Scarce Skills in the Fasset Sector

Revised : 15 March 2007

Foreword

This scarce skills guide is the second in a series of guideline documents released

by Fasset. In early 2006, Fasset released the first guideline document.

Interested stakeholders wishing to identify scarce skills within the Fasset sector

will be able to make use of this document. Educationalists, learners, parents,

policy-makers, and education and training providers will find it relevant for career

and scarce skills planning processes. By providing information, this will enable

users to keep abreast of the needs of sector. With this knowledge, those

interested in scarce skills will be better equipped to address the shortage of skills

in the finance and accounting sector.

This guideline clearly expresses the

enormous and serious shortage of

financial professionals in the sector

(and outside of the Fasset sector),

specifically in the black1 and disabled

population groups. The Fasset

interventions reflect our alignment to

addressing the skills shortages and

the commitment of the sector to skills

development and transformation.

1 The term ‘black’ includes African, Indian and Coloured individuals.

Wishing all users the best in their

application of information contained

within this guide.

Cheryl James, CEO

Scarce Skills Guide 2007 Updated 15/03/2007

1

Introduction to Fasset

Fasset is one of more than 20 Sector Education and Training Authorities

(Setas) established in terms of the Skills Development Act of 1998 (SDA).

Encouragement of training in South African employers, via the recovery of a

Skills Development Levy (SDL)2 as grants claimed from the Seta, is one of the

central aims of the SDA.

Setas are also required to address skills shortages in their sector via

interventions as decided from time to time by the Seta Management Board.

Firms are required to register with a Seta according to their core business

activity.

Fasset is the Seta for firms working in the accounting, finance, management

consulting and other financial services industries. These industries are

represented on the Fasset Management Board, who are guided in their

strategic decision-making by the Vision and Mission of the Seta.

Fasset Vision

Fasset sees its role as:

To influence the effective operation of the labour market,

through effective skills development, so as to ensure the

appropriate supply of competent labour necessary to compete in

the global economy.

In order to achieve our vision, we have set out the mechanisms in the mission

statement.

2 Collected through the Skills Development Levies Act of 1999.

Fasset Mission

In order to achieve the vision of the Seta, a number of broad goals are

reflected in the mission statement. Our mission statement reads:

To improve the competence of employees and potential employees,

thereby enhancing productivity in the sector

To increase the level of investment in education and training in this

sector and to optimise the return of this investment

To encourage employers and employees to adopt a culture of life-long

learning

To ensure the quality of training and education in the sector and to

support the development of standards in line with the NQF and to

actively promote these standards

To expand the provision of education and training in the sector through

sound partnerships with public and private providers of education and

training

To enhance co-operation between the public and private sectors

To support the objectives of the Employment Equity Act of 1998

To enhance access to learning opportunities in the sector

To position the sector as the 'sector of career choice' for prospective

learners and new entrants into the labour market.

In order to position the sector as the 'sector of career choice' for prospective

learners and new entrants, and ensure that the demand for certain skills is

met by the supply of these skills, a number of interventions will be required by

the Seta. School leavers deciding of a course of study and employees looking

to further their education and skills, will be able to consult this scarce skills

guideline document in order to determine where the demand for skills lie in

the Fasset sector, and obtain more detail on the educational routes available

to acquiring specific skills.

Beyond the focus of the Fasset sector, the addressing of scarce skills has a

broader economic benefit to the South African economy. In order to ensure a

healthy and thriving economy; shortages of skills must be addressed as skills

development is a catalyst to a productive and wealthy nation.

Fasset, in line with its mission statement, has conducted research into what

skills are in demand and scarce in the sector, and have made this research

available to its stakeholders via this booklet.

What is a Scarce Skill? What is a Critical Skill?

The term ‘scarce skill’ refers to those occupations that are characterised by a

scarcity of qualified and experienced people (current and anticipated). In other

words, occupations in which numerical imbalances exist in employment

because of a difference between the demand for and the supply of skills.

The term ‘critical skill’ refers to particular elements of an occupation, or the

qualitative deficiencies that may exist or develop in the skills apparatus of the

existing workforce.

A company may experience a shortage of Chartered Accountants (CA’s) in

their local economy. For example, due to the migration of students to Cape

Town from e.g. De Aar in the Northern Cape, there may be difficulties in

recruiting and retaining CA staff. This shortage is a scarce skill.

Should the existing CA’s in De Aar have a knowledge gap in the area of e.g.

GAAP, as trainers may not wish to make the drive to De Aar, and such a skill

is important to the functioning of a CA, this skills gap is referred to as a critical

skills gap.

A skills need may arise from the business environment and the labour market

situation. The skills needs of the sector can be seen in terms of the need for

new workers, the development of skills in critical skills areas, and the

rectifying and prevention of the formation of skills gaps.

In addressing the skills needs of the sector, provision should also be made for

opportunities for career advancement, transforming the population group

profile of the sector, increasing the absorption of unemployed youth,

increasing the employment of people with disabilities and addressing

institutional constraints that may hamper skills development.

The Development of New Workers

The sector needs to ensure that the flow of new entrants into the labour

market is sufficient to fill new employment opportunities as well as to replace

workers who leave the labour market or the sector. A large enough flow of

new entrants to the labour market will prevent the development of new areas

of scarcity and the exacerbation of existing skills shortages. The population

group (including race, gender and disability) composition of new entrants in

the labour market is of critical importance to the attainment of transformation

and equity objectives.

Growth in Demand

The legislative and policy changes that have a bearing on corporate

governance and financial and accounting practices in the public and private

sectors all tend to stimulate the demand for the financial services offered by

the Fasset sector. The demand for financial services is also driven by

economic growth.

A particular challenge for the sector is to replace people who have moved out

of the labour market or out of the sector. Although some recruitment has

occurred from other sectors, the general trend is rather for people to enter into

financial occupations via the Fasset sector and then to move into other (more

senior) positions in other sectors. This leaves Fasset sector with the

responsibility to train more people than it otherwise would have trained.

The loss of skilled personnel is not limited to the local labour market –

permanent emigration and temporary employment abroad are causing a

substantial drain of people with financial skills in South Africa.

Growth in Supply

If one looks at the output of the higher education sector, it seems as if the

supply of skills is growing at a sufficient pace to keep up with the growth in

demand. However, the Fasset sector is by no means the only sector that is

drawing from this skills pool. At this stage, little information is available on the

demand for financial skills in the total economy. A direct comparison cannot

therefore be made between demand and supply. Another key question is

whether the higher education system will be able to sustain its growth,

especially in the midst of the current restructuring of the sector and the

changed subsidy formulas applied by the Department of Education.

The increase in the numbers of black graduates in the general fields of

commerce, business management and business administration should to

some extent ease the pressure on the sector to change its racial profile.

However, the change in the specialised field of accounting is slower and

requires more focused attention. As this problem has its roots in the school

system, especially in the number and quality of Grade 12 passes in

mathematics, it should be addressed from this level and upwards.

Professional qualifications are highly valued and sought after in the Fasset

sector. For certain functions (e.g. the audit function), professional

qualifications are a prerequisite. The pace at which professionals qualify is

therefore a critical issue in the supply side of the market.

Current Scarce Skills

Scarce skills manifest in unfilled positions that exist over prolonged periods of

time, in above-average growth in remuneration and in the inability of small

organisations and rural areas to attract skilled people. Research shows that

scarce skills already exist in the sector, mainly in the professionals, and

technicians and associated professional occupations. These occupational

categories are also experiencing above average growth. However, it is

evident that the shortages are often related to very special skills sought by

employers.

The lack of qualified blacks is experienced as a serious problem, especially in

the higher level occupations and professional designations. Many (especially

large) employers find it difficult to meet their employment equity targets

because of the unavailability of suitably qualified black staff.

Listing scarce skills is challenging for organisations in the Financial and

Accounting Services Sector, which comprises mainly small professional

organisations. In these organisations, skills shortages are seldom reflected in

formal vacancies. The organisations tend to grow by taking in more partners

or directors or by taking in more learners on professional learnerships. A small

organisation with growth potential may continue to search for new talent, but it

will not necessarily create posts or have vacancies. However, vacancies

provide some indication of scarce skills.

When asked why they could not fill these particular positions, employers cited

reasons that were all linked to skills shortages or the scarcity of skills. Those

most frequently mentioned were:

Lack of suitably qualified individuals

Lack of suitably qualified black individuals

Lack of suitably qualified people willing to work in certain geographical

(mostly rural) areas

High salaries demanded by applicants

Lack of skilled individuals in the particular business area.

The following occupations have been reported as scarce.

Ran

kin

g

OccupationNeed

for Period *

% of total

need

1 Accountants 616 352 Corporate (Administration & Business) Services

Managers228 13

3 Contract, Program and Project Administrators 157 94 Finance Managers 133 85 General Clerks 114 66 Secretaries 94 57 Other Project Managers not elsewhere classified 47 38 Economists 40 29 Bookkeepers 36 2

10 Financial Investment Advisers and Managers 31 2* 1 April 2006 to 31 March 2007

(The number of people needed has been summed to the 4-digit level of the OFO.)

Current Critical Skills

The people working in the Financial and Accounting Services Sector,

especially professionals, have a constant need for skills development and

therefore critical skills (as currently defined by the Department of Labour) will

probably always exist among a large proportion of the employees in the

sector. For example, it is imperative for many of the professionals to stay

abreast of changes in the tax legislation and other changes in the tax regime,

changes in financial reporting practices and requirements and new computer

software. Some of the critical skills also stem from insufficient training prior to

entering the labour market.

Specialist financial skills are the most important critical skills in the sector and

they are required across all occupational groups. The total list of critical skills

identified by the sector is summarised below. The skills are grouped into six

broad categories and listed in order of priority within each category.

Management and leadership

Specialist financial

Information technology

Communication, customer care and marketing

Support and administration

Personal development

The skills are grouped into six broad categories and listed in order of priority

within each category.

Management and leadership Management skills/leadership skills

Human resources management skills

Workflow and imaging skills

Organisational development/office management skills Specialist financial

Accounting skills

Knowledge of taxation, including VAT and capital gains tax

Bookkeeping skills

Auditing skills

Knowledge of commercial and statutory law

Insurance knowledge

Financial and mathematical skills

Investment and micro-lending training skills

Information technology Computer skills, e.g. word-processing and spreadsheet skills

Specialist information technology skills

Communication, customer care and marketing Communication skills

Marketing skills

Public relations skills

Presentation skills

Client service skills

Support and administration Administration skills

Secretarial skills

Business economics skills

Clerical skills

Reception skills

Personal development People skills

Education/Basic adult education skills

Professional bodies confirmed the need for financial skills across a broad

spectrum of workers in the sector. In the financial market, general financial

and mathematical skills, knowledge of financial market instruments and

financial market analysis, trading knowledge, and computer knowledge and

skills were identified as areas of need.

In the management consulting profession, practitioners need to know what

constitutes ethical behaviour. This subsector requires a combination of

managerial expertise, industry knowledge, technical knowledge and an

understanding of management issues.

In the public sector, a need exists for the following skills:

Literacy and numeracy skills

Basic accounting skills, especially in respect of new people who enter

organisations in entry-level posts

Accounting support skills (e.g. those needed by accounting

technicians)

Auditing skills

Financial management skills

Experience and training in credit control and debt management

Risk assessment skills

Computer literacy

Management skills for newly appointed chief financial officers

Experience in statistical models, econometrics and macro-economic

modelling

Knowledge of and experience in supply chains

Financial sector policy advisory services and

Exposure to public finance coupled with analytical skills with regard to

budgeting, strategic planning and information overload assessments

Addressing Scarce Skills with Learnerships

The existence of Scarce Skills may be filled with the learnership. A list of the

learnerships falling within the Fasset scope are listed below.

TITLEN

LRD

N

o. NQF

PROFESSIONALBODY

1 Professional Qualification: Chartered Certified AccountantThe Chartered Certified Accountant Programme confers the designation ACCA. Members are recognised to perform the Audit Function in the UK and certain European and other countries. Employees without formal tertiary qualifications gain access by means of the ACCA Certified Accounting Technician Programme.

2039

9

7 Association of Chartered Certified Accountants (ACCA )

Ms Nirri Nair or Ms Tonia Couloubis

(011) 459 1900nnair@acca.org.za /

couloubis@acca.org.za

2 Certified Accounting TechnicianCertified Accounting Technicians function as accounts support staff offering assistance to professional Accountants. This qualification affords access for employees without formal tertiary qualifications, to the ACCA Chartered Certified Accountant designation.

2039

7

5

3 Professional Qualification: Chartered Management AccountantAllows learners who meet the minimum entrance requirements and successfully complete this qualification to register as Chartered Management Accountants with the designation ACMA. 20

400

7

Chartered Institute of Management Accountants (CIMA)

Ms Natercia Faustino(011) 268 2555

natercia.faustino@cimaglobal.com

4 National Diploma: Management AccountingIdeal for individuals moving into management positions and for those who wish to begin specialising in Management Accounting. Includes, among others, the roles of Cost Accountant, Accountant, Management Accountant and Financial Manager.

2440

6

6

5 National Certificate: Business AccountingIdeal for learners entering the workplace who will be involved in providing accounting support services and also aimed at current employees in similar positions who require a formal certificate in basic accounting skills.

2441

8

5

6 Post Graduate Professional Qualification: Professional Accountant in BusinessCommercial and Financial Accountant: Commerce and IndustryCommerce and Industry members of the Institute provide a number of accountancy related services to companies, close corporations, partnerships, sole proprietors, trusts and various other types of small business and non-corporate undertakings.

2039

2

7 South African Institute of Professional Accountants

(SAIPA)Mr Rishard Mahomed Habib

(011) 486 0283habib@saipa.co.za

TITLE

NLR

D

No. NQ

FPROFESSIONAL

BODY

7 Post Graduate Diploma: Professional Accountant in PracticePractising members of the Institute perform duties as an Accounting Officer and provide a number of accountancy related services to companies, close corporations, partnerships, sole proprietors, trusts and various other types of small business and non-corporate undertakings.

2039

1

7

8 Certificate: Accounting TechnicianEnables new entrants into the financial sector to become proficient in their career as an Accounting Technician or Accounting Support Professional. Learners support and assist senior professionally qualified Accountants in the fields of finance, management accounting, taxation, auditing and payroll.

2040

2

5

FassetMr Aboo Amod(011) 476 8570

aboo.amod@fasset.org.za

9 Certificate for Registered Accounting ClerkRegisted Accounting Clerks assist Bookkeepers and Accountants. They are entitled to register as Certificate members of the Institute with the designation CICB(SA) and access the Registered Bookkeeper qualification.

2036

2

3

Institute of Certified Bookkeepers (ICB)

Wedaad Shira(021) 421 1110

enquiries@icb.org.za

10

Certificate for Registered BookkeeperRegistered Bookkeepers assist Accountants and Financial Managers. They are entitled to register as Associate members of the Institute with the designation AICB(SA) and access the qualifications of, among others, the IAC and SAICA.

2036

3

4

11

National Diploma: Technical Financial AccountantFinancial Accounting Technicians undertake basic Bookkeeping and Accounting procedures in a variety of situations. They function within general Accounting and Financial Management roles where they lend support to the Accountant and/or the Financial Manager.

3621

3

5

12

National Certificate Small Business Financial ManagementSpecifically designed for those learners who are, or wish to become, owner-managers and for learners who are responsible for the keeping of financial records of a small business. 48

736

4

13

Certificate: Office AdministrationThe learnership in Office Administration is aimed at people in clerical and administrative positions in all businesses in all industries. An Office Administrator provides a supportive role in any business. 23

618

5

14

Certificate: Public Sector AccountingSpecifically designed for Accounts Administrator in the public sector who realise the importance of completing a professional qualification that will equip them with the necessary skills to cope effectively with the demands of their changing environment.

2035

2

4

FassetMs Yogini Sigamoney

(011) 476 8570yogi.sigamoney@fasset.org.za

15

Diploma: Public Sector AccountingSpecifically designed for Accounting Technician in the public sector who realise the importance of completing a professional qualification that will equip them with the necessary skills to cope effectively with the demands of their changing environment.

2035

3

5

16

Chartered Accountant : AuditingThe Audit Specialism focuses specifically on Auditing, allowing registered Chartered Accountants to approve annual financial statements in Public Accounting and Auditing Practice when registered with the Public Accountants’ and Auditors’ Board.

4891

3

7South African Institute of

Chartered Accountants (SAICA)Mr Gerald Ndlovu(011) 621 6600

geraldn@saica.co.za

17

Chartered Accountant : Financial ManagementChartered Accountants function as Heads of Accounts Departments in the roles of Financial Director, Chief Financial Officer, Financial Manager and Financial Controller. Experienced Chartered Accountants have ample opportunity to move into specialist, operational and frontline positions.

4891

2

7

TITLE

NLR

D

No. NQ

FPROFESSIONAL

BODY

18

FET Certificate: Debt RecoveryThis is for any individual who is or wishes to be involved in the Debt Recovery function within the business sector and is intended to enhance the provision of service within the field of Debt Recovery within the business and commerce sector.

4902

1

4

FassetMr Aboo Amod (011) 476 8570

aboo.amod@fasset.org.za

Conclusion

The Financial and Accounting Services Sector has to ensure a sufficient

number of new entrants into the labour market, address skills shortages and

prevent skills gaps from occurring. Interventions to address skills shortages or

scarce skills have to be aimed at three levels:

a) School level

The provision of a sufficient number of new entrants into the labour market

starts at school level. Schools have to produce enough matriculants with

endorsements and with mathematics and accounting as subjects.

b) Tertiary education level

At the tertiary education level, access to the higher education system has to

be ensured and unnecessary institutional constraints have to be reduced so

as to provide a sufficiently large pool of graduates (especially in the

specialised field of accounting) who can take up professional and technical

positions in the financial services field.

c) Professional level

At a third level, it is also essential to increase the number of people in

learnerships who can obtain the professional qualifications and designations

required in the sector. Critical skills gaps are generally the result of insufficient

training prior to entry into the labour market, technological changes, and

legislative and policy changes to which the sector is exposed on an ongoing

basis. Skills gaps can occur across the whole spectrum of functions

performed in the sector and can affect all levels and categories of workers.

However, the indications are that the main areas currently requiring attention

are specialist financial skills (which cover a wide spectrum of skills needs),

computer skills (ranging from basic computer literacy to highly specialised

information technology skills) and managerial skills.

Websites of Interest

Career24: www.careers24.com

Career Information, Assessment Technologies and Services: www.careers.co.za

Centre for Higher Education Development, University of Cape Town: www.ched.uct.ac.za

E Financial Careers, UK: www.efinancialcareers.co.uk

GradX.Net: www.gradx.net

MAPP Assessment, USA: www.assessment.com

Personality 100, USA: www.personality100.com

The Princeton Review, USA: www.princetonreview.com

University of the Witwatersrand, Johannesburg: www.wits.ac.za

US Department of Labour, Bureau of Labor Statistics: www.bls.gov

Wetfeet, USA: www.wetfeet.com

Listing of Professional Bodies & Education Providers

Professional bodies are involved in education and quality assurance for

specific qualifications and professional designations, have unique entrance

requirements and offer many opportunities and services to their members.

Professional Bodies

Institution Contact Number Website AddressAssociation for the Advancement of Black Accountants in South Africa (ABASA) 011 621 6737 www.abasa.org.za

Association of Black Securities and Investment Professionals 011 325 7605 www.absip.co.za

Association of Chartered Certified 011 537 1760 www.acca.org.za

Institution Contact Number Website AddressAccountants

Chartered Institute of Management Accountants 0861 246 272 www.cimaglobal.com

Financial Planning Institute 011 475 1149 www.fpi.co.za

Financial Services Board 012 428 8000 www.fsb.co.za

Franchise Advise and Information Network (FRAIN) Project 0860 103 703 www.frain.org.za

Institute for Public Finance and Accounting 012 470 9450 www.ipfa.co.za

Institute of Certified Bookkeepers 021 421 1110 www.icb.org.za

Institute of Certified Public Accountants of South Africa 011 486 0283 www.cpa-sa.co.za

Institute of Chartered Secretaries and Administrators 011 403 2900 www.icsa.co.za

Institute of Internal Auditors 011 450 1040 www.iiasa.org.za

SASBO The Finance Union 011 467 0192 www.sasbo.org.za

South African Board for Personnel Practice 011 773 6222 www.sabpp.co.za

South African Institute of Chartered Accountants 011 621 6600 www.saica.co.za

The Institute of Marketing Management 011 628 2000 www.imm.co.za

Tertiary Education Institutions

Institution Contact No Website AddressCape Peninsula University of Technology

021 959 6121www.cput.ac.za

Central University of Technology, Free State

051 507 3911www.cut.ac.za

Durban Institute of Technology 031 308 5111 www.dit.ac.za

Mangosuthu Technikon 031 907 7111 www.mantec.ac.za

Nelson Mandela Metropolitan University, Port Elizabeth

041 504 2111www.nmmu.ac.za

North West University, Potchefstroom 018 299 1111 www.nwu.ac.za

Rhodes University 046 603 8111 www.ru.ac.za

Tswane University of Technology 012 703 2255 www.tut.ac.za

University of Cape Town 021 650 9111 www.uct.ac.za

University of Fort Hare 040 602 2011 www.ufh.ac.za

University of Johannesburg 011 406 2220 www.ujhb.ac.za

University of Kwa-Zulu Natal 031 260 2212 www.ukzn.ac.za

University of Limpopo 015 268 9111 www.ul.ac.za

Institution Contact No Website AddressUniversity of Pretoria 012 420 3111 www.up.ac.za

University of South Africa 012 429 4111 www.unisa.ac.za

University of Stellenbosch 021 808 2908 www.sun.ac.za

University of Free State 051 401 3000 www.uovs.ac.za

University of the Western Cape 021 959 2911 www.uwc.ac.za

University of the Witwatersrand 011 717 1000 www.wits.ac.za

University of Venda 015 962 8000 www.univen.ac.za

University of Zululand 035 902 6029 www.uzulu.ac.za

Vaal University of Technology 016 950 9348 www.vut.ac.za

Bibliography

Fasset, Analysis of Grant Submissions Year 4, September 2005.

Fasset, Analysis of Grant Submissions Year 5, In progress.

Fasset, Analysis of Grant Submissions Year 6, In progress.

Fasset, The Need for Strategic Learnerships in Finance, Accounting,

Management Consulting and Other Financial Services, Johannesburg,

2003.

Human Sciences Research Council, Skills Development in the Financial

and Accounting Sector, Fasset, Johannesburg, October 2002. (Fasset

Sector Study)

Fasset Sector Skills Plan 2005 to 2010, Update for the 2007/2008

Financial Year, Draft 29 August 2006