IT group takes the lead with upskilling initiative

Last week EOH, a JSE-listed technology company, released half-year results. Investors have come to expect good earnings numbers from the dynamic IT group, and they were not disappointed. Headline earnings per share were up 35% on a 46% increase in revenue. Over the past four years, profits have grown threefold, making EOH one of the hottest shares on the stock market.

It's not only the company's highly successful business model that deserves praise, but also CEO Asher Bohbot's distinctive job creation initiatives, introduced to play a role in helping normalise society through positive intervention of programmes designed to redress imbalances in our society that, according to the company, were created by discriminatory practices in the past.

In a radio interview with Moneyweb's Hilton Tarrant, Bohbot said EOH created the project to put technikon graduates and school leavers through a one-year internship. Last year they trained 620 young people, 400 of whom were offered permanent positions within the group. Students who did not make the cut would be retrained or placed with customers and vendors. It's an ongoing project between the company, its customers, business partners and government aimed at upskilling young people and finding them employment, enabling them to become responsible and contributing members of society.

Israeli-born and educated Bohbot - who came to South Africa in 1980 on a temporary assignment and never returned - acknowledges that it is not the government's duty to create jobs. There are eight million people in South Africa who have never seen a pay slip, he concedes, believing business has the capacity and resources to reduce the high levels of unemployment. EOH's endeavours are a huge success and Bohbot is urging other businesses to follow his lead and help cut joblessness among youth.

Bohbot is not alone in his gallant efforts to build a better South Africa. Most large domestic corporations set aside millions annually to help build schools, clinics, sports fields and community centres. But where Bohbot deserves acclaim is that his approach provides trainees with expertise in a vital and vibrant industry that will not only enhance the prosperity of EOH, but will allow his graduates to compete in the global workplace for employment opportunities.

Bohbot is following a path commended by a number of reform-minded educationalists who believe that to preserve an economy's competitiveness, schools, universities and technical colleges should be revamped to serve local businesses and offer students more practical qualifications. This begins with overhauling schools - introducing new curricula, restructuring teachers' pay, lifting student and teaching standards, and ensuring the disadvantaged are not forgotten. Even the most dedicated teachers cannot prepare children adequately for adult life toiling in overcrowded schools using outdated technology and short of textbooks.

Despite South Africa's unacceptably high unemployment rates, industry still complains of a scarcity of critical skills. To overcome the shortfall, campaigners agree government should align its spending with the needs of industry, allocating its money to institutions whose graduates stand a good chance of finding work. Furthermore, government should fund technical colleges and universities to nurture talents that would be required to advance future growth.

All these proposals and discussions, however, are designed to wire the younger generations for opportunities down the road, but spare a thought for the masses of underskilled school leavers and the thousands of adult bread-winners retrenched from mines and factories, the upshot of a slowdown in the global economy.

At this juncture no viable solution exists to help the strugglers other than an ongoing government handouts. Even these cannot continue indefinitely without diverting spending away from critical development plans. This has not gone unnoticed by the international investing community. Last week, rating agency Standard & Poor's reaffirmed its negative outlook on South African debt, citing social challenges and political pressures to redress these as reasons.

Of course, we could work smarter to help lift revenue. When Bidvest released results recently, venerated CEO Brian Joffe observed that South Africa should be doing better - an obvious reference to tensions between business and government, the absence of a coherent industrial policy, hostile and destructive strike action and workers' belligerent demands for higher wages without assurances of an increase in productivity.

Bohbot is optimistic that, with a little effort from business, we can promise our youth a fertile future that, up to now, has eluded them.

He's right. But we need govern ment to do its bit as well, not only by reforming the way it educates and trains children but also the way it engages with labour, deals with wrongdoers, connects with foreign investors and applies economic policy.