For skills-universe members, who are private Skills Development Providers (SDP)s, or private providers of Education & Training.
Costs of running a skills development business with compliance
9th Jul 2019 at 12:38 pm #71147
There are many media reports about how much SA legislation we have, and how it limits business operations and employment.
In the Concerned Providers discussion group, Lynel has posted the clarification of requirements from Minister Dr Blade Nzimande, for the requirements for registration of private skills development providers with the department.
In the Minister’s letter he mentions reports of consultancy costs being charged for registration of
R 50,000.00 to R 70, 000.00
It seems to me that one of the problems we have in SA is our poor Mathematics. It means that every charge seems to have many noughts added to it.
So my questions are:
How long does it take to put one of these applications together?
Is it the putting the application together, or is it the actual submission & dealing with the department which is time-consuming and therefore raising the costs?
9th Jul 2019 at 1:26 pm #71155Lynel FarrellKeymaster
Hi Sylvia, as an independent consultant, perhaps I am shooting myself in the foot, as the cost of compiling an application does take a lot of time, printing expenses, phone expenses, drafting of documents, re-printing of documents, travelling to DHET, continuously communicating with the provider and guidance throughout the process. For SMME providers I charge R3300.00 (per application) which includes the R500.00 that is paid to the DHET – for Corporates the charge is higher as their printing is much more – and the whole application is far more complicated than an SMME provider. Do I make money out of this – perhaps R200.00 (if that). It is not a money making journey, but to assist the SMME in the application.
How long does an application take to compile – this depends on the complexity of the provider and their structure. Some applications can take about a week, and some applications can take up to a year (it depends on the complexity of the company). Then there is also SARS problems and appeals that delay the process or re-structuring of the company (from SMME to JSE listed). Each application is unique.
I will not charge a provider that amount – I sleep at night! I am shocked that any individual or business can take providers for such large amounts – it is not right – but if the provider wants to pay such fees, then it is up to the provider. Imagine how many learners could have been given free education, if the charges weren’t that high? Then, it is clear that the DHET only charges the application fee of R500.00 which is non-refundable.
I wonder if any other consultant or business will place their fees in the public domain?
9th Jul 2019 at 7:54 pm #71159
11th Jul 2019 at 8:34 am #71176Maxine PetersParticipant
Hi Sylvia and Lynel
All I can say not an easy task to do it yourself, I tried I gave up and retried several times. So Lynel you the light in those dark tunnels when you do your information sharing without expecting those zero’s
That my experience on a D-I-Y
Thank you for a great platform to keep us all up to date!
11th Jul 2019 at 9:00 am #71179Tass SchwabParticipant
Those registration costs seem a bit too high.
The figure mentioned is however accurate for a start up Training Provider, who will use a consultant for the various steps for accreditation. And only teach ONE Qualification.
So costs are to purchase material, get a proper Qms, submit. Then add the costs of Assessors and moderators. Also premises to hire for site visits, equipment, employ ONE facilitator, have a LMS and administrator. I believe I might have left other steps out such as a psychologist to pay because this is not an easy journey for anyone who cares.
11th Jul 2019 at 1:22 pm #71189
Thanks for your responses Maxine and Tass.
Love the comment about the psychologist 🙂
On Maxine’s comments and overall, I do think it is an issue when bureaucrats in departments make incredibly complex requirements for compliance.
I recently read something on the B-BBEE requirements under the dti – and had an OMG response.
Now it makes me wonder – whether these intensely complex requirements are in fact a contravention of our Constitutional right to administrative justice – given effect under the Promotion of Administrative Justice Act (PAJA).
We did start off post 1994 to have employment law that was written in plain language. Now these issues arise from procedures created by departmental officials.
- This reply was modified 10 months, 3 weeks ago by sylvia hammond.
12th Jul 2019 at 10:10 am #71198Nigel ShipstonParticipant
Hi Sylvia and gang, unfortunately even in this field there are people who lack any realistic values when it comes to “earning” money. We’ve had the same with learning materials and accreditation “experts” whose concern is not for providers, but rather feathering their own pockets by praying on the unsure and less enlightened. Highway robbery of modern times.
Equally unfortunately is the fact that this whole Registration process was poorly implemented with a gross lack of proper communication from the authorities concerned. Even now, some 29 months after the launch of this process, thousands of providers are wondering what to do. To DIY an application by following the official Guideline will lead to a disaster. It is this lack of proper guidance from the authorities that opens the door for the unscrupulous to prey on providers. So essentially it is not a case of complex requirements, it is a case of not disseminating appropriate and correct information down to providers.
It was this very issue that had Lynel and I initiate a service to assist providers. Having carefully reviewed regulations and established exactly what DHET required, when comparing it to the Guideline document made it clear that any DIY was destined for failure.
What also needs to be taken into consideration is that the vast majority of training providers fall in the SMME category, with limited finances and resources. By charging these outlandish fees either precludes these SMME providers from accessing assistance or forces them into using resources they can ill afford.
Incredibly, while trying to address the shady elements in the training environment, this poorly executed Registration process has given the ungodly access to a new field of play.
What Lynel has outlined is appropriate. Providers need to think before falling prey to vultures. There are few who have achieved as much as we did in the early days of Registration, and equally few that were able to interact with DHET to the extent of establishing exactly what they required from providers. It was a little disconcerting that DHET would not permit us to present certain information publicly, as well over a year later their commitment to addressing the communication issues has still not come to light.
As to the comment from DHET that assistance is free of charge from officials of the department, I wonder if the author of that letter has ever tried contacting appropriate officials, whether by phone or email. I believe there are many providers who have given up trying to contact the department, either because they never get a reply or the reply is minimal and not supportive.
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