Training Benchmarks for the Financial and Accounting Services Sector January 2012
INTRODUCTION Since its inception in 2000, Fasset has been collecting and analysing information on its sector. Most of the information is collected through the various grant applications submitted by employers to the SETA. In addition to its other functions, Fasset has committed itself to the provision of benchmarks of training and development that can be used by the sector. The term benchmarking refers to the process of comparing key performance indicators for one organisation with the indicators for others that are considered to represent the industry standard or best practice for that field. A distinction is made between performance benchmarking, which provides a comparison of key performance indicators, and best practice benchmarking, which focuses on action. It explains why others are getting the results they are getting and what can be done to improve the practices of one s own organisation. 1 At this stage the information available to Fasset does not allow for the identification of best practice in the sector. It only provides for performance benchmarking i.e. quantitative indicators of what is happening in the sector and in the respective components of the sector. This information brochure includes a selection of indicators pertaining to the transformation of the sector, staff turnover, scarce skills, and the training offered in the sector. Where possible, the indicators are shown for the entire period over which Fasset has been collecting information. However, some indicators can t be given for the whole period because of changes in the grant system or because of changes in the grant application formats. In these instances only the most recent years are given. 2 At the end of the brochure a few national and international benchmarks are given. These were obtained from a study conducted annually by the American Association for Training and Development (ASTD) together with the South African Board for People Practices (SABPP) and six higher education institutions. 3 Similar studies are conducted in the United States of America (USA) and in the United Kingdom (UK). Their results are also shown where they are available. TRANSFORMATION OF THE SECTOR Employment of Black 4 People in the Sector The first measure of transformation of the sector is the total number of Black employees. In 2001 only 36% of the employees in the Financial and Accounting Services Sector (Fasset s sector) were Black. This percentage improved gradually to 56% in 2010. The subsectors that were lagging slightly behind the rest are the Accounting, Bookkeeping, Auditing and Tax Services subsector and the Business and Management Consulting Services subsector, both with 47% Black employees in 2010 (Table 1). The transformation of the sector took place mainly through the organisations that employ ten or more people. The very small organisations (with fewer than ten employees) remained mostly White (Table 2). 1 Government of Alberta, Benchmarking Best Practices, http://www.finance.alberta.ca/publications/measuring/results_oriented/module2_overview.pdf, accessed 22 December 2011. 2 Government of Alberta, Benchmarking Best Practices, http://www.finance.alberta.ca/publications/measuring/results_oriented/module2_overview.pdf, accessed 22 December 2011. 3 Government of Alberta, Benchmarking Best Practices, http://www.finance.alberta.ca/publications/measuring/results_oriented/module2_overview.pdf, accessed 22 December 2011. 4 The term Black includes African, Coloured and Indian people. Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 2
Table 1: Percentage Black employees according to subsector Investment Entities and Trusts and Company Secretary Services Stockbroking and Financial Markets Development Organisations Accounting, Bookkeeping, Auditing and Tax Services Activities Auxiliary to Financial Intermediation Business and Management Consulting Services SARS and Government Departments Percentage Black employees 35 41 42 43 44 47 51 55 57 56 38 37 39 38 41 47 57 55 54 56 58 56 64 81 69 76 73 79 77 79 35 35 32 33 35 40 41 44 44 47 48 48 55 49 51 71 72 74 75 77 47 36 40 41 42 49 50 46 53 47 64 65 65 65 67 66 67 68 70 70 Total 36 39 37 42 43 47 49 53 54 56 Table 2: Percentage Black employees according to organisation size Percentage Black employees 1 to 9 employees 33 28 28 32 31 32 32 32 32 28 10 to 19 employees 32 34 33 33 33 34 36 38 37 37 20 to 49 employees 35 33 33 37 36 39 40 39 41 39 50 to 149 employees 43 43 44 44 45 51 50 53 52 53 150+ employees 36 44 39 49 51 54 57 61 62 62 Total 36 39 37 42 43 47 49 53 54 56 The percentage Black managers in the sector increased from 16% in 2001 to 33% in 2010. In the subsector SARS and Government Departments more than half the managers were Black in 2001 and this percentage increased slightly to 59% in 2010. In the subsector Development Organisations the transformation was quite noticeable Black managers increased from 38% in 2001 to 65% in 2010. The employment of Blacks in managerial positions was much slower in some of the other subsectors. In the subsector Investment Entities and Trusts and Company Secretary Services Black managers increased from 15% in 2001 to 27% in 2010. In the subsector Stockbroking and Financial Markets the increase was from 9% in 2001 to 26% in 2010. Similarly, in the subsector Accounting, Bookkeeping, Auditing and Tax Services the increase was slow from 18% in 2001 to 29% in 2010 (Table 3). No changes in the racial profile of managers of small organisations (those that employ fewer than 50 people) could be observed over the ten-year period. In medium-sized organisations Black managers increased from 17% in 2001 to 30% in 2010. In large organisations this increase was from 17% in 2001 to 40% in 2010 (Table 4). Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 3
Table 3: Percentage Blacks employed in managerial positions according to subsector Investment Entities and Trusts and Company Secretary Services Stockbroking and Financial Markets Development Organisations Accounting, Bookkeeping, Auditing and Tax Services Activities Auxiliary to Financial Intermediation Business and Management Consulting Services SARS and Government Departments Percentage Black managers 15 17 16 16 18 20 26 28 28 27 9 12 10 13 12 14 19 23 22 26 38 40 39 70 56 56 61 58 63 65 18 17 17 17 16 22 18 20 22 29 17 12 21 21 12 15 21 21 32 44 10 15 16 16 18 19 20 21 23 25 52 56 50 50 54 52 56 56 55 59 Total 16 18 17 19 23 23 21 27 29 33 Table 4: Percentage Blacks employed in managerial positions according to organisation size Percentage Black managers 1 to 9 employees 13 10 9 14 14 14 14 13 15 13 10 to 19 employees 12 15 14 14 14 14 15 18 19 15 20 to 49 employees 17 12 13 15 16 17 16 17 19 19 50 to 149 employees 12 21 26 19 33 27 23 25 30 30 150+ employees 17 22 20 25 30 30 27 36 38 40 Total 16 18 17 19 23 23 21 27 29 33 The employment of Black professionals is a key issue in the transformation of Fasset s sector. Professionals form the pipeline from which managers are sourced and they create work for administrative support staff. The employment of Black professionals increased from 25% in 2001 to 46% in 2010. The subsectors with the highest representation of Black professionals were Development Organisations and SARS and Government Departments. The subsectors with the lowest representation of Black professionals were Business and Management Consulting Services, Stockbroking and Financial Markets, and Investment Entities and Trusts and Company Secretary Services (Table 5). From the information presented in Table 6 it is clear that the employment of Black professionals in very small firms (with fewer than ten employees) didn t increase substantially between 2001 and 2010. Transformation occurred mainly in the larger organisations. In the organisations that employ more than 150 people the employment of Black professionals increased from 26% in 2001 to 51% in 2010. Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 4
Table 5: Percentage Blacks employed in professional positions according to subsector Investment Entities and Trusts and Company Secretary Services Stockbroking and Financial Markets Development Organisations Accounting, Bookkeeping, Auditing and Tax Services Activities Auxiliary to Financial Intermediation Business and Management Consulting Services SARS and Government Departments Percentage Black professionals 16 17 23 25 25 27 32 37 38 36 20 19 20 27 29 28 31 35 37 36 60 57 54 65 69 73 65 72 70 74 27 25 22 22 25 30 28 33 38 48 25 22 43 42 25 19 32 31 38 51 23 26 22 26 33 31 36 27 39 32 58 58 58 58 61 59 64 68 76 72 Total 25 28 24 30 31 32 37 40 43 46 Table 6: Percentage Blacks employed in professional positions according to organisation size Percentage Black professionals 1 to 9 employees 17 19 16 20 19 20 22 23 27 21 10 to 19 employees 16 18 20 21 20 22 25 26 29 32 20 to 49 employees 21 22 22 31 30 27 27 26 33 32 50 to 149 employees 27 22 24 25 27 32 33 36 41 44 150+ employees 26 32 25 33 34 36 41 47 51 51 Total 25 28 24 30 31 32 37 40 43 46 The Employment of Women in the Sector Fasset s sector has traditionally employed more women than men. In 2001 55% of the total workforce in the sector was women. The only two subsectors that employed slightly more men than women are Investment Entities and Trusts and Company Secretary Services and Stockbroking and Financial Markets. The subsector with the highest percentage of women was SARS and Government Departments ( Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 5
Table 7). Small organisations tend to employ relatively more women than medium and large ones. In 2010 approximately 60% of the employees in small organisations (those that employ fewer than 50 people) were women, while 54% and 55% of the employees in medium and large organisations respectively were women (Table 8). Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 6
Table 7: Percentage women employed according to subsector Investment Entities and Trusts and Company Secretary Services Stockbroking and Financial Markets Development Organisations Accounting, Bookkeeping, Auditing and Tax Services Activities Auxiliary to Financial Intermediation Business and Management Consulting Services SARS and Government Departments Percentage female employees 50 50 57 56 51 49 48 47 47 48 49 50 49 50 51 47 43 45 46 46 47 48 55 54 47 44 46 49 50 53 54 56 52 53 55 54 55 58 58 58 59 64 68 66 69 59 64 61 63 67 49 50 54 55 55 56 55 52 56 50 62 62 62 62 62 62 62 62 61 62 Total 55 56 55 56 57 55 55 55 56 56 Table 8: Percentage women employed according to organisation size Percentage female employees 1 to 9 employees 61 62 62 63 63 61 60 60 61 60 10 to 19 employees 56 59 59 61 60 61 61 60 61 59 20 to 49 employees 54 56 55 57 57 56 58 58 58 61 50 to 149 employees 53 52 52 57 54 52 51 54 52 54 150+ employees 48 52 50 51 52 52 52 55 55 55 Total 55 56 55 56 57 55 55 55 56 56 Despite the fact that the majority of employees in the sector are women, they are still underrepresented among managers. In 2001 only 28% of the managers in the sector were women. The situation has improved over the last ten years, however. In 2010 female managers in the sector totalled 38%. The subsectors with the lowest percentage female managers were Investment Entities and Trusts and Company Secretary Services; Development Organisations; and Stockbroking and Financial Markets. The percentage women in management positions has increased in all the subsectors (Table 9). Although small organisations employ relatively more women than medium and large organisations do, female representation among managers is lower in small organisations. In 2010 only 32% of the managers in micro organisations (those that employ fewer than ten people) and only 29% of those that employ 10 to 19 people were women. In contrast, 41% of the managers in large organisations were women (Table 10). The underrepresentation of female managers in small organisations is mainly the result of fewer women than men opening their own professional practices or starting up their own small businesses. Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 7
Table 9: Percentage women employed in managerial positions according to subsector Investment Entities and Trusts and Company Secretary Services Stockbroking and Financial Markets Development Organisations Accounting, Bookkeeping, Auditing and Tax Services Activities Auxiliary to Financial Intermediation Business and Management Consulting Services SARS and Government Departments Percentage female managers 15 19 23 25 20 21 24 24 27 27 21 21 25 27 27 29 27 31 30 33 14 18 37 34 24 24 24 34 28 31 29 24 26 25 30 28 27 28 33 39 31 24 30 26 28 30 33 34 39 48 31 29 26 27 32 27 30 37 39 41 35 35 36 34 36 37 35 37 39 38 Total 28 24 26 30 29 28 29 33 35 38 Table 10: Percentage women employed in managerial positions according to organisation size Percentage female managers 1 to 9 employees 25 21 24 25 25 25 25 28 28 32 10 to 19 employees 18 18 19 23 22 25 25 25 29 29 20 to 49 employees 25 21 21 24 24 25 27 30 33 34 50 to 149 employees 27 21 27 24 21 25 26 31 33 36 150+ employees 30 29 30 37 36 31 33 37 39 41 Total 28 24 26 30 29 28 29 33 35 38 In 2001 women were still underrepresented in the professional category only 39% of all professionals working in the sector were women. By 2010 this figure had increased to 48%. The subsector with the lowest female representation among professionals was SARS and Government Departments. The Accounting, Bookkeeping, Auditing and Tax Services subsector, which is the largest subsector, increased its female professionals from 42% in 2001 to 54% in 2010 (Table 11). Small organisations tend to employ relatively more female professionals than medium and large organisations. In organisations that employ fewer than ten people, women already constituted 53% of professionals in 2001. This percentage remained the same over the period 2001 to 2010. In all the other organisation size categories the percentage women increased over the ten-year period (Table 12). Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 8
Table 11: Percentage women employed in professional positions according to subsector Percentage female professionals Investment Entities and Trusts and Company 24 28 35 35 32 37 37 39 41 40 Secretary Services Stockbroking and Financial Markets 28 28 30 30 36 36 38 41 39 40 Development Organisations 37 42 45 51 43 38 35 40 50 52 Accounting, Bookkeeping, Auditing 42 45 41 41 42 43 45 53 54 54 and Tax Services Activities Auxiliary to Financial Intermediation 42 45 41 41 42 43 45 53 54 54 Business and Management Consulting 47 40 42 42 40 39 42 48 48 49 Services SARS and Government Departments 41 41 38 43 45 47 47 38 49 36 Total 39 40 39 42 42 43 45 47 49 48 Table 12: Percentage women employed in professional positions according to organisation size Percentage female professionals 1 to 9 employees 53 53 53 53 53 53 53 53 53 52 10 to 19 employees 39 44 43 47 46 48 51 49 55 52 20 to 49 employees 33 40 41 44 43 44 46 49 52 55 50 to 149 employees 32 28 29 37 38 40 43 45 48 50 150+ employees 40 42 38 40 40 42 44 46 46 46 Total 39 40 39 42 42 43 45 47 49 48 STAFF TURNOVER The percentage of employees who left their organisations in the 2008/2009 and 2009/2010 grant scheme years can be seen in Table 13. The overall staff turnover rate for the sector was 18% and 21% respectively for these years. The subsector with the lowest staff turnover rates was SARS and Government Departments. Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 9
Table 13: Percentage of employees who left their organisations Investment Entities and Trusts and Company Secretarial Services 2008/2009 2009/2010 % of total employment % of total employment 14 19 Stockbroking and Financial Markets 17 23 Development Organisations 9 23 Accounting, Bookkeeping, Auditing and Tax Services 15 25 Activities Auxiliary to Financial Intermediation 23 *41 Business and Management Consulting Services 22 25 SARS and Government Departments 11 7 Total 18 21 *This high percentage is the result of a figure quoted by one large organisation in the subsector. SCARCE SKILLS In the 2009/2010 grant scheme year, 618 (34%) of the 1 811 organisations that successfully submitted mandatory grant applications reported skill shortages. Of these organisations 49% employed more than 150 people and in total they reported 44% of the skills needs that existed at the time. A total of 3 709 people (4%) of total employment in the levy-paying organisations was required to meet the skill shortages for the identified period. Eighty percent of the skills shortages occurred in the professionals category and the number of people needed to alleviate the shortages constituted 11% of the total number of professionals employed in the sector at the time. The specific professional occupations in which shortages were the most severe are shown in Table 14. At the top of the list are accountants and trainee accountants. Trainee accountants (learners on accounting learnerships) fulfil an important role in the delivery of accounting services. Obviously, a shortage of trainees will exacerbate the shortage of accountants in the future. Table 14: Professional occupations in which shortages were experienced OFO Code Occupation Number of people needed 221101 Accountant (General) 1 350 ** Trainee accountant/auditor 660 261302 Developer Programmer 168 221204 Internal Auditor 117 222301 Financial Investment Advisor 114 221203 External Auditor 85 263102 Network Administrator 60 221103 Taxation Accountant 54 221201 Company Secretary 35 **OFO code does not exist Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 10
STAFF TRAINING AND DEVELOPMENT Percentage of the Workforce Trained The percentage of the workforce that receives training in a particular year is one of the indicators of the extent to which the sector is committed to the development of its workers, although it doesn t provide insight into the kind of training, its duration, or its quality and impact. Table 15 shows that over the four-year period from 2006/2007 to 2009/2010 approximately three quarters of the employees in the sector received some form of training each year. In the 2009/2010 year this figure increased to 81% mainly because of the large numbers of people who were trained in the medium and large organisations ( Table 16). In the 2009/2010 year the majority of clerical and administrative workers (97%) and of professionals (90%) received training (Table 17). Table 15: Percentage of employees trained according to subsector 2006/ 2007 2007/ 2008 2008/ 2009 2009/ 2010 Percentage of employees trained Investment Entities and Trusts and Company Secretarial Services 70 78 69 67 Stockbroking and Financial Markets 78 71 74 72 Development Organisations 85 94 86 100 Accounting, Bookkeeping, Auditing and Tax Services 75 73 78 82 Activities Auxiliary to Financial Intermediation 71 55 86 84 Business and Management Consulting Services 66 75 57 69 SARS and Government Departments 68 66 88 95 Total 74 72 73 81 Table 16: Percentage of employees trained according to organisation size 2006/ 2007 2007/ 2008 2008/ 2009 2009/ 2010 Percentage of employees trained 1 to 9 employees 78 79 78 79 10 to 19 employees 71 73 75 76 20 to 49 employees 74 74 73 79 50 to 149 employees 81 77 76 84 150+ employees 72 70 72 82 Total 74 72 73 81 Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 11
Table 17: Percentage employees per occupational category who received training: 2009/2010 Occupational category Percentage of employees trained Managers 75 Professionals 90 Technicians and Trades Workers 54 Community and Personal Service Workers 36 Clerical and Administrative Workers 97 Sales Workers 72 Machinery Operators and Drivers 53 Elementary Workers 47 Total 81 Training Interventions per Employee The average number of training interventions offered per employee can be seen in Table 18 and Table 19. In the total sector each employee attended on average 2.1 training interventions. In the Accounting, Bookkeeping, Auditing and Tax Services subsector this figure was 3.7 and in SARS and Government Departments (where almost all the employees received training) the average number of training opportunities was 1.1 per employee. The average number of training opportunities offered in the small organisations (those that employ fewer than ten people) was 1.7 and in the large organisations it was 1.9. Organisations that employed between 20 and 49 people offered on average 3.0 training interventions per employee. Table 18: Average number of training interventions per employee according to subsector: 2009/2010 Investment Entities and Trusts and Company Secretarial Services Stockbroking and Financial Markets 2.7 Development Organisations 2.7 Accounting, Bookkeeping, Auditing and Tax Services 3.7 Activities Auxiliary to Financial Intermediation 2.1 Business and Management Consulting Services 1.7 SARS and Government Departments 1.1 Total 2.1 Average number of training interventions per employee 2.8 Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 12
Table 19: Average number of training interventions per employee according to organisation size: 2009/2010 Average number of training interventions per employee 1-9 employees 1.7 10-19 employees 2.9 20-49 employees 3.0 50-149 employees 2.8 150+ employees 1.9 Total 2.1 NQF Levels of Training Interventions Most of the training interventions offered in Fasset s sector are at NQF levels 4, 5 and 6. This situation remained the same from 2005/2006 to 2009/2010 (Table 20). Table 20: Percentage of training interventions according to NQF levels NQF level 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 Percentage of training interventions 1 8 1 1 2 1 2 1 1 1 2 3 3 3 5 4 3 5 4 25 16 20 24 26 5 36 33 34 24 42 6 19 30 29 25 17 7 8 13 10 18 5 8 1 0 1 0 0 Total 100 100 100 100 100 BENCHMARKS OF TRAINING INVESTMENT The ASTD State of the South African Learning and Development Report lists a number of indicators of investment in training. These figures were obtained from electronic surveys carried out each year in the UK, USA and in South Africa. The surveys are done nationally and the numbers of organisations that participated in each survey are indicated in the first row of Table 21. Although the sample sizes are relatively small, the surveys are done across all sectors of the economy and the figures provide some benchmarks that may be of interest to Fasset s sector. Unfortunately, Fasset doesn t have similar measures that can be compared with these indicators. The first indicator is the average percentage of payroll that is spent on training. In 2010 this figure was 3.11% for South Africa and in 2009 it was 3.60%. This is higher than the 2.24% reported by USA organisations in 2009. 5 A second indicator used in all three countries is the average number of hours that each employee spends on training in a year. From 2008 onwards the number of hours reported by South African organisations was higher than those for UK and USA organisations. 5 The term Black includes African, Coloured and Indian people. Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 13
Lastly, the table shows that approximately a third of organisations in the USA and in South Africa have introduced e-learning as a training method. Table 21: Key benchmarks on training investment for the UK, USA and South Africa UK USA RSA 2007 2008 2009 2007 2008 2009 2007 2008 2009 2010 Number of participating 663 729 859 221 316 301 328 335 368 472 companies Ave % payroll spent on - - - 2.33 2.15 2.24 3.43 3.13 3.60 3.11 training Ave hours of training per employee per 40 40 48 35 37 36 35 47 49 52 year % of companies using e- learning 48 - - 30 33 31 30 29 27 33 Source: ASTD Global Network South Africa in Association with the SABPP, 8th Annual ASTD State of the South African Learning and Development Industry Report, 2010. Training Benchmarks for the Financial and Accounting Services Sector (January 2012) 14