of poaching from other companies for skills’. The production managers in the very same company seem to agree with the trade unionist that robotic machines have not led to retrenchment, instead having created more jobs and required new skills. This was further confirmed by the Production Manager from SA286E (pseudo name), a component company that:

The introduction of technology did not lead to the retrenchment of employees. Instead, we employed more people with high skills, such as chemical engineering diploma qualification for group leader positions, and for operators, the requirement stayed the same.

There was only one component supplier where the introduction of machines could be argued to have displaced workers. In this case, the HR Director SA707CB, a component supplier reported that ‘they were not dismissed per se or retrenched because of skills redundancy; instead, they took a voluntary retirement package, despite the company offering the opportunity to go and study and other reskilling programs’. He was also supported by the union in this perspective in the same company SA707CB, and said, ‘This was not the first option, but our members especially those who were without senior secondary certificate and old, voluntarily left with packages, despite the company offering training and for them to study’. This concludes that contrary to the dominant narrative of technology destroying jobs, it has – at least in the companies that have been interviewed – created employment opportunities requiring new skills in the work-organization process in the production, and employees instead of being dismissed have been working with robots.

5. Policy implications, limitations, recommendations, and conclusions

Skills do not appear to drive industrial growth and transformation in the South African automotive sector but rather play an additional role. Furthermore, training happening in-house at a company level is perceived as crucial in addressing company skills needs at various occupational levels. In addition, skills training programs are likely to be more effective when they are aligned with training policies for workplace changes in terms of technology and industrial strategy. These trends have implications for TVET policy in South Africa, which as indicated in the overview section tends to be strongly oriented towards formal provision with little recognition of other forms of training i.e. informal-on-the-job, and non-formal company-based training. There is a need to rethink skills provision in South Africa, which must consider firm-level skills dynamics as they are crucial in shaping the skills formation system at the company and sectoral levels. As indicated in the methodology section, the automotive industry consists of manufacturing, distribution, servicing, and maintenance of motor vehicles, but the focus of the study was on manufacturing companies only, and not all companies participated. This is the main limitation, as the findings do not represent the sector as a whole. Similar research may be carried into other sectors. This will enhance and help the state on how to restructure TVET programs or a skills system in partnership with the industry, and the extent to which an industry-TVET alliance can be forged that is more practical. Furthermore, the policy debates related to improving the quality and relevance of TVET programs and provision systems and strategies have to be more nuanced to enhance skills utilization to the industrialization growth nexus.^1,2

Acknowledgments

The research was conducted as part of my doctoral thesis at Wits University in South Africa, which formed part of the Skills for Industry Project, https://phzh.ch/en/Research/skills-for-industry/, funded by the Swiss Agency for Development and Cooperation and the Swiss National Science Foundation through the Swiss Programme for Research on Global Issues for Development. Additional support was obtained from the SARCHI Research Chair in Skills Development, funded by the South African National Research Foundation.

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Funding

This research work was supported by the South African National Research Foundation through the SARCHI Chair in Skills Development; and the Swiss Programme for Research on Global Issues for Development, a joint initiative of the Swiss Agency for Development and Cooperation (SDC) and the Swiss National Science Foundation (SNSF).

Notes

1. Skills for Industry: https://phzh.ch/en/Research/skills-for-industry/. The other countries are Bangladesh, Cambodia, Ethiopia, Laos, and Vietnam.

2. This was a project-wide decision – to focus on formal firms and to exclude very small firms.