Maximising ROI from Learnerships
Maximising ROI from Learnerships: A Strategic Approach for Employers. South African employers are under increasing pressure to build talent pipelines, meet B-BBEE requirements, and extract value from training investments. Learnerships offer a powerful solution — but only when they are strategically aligned with business goals.
Our latest paper explores:
- Practical strategies to maximise ROI from learnerships.
- How to leverage tax incentives, SDL grants, and B-BBEE points.
- Best practices for learner retention and talent development.
- A South African case study showing learnerships in action.
Investing in learnerships is not just about compliance. Done right, it reduces recruitment costs, strengthens retention, and contributes to national skills development.
Read the full paper to see how your organisation can turn learnerships into a sustainable talent strategy.
Introduction
In South Africa’s high-unemployment environment, learnership programmes have emerged as a pivotal strategy for developing skills and providing workplace experience to new entrants. However, senior executives and HR managers often ask a critical question: how can we maximise return on investment (ROI) from learnerships? This report addresses that question with a focus on the South African context across all sectors. It defines what learnerships are within South Africa’s regulatory framework, examines key challenges companies face in implementing them, and outlines practical strategies to optimise their business impact. A case study of a successful South African organisation is included to illustrate best practices in leveraging learnerships for both talent development and business benefit. Throughout, the tone is professional and pragmatic, aimed at equipping HR and training managers with insights to make learnerships a win–win for both employers and learners.
Understanding Learnerships in the South African Context
A learnership is a structured work-based learning programme that combines classroom (theoretical) education with practical on-the-job experience, ultimately leading to a registered qualification on the National Qualifications Framework (NQF). In essence, a learnership is usually a 12-month training contract during which a learner gains industry-specific skills and real workplace exposure, bridging the gap between academic learning and work readiness. Several features distinguish learnerships in South Africa’s skills development landscape: they are based on a tripartite agreement between the learner, an accredited training provider, and an employer, ensuring all parties commit to a structured training plan. The learner earns a stipend during the programme and, upon successful completion, receives a nationally recognised qualification relevant to an occupation (e.g. IT technician, retail supervisor, electrician). This model allows participants to “earn-and-learn,” making them far more job-ready by the end of the programme than candidates with theoretical knowledge alone. For employers, learnerships offer a controlled way to mould talent to fit organisational needs, effectively serving as a prolonged audition or training period for potential hires.
Regulatory and Legislative Frameworks: Learnerships are a product of South African skills development legislation and policy.
Key frameworks include:
Skills Development Act (No. 97 of 1998):
This Act established an institutional framework for developing workforce skills and formally introduced learnerships as a mechanism to combine structured learning with work experience. Under the Act, learnerships must be governed by a formal contract (the learnership agreement) signed by the employer, the learner, and the training provider. Sector Education and Training Authorities (SETAs), created by this Act, oversee learnership programmes in their respective economic sectors, ensuring that programmes meet quality standards and address sector-specific skills needs. An employer must register each learnership agreement with the relevant SETA, and the learnership must lead to an occupational qualification accredited by the South African Qualifications Authority (SAQA) or QCTO (Quality Council for Trades and Occupations). In practice, this means a company cannot simply create its own unchecked internship and call it a learnership – it must adhere to the national qualification framework and SETA requirements.
Skills Development Levies Act (1999):
To finance skills training, South Africa instituted a Skills Development Levy (SDL) whereby employers above a certain payroll size (currently those with annual payroll exceeding R500,000) contribute 1% of their wage bill to a national skills fund. SETAs redistribute these funds through grants. Mandatory grants (typically 20% of the levy) can be reclaimed by employers who submit a Workplace Skills Plan and Training Report annually, while discretionary grants are available for strategic training initiatives like learnerships. In essence, companies already pay into a training fund via the SDL – by implementing learnerships, they can draw back some of that money. Many SETAs co-fund learnerships by covering training costs or learner stipends for programmes that meet sectoral priorities. By working with their Skills Development Facilitators and applying for SETA grants, employers can offset a significant portion of learnership expenses. This levy-grant system creates a financial incentive to train: if a company does not engage in training initiatives, the levy becomes a pure tax, but if it does, some of the cost is reimbursed.
Broad-Based Black Economic Empowerment (B-BBEE) Codes of Good Practice:
Learnerships are also promoted through South Africa’s B-BBEE framework, which encourages businesses to contribute to economic transformation. Skills Development is one of the priority elements on the B-BBEE scorecard, allocating a substantial 20 points (plus 5 bonus points) toward a company’s B-BBEE rating. The latest Codes set specific targets: for large companies (Generic enterprises), the target is typically to spend about 6% of payroll on training black employees and unemployed black people, and to have around 5% of the workforce enrolled in learnerships, internships, or apprenticeships in a given year. Failing to reach at least 40% of these targets can result in penalisation by dropping a BEE level, underlining the importance of skills development compliance. Conversely, companies that meet or exceed the targets gain valuable B-BBEE points, improving their empowerment status and procurement recognition. Notably, the B-BBEE Codes also offer bonus points for learner absorption – up to 5 extra points if the company permanently employs a high percentage of learners after completion of the programme. This integration of learnerships into the B-BBEE framework means that investing in training not only builds skills but also directly benefits a company’s competitive positioning in South Africa’s regulated business environment. Many firms therefore view learnerships as a strategic way to “do well by doing good”: they improve their B-BBEE scorecard by offering training opportunities to disadvantaged groups, while simultaneously developing talent that could strengthen the business.
Income Tax Act – Learnership Tax Incentives:
To further encourage workplace training, the government provides tax rebates for registered learnerships. Section 12H of the Income Tax Act offers employers a tax deduction for each learner enrolled on a formal learnership and an additional deduction when the learner successfully completes the programme. As of recent amendments, the allowance is approximately R40,000 off taxable income per learner for each year of a learnership, plus R40,000 upon completion (for NQF level 1–6 qualifications). Higher NQF level learnerships (e.g. graduate-level programmes) have a slightly lower allowance (around R20,000 + R20,000). The incentive doubles for learners with disabilities – roughly R60,000 per year and another R60,000 on completion. In practical terms, if a company hosts 10 learners who each complete a one-year learnership, the company could deduct up to R800,000 from its taxable income for that year (10 learners × R40k + R40k). These Section 12H allowances significantly reduce the net cost of training. Employers effectively receive a partial subsidy via lower tax, making the economics of learnerships more attractive. According to one consulting firm’s summary, businesses are eligible for a tax rebate of approximately R80,000 per learner (and R120,000 for a disabled learner) over the duration of the programme. This kind of relief, combined with SDL grants, means that a well-managed learnership can draw on multiple public funding streams.
Current Uptake and Importance:
Learnerships have become a cornerstone of South Africa’s skills pipeline. Recent data from the Department of Higher Education and Training (DHET) shows that in the 2023/24 financial year, over 79,000 learners were registered in learnership programmes nationwide (making up 53% of all SETA-supported training enrolments). This represented a significant 30% growth in learnership uptake compared to the previous year. Thousands of learners also graduate from learnerships annually – in 2023/24, nearly 23,826 learners completed their learnership qualifications. The majority of these opportunities are geared towards unemployed youth, reflecting national efforts to tackle the “no experience, no job” Catch-22 that young people face. For employers, this means a large and growing pool of learners is available across sectors, often with government support. Yet simply participating in a learnership programme does not guarantee a return on investment – how employers implement and leverage these programmes determines whether they reap business benefits or just incur costs for compliance. In the next sections, we explore the challenges that can undermine learnership ROI and then propose strategies to maximise the value gained.
Key Challenges in Implementing Learnerships
While learnerships offer clear advantages on paper, South African employers often encounter practical challenges when trying to implement these programmes.
Understanding these pain points is the first step to addressing them. Key challenges include:
Administrative and Compliance Burden:
Running a learnership involves navigating bureaucratic processes with SETAs and other bodies. Companies must submit detailed training plans, sign tripartite contracts, and ensure programmes are accredited – all of which can be time-consuming. Many employers report frustration with SETA administration, citing slow online systems, delayed responses, and tight or “unrealistic” reporting deadlines for grant submissions. Managing the paperwork (e.g. registering each learnership agreement and later submitting results for certification) requires dedicated effort, often through a Skills Development Facilitator (SDF). Smaller companies or those new to learnerships may find these regulatory hoops daunting, leading some to forgo the available grants or incentives simply because the process is perceived as too complex. Additionally, compliance with B-BBEE training criteria and the need to gather evidence for scorecard audits (such as learner IDs, attendance records, proof of qualifications, etc.) add further administrative overhead. This burden can deter businesses from fully embracing learnerships, especially if they lack internal HR capacity or prior experience with the system.
Finding and Retaining Quality Learners:
Identifying suitable candidates for learnerships can be challenging. By design, many learnerships target unemployed youth (often with limited work experience and varying educational backgrounds). Employers may have to sift through large numbers of applications to find individuals who have the right aptitude and attitude to succeed in both classroom and workplace components. Furthermore, learner commitment can be an issue – some participants drop out due to personal challenges, while others may treat the learnership purely as a short-term income opportunity. A striking challenge noted by one expert is that poverty and desperation can drive some individuals to abuse the system, for example by forging disability status (with fake doctor’s notes) to qualify for stipends meant for people with disabilities. Others may even attempt to register for multiple learnerships simultaneously to collect more than one stipend. Such cases not only undermine the intent of the programmes but also create headaches for employers who must validate applicants’ status and ensure each learner is eligible and genuine. Once enrolled, maintaining learner motivation and performance is another hurdle. Without proper support, learners might struggle to balance work and study commitments or fail assessments, leading to non-completion. High attrition or low completion rates directly erode ROI, as the company does not fully realise the benefit of training someone who leaves early or fails to qualify.
Workplace Integration and Mentorship:
Learnerships require that learners be placed in real job roles to gain practical experience, which means employees and line managers need to allocate time for supervision and coaching. Some organisations find it challenging to integrate learners into their operations – busy teams might see learners as an extra burden. Effective mentorship is crucial for success, but not all mentors have the training or inclination to guide inexperienced juniors. If a company’s staff are not fully bought-in, learners might be given menial tasks (or left idle) instead of meaningful work experience, reducing the quality of training and the learner’s contribution. There can also be a productivity trade-off: in the short term, having trainees can slow down a team’s output as they learn on the job. This can lead to resistance from managers if they are only measured on immediate performance. Ensuring that knowledge transfer actually happens – and that learners are not just physically present without growth – requires deliberate effort. Companies that treat learnerships as a mere compliance exercise (“tick-box” training to score BEE points) without integrating learners properly miss out on the real ROI of improved skills and potential future employees.
Costs and Resource Constraints:
While there are incentives to offset costs, employers still bear expenses for learnerships – including learner stipends, training provider fees, materials, and the indirect cost of staff time for training and administration. For small businesses especially, paying stipends for 12 months and possibly hiring someone to manage the programme can strain budgets. There may be a cash flow gap where companies pay costs upfront and only later receive SETA grants or tax refunds. If not carefully budgeted, this can make learnerships seem “too expensive.” Additionally, some employers worry about the risk of investing in training only to have no positions available for the learner later. Unlike regular employees, learners are on fixed-term contracts; at programme end, the company might feel the investment is wasted if the person leaves. This ties into the next challenge: retention and absorption.
Post-Learnership Placement and Retention:
A major concern for many employers is what happens after the learnership ends. Ideally, the company would absorb (hire permanently) the learners who have performed well, thus reaping the benefits of their training. In reality, absorption is not always possible – there may not be vacant positions or headcount approval, especially in tight economic times. If learners are not retained, the employer’s ROI is largely indirect (contributing to the broader skills pool) rather than directly adding to their workforce. Moreover, even when companies do hire learners, there’s no guarantee the individual will stay long-term. Some may leverage the qualification and experience to secure employment elsewhere if the current employer cannot offer a suitable role or competitive salary. The risk of trained talent attrition can make some firms hesitant to invest heavily in training outsiders. However, it’s worth noting that studies and practitioner observations often find better retention among those hired from a learnership pool compared to external recruits – since these individuals have already integrated into the company culture and have “earned” their spot, they tend to stay longer out of loyalty or commitment. Nonetheless, without careful career path planning, employers might lose graduates to competitors, thereby “training for the market.” This possibility can undermine the perceived ROI for the original employer if not managed by providing advancement opportunities or incentives for graduates to remain.
Managing Quality and Expectations:
Ensuring the quality of both the training provider’s classroom component and the workplace experience is a challenge that affects outcomes. Some employers have been disappointed by poor training delivery – for instance, curricula that are outdated or not aligned with the company’s actual skill needs. If learners emerge from the programme without the competencies expected, the ROI in terms of productivity gains will be low. There’s also the challenge of meeting multiple stakeholders’ expectations: government expects businesses to contribute to national skills development and transformation goals; learners expect to gain real skills and possibly a job; employers expect an increase in capability or B-BBEE points, or both. Balancing these expectations requires clear objectives and diligent management of the learnership programme. Companies that do not set clear success criteria (e.g. percentage of learners to be retained, performance benchmarks, etc.) may find it hard to measure whether the programme “worked,” feeding into the perception that ROI is uncertain. Additionally, lack of strategic alignment can be a hidden challenge – if learnerships are run in isolation, disconnected from the company’s talent strategy, they may produce qualified individuals that the business has no intention to utilise. This often happens when learnerships are executed purely to claim points or rebates, rather than to fill identified skills gaps. As Beth Cook, CEO of a disability inclusion firm, notes, learnerships “should never be an afterthought, and should always be included as part of a comprehensive strategy from the beginning”. When corporates treat learnerships as an add-on, they are less likely to achieve a successful outcome for either the learner or the business.
Despite these challenges, many South African organisations have found ways to make learnerships highly effective. The next section looks at strategies employers can use to overcome these hurdles and maximise the return on their learnership investments.
Strategies for Maximising ROI from Learnerships
To unlock the full business value of learnerships, companies should approach them not just as a compliance requirement but as a strategic talent and skills development initiative.
Below are practical strategies for employers to maximise ROI from learnership programmes:
Integrate Learnerships into Talent Pipeline Development:
Rather than running learnerships as stand-alone training events, successful organisations use them to build a pipeline of skilled talent for their business. This means selecting learnership fields that align with roles the company needs (or will need in future) – for example, a bank might offer learnerships in banking services or IT support, creating a feeder group for entry-level vacancies. By the end of the programme, the learners have company-specific experience and proven capabilities, making them prime candidates for permanent roles. Hiring from this internal pipeline can significantly reduce recruitment costs and time-to-fill for junior positions. Managers have already observed the learners on the job for months, so they make informed hiring decisions, choosing those who fit the culture and have demonstrated aptitude. This “grow-your-own” hiring approach often leads to better performance and loyalty. In fact, employees who come through learnerships tend to stay longer than external hires, as they feel a sense of loyalty and have had time to integrate into the company. To capitalise on this, treat learners as potential long-term employees: rotate them through departments to broaden their skills, involve them in real projects, and evaluate them rigorously. Even if you cannot absorb everyone, those you do hire will be virtually ready to work from day one, saving on onboarding and training costs. One study of stakeholder perceptions noted that after a 12-month learnership, a new hire already understands the company’s systems and culture, which “simplifies onboarding and training” and avoids the usual ramp-up time for fresh recruits. In the same vein, some organisations use learnership graduates as a talent pool for multiple roles – for instance, grooming them not only for current openings but for future supervisory or technical specialist positions. By viewing learnerships as an extended audition, companies can fill hard-to-find skills internally and ensure continuity in their workforce.
Leverage Tax Incentives and Financial Rebates:
South Africa’s incentive structure means that a portion of learnership costs can be recouped if companies take advantage of the available schemes. A foremost strategy is to fully utilise the Section 12H learnership tax allowance. Ensure that every learnership is properly registered so that your organisation can claim the annual and completion tax deductions. For example, for a one-year learnership at NQF level 5, the company can deduct around R40,000 during the training and another R40,000 upon the learner’s completion, effectively lowering taxable income by R80,000 per learner. If the company’s corporate tax rate is 27%, that equates to roughly R21,600 saved in tax per learner – a substantial rebate. If you host learners with disabilities, the allowance is higher (about R120,000 total per learner), reflecting government’s encouragement of including people with disabilities in skills programmes. To maximise this, keep thorough records of learnership agreements and completion certificates, as these will be needed for tax filing. In addition to tax breaks, claim your Skills Development Levy grants. Submit your Workplace Skills Plan and Annual Training Report on time to earn the mandatory grant (typically 20% of your levy contribution back). More importantly, apply for discretionary grants that many SETAs offer for learnerships – these can fund either a portion of the training provider’s fees or even reimburse stipends in some cases. Although the application process can be competitive, companies that align their learnerships with scarce skills in their sector or with government youth initiatives often secure co-funding. Essentially, treat the SETA as a partner: engage with them about your skills needs and see if there are funding windows open (for example, some SETAs periodically request companies to participate in special youth training projects, which come with funding). The Youth Employment Service (YES) is another related initiative – while not a learnership per se, YES can complement learnership ROI by providing B-BBEE benefits for creating youth jobs. Some firms enrol YES youth in accredited learnerships, blending the two programmes for maximum impact on both BEE scoring and tax incentives. Lastly, explore the Employment Tax Incentive (ETI) if you are hiring learners as employees. The ETI is a separate incentive that can reduce PAYE tax for employers when they hire young people (18–29 years) below a certain salary. BUSA (Business Unity South Africa) noted that the ETI helped support over 645,000 young people in its first year of implementation. If your learners qualify (age and salary-wise), you could receive a further rebate on their wages during the learnership period. In summary, a smart ROI strategy is to stack incentives: combine tax deductions, levy grants, and wage incentives to substantially lower the net cost of learnership programmes.
Optimise Use of the Skills Development Levy (SDL):
Since companies have to pay the SDL by law, the goal should be to get a return on that mandatory investment. One way is through the grants as discussed, but another angle is to ensure your spend on training actually earns back B-BBEE points which can translate into business opportunities. For instance, if a company spends the equivalent of 6% of its payroll on training (the target for large firms) and enrols at least 5% of its employees or prospective employees in learnerships, it can secure the full 20 points on the Skills Development element of B-BBEE. Achieving these points can contribute to moving up a BEE level (or maintaining one), which, for many businesses, has direct ROI in terms of qualifying for contracts or procurement. Think of it this way: you are already paying 1% of payroll into the SDL; by effectively using that money on learnerships and training, you improve your BEE scorecard, potentially unlocking new revenue streams (e.g. clients who require a certain BEE level). Additionally, some SETAs require that 80% of discretionary grant funds be spent on PIVOTAL programmes (Professional, Vocational, Technical and Academic Learning) such as learnerships. By proposing learnerships in your annual plan, you position your company to tap into these funds, which essentially means reclaiming your SDL in service of your own talent needs. In a very practical sense, successful learnership implementation can turn what would have been a pure tax (SDL) into a co-funded training budget for the company. This is a financial ROI that often goes underappreciated.
Focus on Improved Retention and Career Development:
To ensure that learnership investments translate into long-term value, employers should implement strategies to retain top learners after the programme and support their career growth. Retention starts with selection – choose learners not only for their ability to complete the programme, but also for their fit with the company’s values and potential to fill future roles. During the learnership, treat participants as part of the team: include them in company events, communicate career paths, and pair them with mentors. Many companies have found that mentorship and a positive company culture significantly influence whether learners aspire to stay on. Upon completion, have a clear process to absorb at least a percentage of the graduates. Some organisations set targets (e.g. “we aim to employ at least 60% of each learnership cohort permanently”) to drive internal efforts in creating positions for successful learners. Those who cannot be hired immediately might be kept in a talent pool or considered for temporary positions until a permanent opening becomes available. The business case for doing this is solid: staff hired from learnership ranks have already proven themselves and often show greater loyalty. One retail company observed that employees who came through its youth development programmes stayed longer and progressed faster than those recruited externally, improving overall retention and reducing turnover costs. To further boost retention, some firms implement bonding or incentive schemes – for example, offering a bonus or accelerated progression if a learner stays with the company for a year or two post-learnership. However, even without formal bonds (which can discourage candidates), simply demonstrating a commitment to the learner’s growth can inspire loyalty. It’s also important to track and celebrate the success of former learners: when other employees see learners rising through the ranks, it reinforces a culture of development and can motivate new learners to build a career with the company. In essence, converting learners into productive, long-term employees is the ultimate ROI – it means the training has paid off in skilled manpower. A side benefit is that high retention of ex-learners can turn into a self-reinforcing pipeline: as they advance, you can backfill their entry-level roles with new learners, creating a cycle of continuous talent renewal.
Align Learnerships with Business Strategy and B-BBEE Goals:
Maximising ROI requires that learnership programmes serve both the immediate talent needs of the business and its broader strategic goals. This starts with executive buy-in: senior leadership should view learnerships not just as a CSR initiative or compliance task, but as a strategic investment in human capital. By explicitly including learnerships in the company’s HR strategy and B-BBEE strategy, you ensure resources and attention are allocated appropriately. Aligning with B-BBEE is particularly important in South Africa – as mentioned, getting those 20+5 points can be a game-changer for your empowerment rating. Companies should therefore plan learnerships in conjunction with their BEE consultants or verification needs, ensuring they target the right demographic groups and that documentation is in order. But beyond the scorecard, consider how learnerships can advance your company’s mission or values. For example, if innovation is key, perhaps focus on IT or digital learnerships; if local community goodwill is important, recruit learners from communities where you operate (which also contributes to socio-economic development). One best practice is treating learnerships as part of succession planning. Aiming to cultivate future supervisors or technicians from the ranks of learners can address long-term skills gaps caused by retirements or turnover. Another strategy is to partner with other companies or industry bodies in collaborative learnership projects. For instance, in the Business Process Outsourcing (BPO) sector, a collaborative project in the Western Cape saw industry players and government jointly support learnerships to create a talent pool for call centres. This kind of partnership can spread costs and create a steady supply of skilled labour for the whole sector, benefiting each participating firm. Finally, aligning with national initiatives (such as the National Development Plan or specific sector skills plans) can also yield reputational and networking benefits. Companies known for investing in youth skills development often enjoy stronger brand loyalty and stakeholder trust. Internally, employees take pride in working for an organisation that contributes to social solutions, which can boost morale. In summary, making learnerships an integral part of business planning – rather than a side project – ensures they receive the support needed to deliver real returns, both quantitative (financial and performance gains) and qualitative (brand and culture enhancements).
Measure and Communicate Outcomes:
It’s often said that “you can’t manage what you don’t measure.” Implement a way to track the ROI of your learnership programmes. This could include metrics like: percentage of learners absorbed into the company, productivity or performance of ex-learners versus other staff, reductions in recruitment cost/time due to the pipeline, tax savings obtained, and B-BBEE points achieved. For example, calculate how much in tax rebates and grants you claimed in a year relative to what you spent on the programme – this will give a direct financial ROI figure. Also track softer outcomes such as improvements in customer service or reduction in error rates in departments where learners were placed (these benefits can be attributed to fresh skills or extra hands on deck). Communicating these outcomes to senior management will help secure ongoing support. Moreover, celebrate successes publicly: if your learners develop an innovative solution or your company hits a milestone (like 100 learners trained, 80 employed), include that in annual reports or staff newsletters. This not only enhances the employer brand but solidifies the business case for learnerships by showing tangible results. Research has found that when stakeholders see clear individual, organisational, and community benefits from learnerships, they are more likely to invest in and support such programmes. Thus, make the impact visible – turn data and success stories into narratives that reinforce why learnerships are a smart investment, not just a compliance duty.
By applying these strategies – from tapping into financial incentives to fostering internal pipelines and aligning with company strategy – employers can significantly boost the returns from learnership initiatives. These practices are not theoretical; many leading South African companies are already exemplifying them, as the following case study illustrates.
Case Study: The Foschini Group – Leveraging Learnerships for Talent and Business Growth
Background:
The Foschini Group (TFG) is one of South Africa’s largest retail companies, encompassing numerous brands in fashion, homeware and sports. With a footprint of hundreds of stores and a diverse workforce, TFG faces the ongoing challenge of recruiting and upskilling talent in the retail sector. In response, the company has made youth learnerships and related training programmes a core part of its talent strategy, aligning these efforts with both its business objectives and South Africa’s national skills agenda.
Learnership Programme Implementation:
Each year, TFG offers 12-month learnerships to dozens of unemployed youth, focusing on high-need areas of the business. These include learnerships in Retail Operations (for store assistants and supervisors), Merchandising, Manufacturing (for their clothing factories), and Call Centre Support. Learners are recruited largely from disadvantaged backgrounds in line with TFG’s transformation commitment. Once on board, learners are placed across TFG’s operations – on the shop floor in various stores, in distribution centres handling stock and logistics, in manufacturing units, and in customer service centres. This wide placement ensures they gain practical experience relevant to a retail enterprise. TFG works closely with the Wholesale and Retail SETA (W&R SETA) to ensure that the programmes are accredited and meet industry standards. Importantly, TFG doesn’t view these learnerships as mere traineeships; they are treated as a strategic pipeline for filling entry-level and even future leadership roles. Many of TFG’s store managers and head office staff started out as learnership trainees, testament to the programme’s success in developing talent internally.
Supporting Success Factors:
A few key practices underpin TFG’s strong ROI from learnerships:
Work-Readiness and Quality Training:
TFG invests in additional work-readiness preparation for its learners. For example, it provides digital learning content to support their development – at one point even giving out smartphones pre-loaded with learning materials to participants in the Youth Employment Service (YES) programme, which complements their learnership initiative. The curriculum is not treated as a box-ticking exercise; TFG ensures that the theoretical components (delivered in classrooms or online) are reinforced by practical assignments in stores or departments. They also emphasise soft skills like customer service, teamwork, and sales techniques specific to their retail context.
Mentorship and Supervision:
Each learner or intern is paired with a mentor or buddy – typically an experienced employee or line manager – who guides them day-to-day. This mentorship approach helps learners assimilate the company’s customer-centric culture and gives them a support system to navigate challenges. Managers are trained to provide feedback and assess learners’ progress, which keeps the programme focused on skill acquisition and performance. The presence of a dedicated mentor also means learners are more likely to add real value during their placement, as someone is assigning them tasks and gradually increasing their responsibilities.
Strategic Alignment (Not Just Compliance):
TFG’s top leadership views learnerships as strategic talent development, not merely a compliance requirement for B-BBEE. While they certainly reap the compliance benefits (TFG consistently earns full points on the Skills Development element of the B-BBEE scorecard), the ethos is that these programmes should genuinely build capability for the business. This outlook drives them to offer meaningful experiences rather than “tick-box” training. It also means the initiative has adequate resourcing and integration. For instance, TFG’s HR department and business unit leaders collaborate on identifying where learners could be placed to address staffing needs, ensuring that when learners qualify, there are opportunities for the best candidates to step into roles. TFG also aligns its efforts with national policy – echoing the National Development Plan’s call for reducing youth unemployment – which enhances the social impact of their programmes and garners positive public relations
Outcomes and ROI:
The results of TFG’s approach have been impressive for both the company and the learners:
- TFG enjoys a steady influx of young, capable employees across various divisions. By the end of each year, they have a cohort of trained individuals familiar with the company’s systems. Many of these individuals are absorbed into permanent positions. For example, a significant number of TFG’s store-based roles (from sales associates up to store managers) have been filled by former learners who proved themselves during the programme. This internal pipeline reduces TFG’s recruitment costs – they spend less on external hiring and recruitment agencies for entry-level roles because they can promote from within or hire graduates of their own programme. It also shortens the onboarding time; a learner who transitions to a permanent job can typically reach full productivity faster than a brand-new hire, since they’ve essentially been doing the job under supervision already.
- The retention rate of absorbed learners is high. These employees often demonstrate strong loyalty; having been given a start by TFG, they tend to stay and build their careers. This improves TFG’s overall staff retention and lowers turnover-related costs (such as training new hires or lost productivity). Moreover, because learners have been inculcated with TFG’s customer service ethos and processes from the ground up, they often perform better in service roles than external hires, leading to better customer satisfaction and possibly higher sales.
- TFG meets and exceeds its Skills Development targets for B-BBEE annually. By investing in learnerships and related youth development programmes, TFG secures the full 20 points on the Skills Development scorecard and regularly earns the 5 bonus points for absorbing learners into employment. This contributes to TFG maintaining a competitive B-BBEE Level (crucial for partnerships and operating in South Africa’s economy). Essentially, the company has found a way to merge compliance with genuine capacity building – a model outcome for B-BBEE strategy. The bonus points in particular are a direct ROI for offering permanent jobs to learners, encouraging the company to hire wherever feasible.
- The initiative bolsters TFG’s brand and corporate social responsibility profile. TFG publicly highlights its learnership and internship successes in sustainability reports and press releases, which enhances its reputation as an employer of choice and a socially responsible corporate citizen. Communities and customers see TFG as a company that actively combats youth unemployment and empowers individuals with skills. This reputational capital, while hard to quantify, can translate into better stakeholder relations and even customer loyalty. Within the organisation, it also boosts staff morale: employees take pride in mentoring learners and in their company’s role in “giving back” by creating opportunities. TFG’s example shows that when done right, learnerships create a virtuous cycle – the company gains skilled staff and BEE credits, the learners gain qualifications and jobs, and society gains more employed, skilled citizens.
In summary, The Foschini Group’s successful leverage of learnerships demonstrates that maximising ROI is achievable when programmes are well-integrated into business operations and coupled with genuine development support. TFG has turned learnerships into a strategic asset – addressing its talent needs, improving its B-BBEE score, and contributing to socio-economic development, all at once. This case underlines several of the strategies discussed earlier: treat learnerships as investments in future employees, provide mentorship, utilise incentives (TFG benefits from grants via W&RSETA and tax deductions for their learners), and align the programme with broader business goals. Other organisations, whether in retail, finance, IT, manufacturing or services, can take cues from this approach to similarly maximise the returns on their learnership initiatives.
Conclusion
For South African employers, learnerships represent more than just a compliance exercise or a charitable endeavour – they are an opportunity to develop the skills your business needs, tap into financial incentives, and contribute to the broader transformation of the workforce. By understanding the regulatory framework and aligning learnership programmes with both talent development goals and B-BBEE imperatives, companies can turn what might seem like a cost into a high-yield investment. The key is to proactively address the challenges: streamline administration by partnering with SETAs or third-party facilitators, carefully select and support learners to ensure successful completion, and plan from the outset how those learners can be absorbed or utilised post-training.
Maximising ROI from learnerships involves a holistic approach – leveraging tax rebates and grants, integrating learners into workforce plans, and fostering an environment where developing junior talent is part of the corporate culture. As illustrated by TFG’s case, when done right, learnerships can furnish a steady pipeline of capable, loyal employees and reduce costs associated with hiring and training, all while boosting the company’s B-BBEE score and reputation. In quantifiable terms, the returns include lower recruitment expenditures, tax savings, and grant funding received; in qualitative terms, they include improved service delivery, innovation from fresh perspectives, and enhanced employee engagement and public image.
In a country where skills are in short supply and unemployment is high, the business case for learnerships is closely tied to a social case – investing in learnerships enables companies to do well by doing good. HR and training managers, together with senior executives, should treat these programmes as strategic initiatives with clear objectives and KPIs, just like any other major investment. By setting those objectives (e.g. retention rates, productivity improvements, point gains) and measuring outcomes, organisations can continuously refine their approach to maximise impact. Ultimately, the most successful employers in South Africa will be those who not only ask “What is our ROI on training?” but also realise “Our talent pipeline is our ROI.” Learnerships, when effectively implemented, create a self-sustaining cycle of skills development that pays dividends in organisational performance, compliance success, and social capital. In the long run, this strengthens both the enterprise and the broader economy – a true return on investment that extends beyond the balance sheet into the future of the country’s workforce.
Sources: The information and best practices in this report are drawn from South Africa’s legislative documents and authoritative guidelines, as well as industry analyses and case studies. Key references include the Skills Development Act and B-BBEE Codes outlining learnership frameworks, insights from SETAs and DHET on learnership participation and outcomes, expert commentary on implementation challenges, and documented success stories from businesses like TFG that have leveraged learnerships for growth. These sources underscore the conclusion that with strategic management, learnerships can yield significant ROI for employers while contributing to South Africa’s skills development goals.
