SSP Brochure:Layout 1 - INSETA

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Competition from other financial service providers – specifically the banking sector – is also likely to inhibit substantial growth.Employment growth may furthermore be inhibited by technological developments that enable organisations to handle larger volumesof work with fewer employees.Overall, the number of intermediaries (who constitute a substantial component of the sector) is expected to decline as a result of acombination of factors including direct selling by insurance companies, FAIS requirements and new commission structures.c) Replacement demandReplacement demand arises from people retiring, people leaving the sector and mortality. Estimates of retirement were based onthe age distribution of people employed in the insurance sector observed in the Survey of Employment, Scarce and Critical Skills.The age distributions of people in each of the occupational categories were used to calculate the number of people in each categorythat would retire in the next five years. It was assumed that people would retire at the age of 60.In the Survey of Employment, Scarce and Critical Skills employers reported a very low mortality rate for 2004/2005 (approximately0.26% of total employment). In 2002, just more than 1% of the South African population of working age died. Although mortalitywill probably be lower in this sector because of lower HIV infection rates and the fact that the work is not of a dangerous nature,the 0.26% per year reported by employers was considered as too low. 46 Mortality was consequently estimated at 4% over the fiveyearperiod.It was estimated that only 5% of managers would leave the sector in the five-year period. This estimate was based on anecdotalevidence obtained during the SSP development process of low attrition rates in this occupational group. It was estimated that thisfigure could be as high as 15% for professionals and for technicians and trade workers. For the rest of staff, it was estimated to be10% over the period resulting in a total of 11 015 people leaving the sector.d) Total demandGiven the negative outlook on employment growth described in Section b) above, two demand scenarios need to be considered.The first scenario is a relative negative one in which there is no employment growth and the positions that need to be filled in thesector originate only from the need to replace employees who leave the sector. In this scenario the insurance sector would have tofill 20 400 positions over a five-year period or approximately 4 000 positions per year. (See column E of Table 2-4)The second scenario allows for a 1.9% growth per year (the level of employment growth observed in the Survey of Employment,Scarce and Critical Skills in the period 2003 to 2005). In this scenario the sector would have to fill just more than 6 000 positionsper year. (See column G of Table 2-4).Table 2.4 Projections of the demand for labour in the insurance sector for the five-year period 2005 to 2010A B C D E F G(B+C+D)(E+F)Current Retirement Mortality Leaving the Total replacement New Total PositionsOccupational groupemploymentsector demand employment to fillManagers 13 520 1 300 540 680 2 510 1 330 3 840Professionals 27 580 1 710 1 100 4 140 6 950 2 720 9 670Technicians and trade workers 1 340 30 50 200 290 130 420Community and personalservice workers 30 0 0 0 0 0 0Clerical and administrative workers 41 580 1 680 1 660 4 160 7 500 4 100 11 600Sales workers 11 400 290 460 1 140 1 880 1 130 3 010Machinery operators and drivers 1 190 40 50 120 210 120 330Other 5 810 340 230 590 1 160 580 1 740Total 102 450 5 390 4 090 11 030 20 500 10 110 30 610Thus, on average, the sector would need to train between 4 000 and 6 000 new employees each year. 47It must be noted that these demand projections are limited to the larger and more formal component of the sector. It does not includeemployment creation that may occur in the micro enterprises and self-employment of individuals. As indicated in Chapter 1 thereis a need for intermediaries who can access emerging markets. Similarly, the exit of brokers who do not comply with the FAISrequirements may also create space for new brokers to come into the market and to set up new businesses. Other business andentrepreneurial opportunities are discussed in Chapter 5.46 Some participants in the SSP development workshops also commented that mortality should be higher than 0.026%.47 These employees will not necessarily be new entrants into the labour market. They may also be sourced from other components of the financial services sector or fromelsewhere in the economy.INSETA Sector Skills Plan - page 19
In this SSP update the demand model was further developed and expanded to provide for the projection of the need for Blackmanagers to comply with the FSC targets set for the Financial Services Sector. The methodology used and the findings of thisextension of the model can be seen in Annexure C.An initial analysis of industry performance against FSC targets indicate that the sector is very close to the targets set for 2008. If thesector does not grow and if the assumptions with regard to replacement demand are held the same for all managers, then the sectorwould need 365 senior managers and 405 middle and junior managers per year over the five-year period from 2005 to 2010. If therace and gender profile reflected in the WSPs submitted to the INSETA for the period 2006/2007 is to be maintained (scenario 1in Table 2.5) , the sector would need to train (or recruit) approximately 60 Black men and 60 Black women as senior managers eachyear. However, if the sector would attempt to increase the proportion of Black men in senior management positions to 20% andthat of Black women to 15% then the sector would have to train approximately 140 of each each year. If transformation were to bedriven at this pace, the attrition of white managers will have to be more that the figures provided for in the model.Table 2.5 Projections of the demand for managers in the insurance sector for the five year period 2005 to 2010Scenario 1 Distribution (%) Scenario 2 Distribution (%)Black Black WhiteBlack Black WhiteMale FemaleMale FemaleSenior management 15 10 75 20 15 65Middle to junior management 24 21 55 30 30 40Senior managementBlackMaleBlackFemaleWhite Total BlackMaleBlackFemaleNew employees 132 178 323 633 484 530 -381 633Replacement 179 119 893 1 191 238 179 774 1 191Total needed 2005 to 2010 310 297 1 216 1 823 722 709 393 1 823Total needed per year 62 59 243 365 144 142 79 365Middle to junior managementBlack Black White Total Black Black White TotalMale FemaleMale FemaleNew employees 269 197 237 702 738 900 -936 702Replacement 317 277 727 1 321 396 396 529 1 321Total needed 2005 to 2010 586 474 963 2 023 1 134 1 296 -407 2 023Total needed per year 117 95 193 405 227 25 -81 405WhiteTotal2.6 ConclusionsAt this stage evidence suggests that the demand for labour in the insurance sector is not anticipated to increase substantially over the nextfive years, and replacement demand is expected to be higher than new demand. It is estimated that the sector will need to train between4 000 and 6 000 new employees to meet employment needs. Not all these employees will be new entrants into the labour market.However, most of those in the managerial and professional categories will have to be Black in order to meet the sector’s transformationobjectives.The demand projections presented in this chapter should be seen as very conservative, because it is uses a base employment figure thatexcludes micro enterprises and self-employed individuals. In fact, micro enterprises may contribute substantially to employment growth –especially if the sector can produce enough brokers (who comply with the FAIS requirements) to access and service new and emergingmarkets.Overall, the sector is in a process of professionalisation, and higher skills levels are required in all occupational categories. The need for higherlevels of skills is specifically created by the regulatory requirements that affect all aspects of the sector.The initial transformation targets of the sector are set out in the FSC. In this chapter two scenarios have been developed regarding theneed for Black male and Black female managers in order to meet or exceed the minimum targets set in the FSC.INSETA Sector Skills Plan - page 20
Page 5 and 6: Table 4.4 Scarce skills: clerical a
Page 7: EXECUTIVE SUMMARYBackground and met
Page 10 and 11: How the INSETA addressed Scarce and
Page 12 and 13: 1 PROFILE OF THE SECTORThe insuranc
Page 14 and 15: Table 1.4 Other activities of organ
Page 16 and 17: A major problem in estimating the n
Page 18 and 19: • The fact that the industry has
Page 20 and 21: Figure 1-6 Trends in net premium in
Page 22 and 23: Figure 1-9 Trends in collective inv
Page 24 and 25: additional staff. The technology al
Page 26 and 27: 2 THE DEMAND FOR SKILLS IN THE SECT
Page 28 and 29: 2.3 Employment trends2.3.1 Changes
Page 32 and 33: 3 THE SUPPLY OF SKILLS TO THE SECTO
Page 34 and 35: Table 3.2 Population group distribu
Page 36 and 37: Figure 3-4 Senior Certificate passe
Page 38 and 39: Table 3.7 Qualifications awarded by
Page 40 and 41: 3.3.3 Further education and trainin
Page 42 and 43: Table 3.13 People to be trained in
Page 44 and 45: • The racial profile of graduates
Page 46 and 47: OccupationPosts difficult to fillSp
Page 48 and 49: Table 4.5 Scarce skills: sales occu
Page 50 and 51: The scarce skills identified in the
Page 52 and 53: Small business opportunity Subsecto
Page 54 and 55: 5.7 ConclusionsThis last chapter ou
Page 56 and 57: ANNEXURE APROFESSIONAL BODIES INTER
Page 58 and 59: Core component of BEE Indicators Ta
Page 60 and 61: Senior managementBlackMaleTOTAL MAN
Page 62 and 63: ANNEXURE ESCARCE SKILLS IN THE INSU
Page 64 and 65: OCCUPATION level ss Specialisation/
Page 66 and 67: OCCUPATION level ss Specialisation/
Page 68 and 69: ANNEXURE FCRITICAL SKILLS NEEDED IN
Page 70 and 71: OCCUPATION level ss52 Personal Assi
Page 72 and 73: ANNEXURE GINSETA BUSINESS PLANINSET
Page 74: The DoL requires all Councils to un

SSP Brochure:Layout 1 - INSETA

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