EDUPOWER SKILLS ACADEMY: EduPower Bets on BPO to Close Skills Gap

In South Africa, the official unemployment rate for the second quarter of 2022 sat at 37%. The situation was worse for women where stats suggest 47% of women are economically inactive – almost half of all women of working age in the country. For those that can find a way into the labour market, prospects are bleak. Many face inadequate earnings, low productivity, and difficult work conditions.

The government’s multi billion Rand budget for education and training for the year is important but leaves much room for improvement. Business and the private sector is where much of the progress is happening. Corporates invest heavily – both for their own long-term security but also to leave a positive mark on the communities in which they operate.

But it’s not always easy to achieve results when your core business is far from education and upskilling – especially when faced with legislative scorecard pressure from the government.

Thankfully, there are institutions that understand the local market, and have a deep knowledge of what is required to succeed in South Africa. When these organisations put their skills and experience where it is needed, great things happen, and new doors are opened.

The EduPower Skills Academy was borne out of the need to create employability in South Africa and to do so in two of the most important channels – this being BPO/Contact Centre industry and in informal sector entrepreneurship. The BPO sector is recognised as one of the few growing market sectors in South Africa with the rapid growth in International offshoring to the country. The entrepreneurial channel being a key job creator in the informal sector.

“In the beginning, it was just Daly Credit Corporation and RL Daly Attorneys Incorporated. I joined eight years ago, and we have since expanded in different directions with EduPower being the most notable,” explains Group CEO, Steve McNabb.

TRANSFORMATION OPPORTUNITY

Working for the country’s big banks, retailers, and other corporates, the Daly Group was required to meet transformation targets and realised that there was a gap in the market for a focused player with transparency and clarity.

“We saw an opportunity to become a player in the BPO industry, and with BPO being such a large contributor to our economy there was an opportunity to take large cost centres and turn them into large profit centres. We wanted to take our IT department and our legal department and shift them into their own entities so that they could serve external clients. It was about diversifying and creating more revenue streams to spread risk across the group,” says McNabb.

A chartered management accountant, previously working for Unilever and other big-name corporates, McNabb was able to see the opportunity around internalising spend while attracting existing corporate clients to understand the benefits provided by EduPower.

“We have always had a very focussed skills development agenda and we understand the process. Government gives you some assistance through grant funding, and we would previously use that for an external training provider.

“We hired Rajan Naidoo – the MD of EduPower – and he came with Sector Education and Training Authority (SETA) experience, understanding how to run these programmes,” McNabb details. “He came to me one day with the idea that we should create a new business – an academy that can provide accredited skills that we currently use our annual grant with third parties for.”

Management loved the idea and acted quickly, bringing in quality trainers and partnering with reputable external instructors. Initially, EduPower served internally only, training Daly Credit Corporation staff.

“Consultants in the transformation space then came to us and said they liked our model, and said it could fit some corporates – big, listed multinationals that required assistance,” remembers McNabb.

The company grew quickly, and is now recognised country-wide for its contribution and delivery of professionally supported accredited skills training, and coaching and mentorship programmes that prepare learners for the working world.

GAINING POINTS

BBBEE regulation offers points for companies that spend a certain percentage of total payroll on accredited training and learning programmes that target the upskilling of previously disadvantaged demographic groups. Often, disabled, black, female employees are targeted as companies look to bolster their scorecard credentials and access lucrative government or national contracts.

“They have to make this annual compliance spend,” says McNabb of corporate clients. “If they don’t then they will lose points on the B-BBEE scorecard and fall out of the race to participate in business in South Africa. We provide a solution that takes the administrative, practical, and operational burden away from the client and channel it towards changing the lives of South Africa’s vulnerable youth.”

For example, a multinational automotive corporate could be mandated by government to upskill 1000 learners per annum, but with slow economic growth and businesses facing challenged commercial conditions, this could be unrealistic to implement. Partnering with EduPower makes requirements easier to achieve, and simpler to manage.

“Clients get their skills development annual mandates taken care of by us in a way that doesn’t impact their business at all,” highlights McNabb.

“However, the youth are the big winner,” he adds. “They can be disenfranchised or vulnerable and we give them education, experience, and assistance in getting into the industry or creating their own business. Under the care of our mentorship team, we help them create companies that are a going concern, and they exit with a running business. Usually, they would hire more people and that is a massive win for the country, the learners, and their families.”

The company’s core upskilling promise focuses on the Business Process Outsourcing (BPO) industry. Calling on its experience set deep in the Daly Group, EduPower can deliver relevant skills for all aspects of BPO including quality assurance, surveys, lead generation, customer service and telesales.

McNabb believes this is an industry home to major potential for the country as one of the last surviving sectors that will rely on people. “Most are downsizing and looking for efficiencies through tech where BPO companies are growing significantly with employable youth being the constraint to this potential.”

BUILDING UP

Currently, EduPower is home to 1400 learners and has strong ambition for future growth. eventually, the company hopes to manage 6000 learners each year, with those making a big impact in their communities and families.

“Our country is on its knees with unemployment and there is cost escalation like you wouldn’t believe. That, coupled with mass unemployment, is a recipe for disaster and we want to be a solution to the problem,” states McNabb.

Active nationwide, the company can assist clients of every shape and size, whether major international mining house, continental insurance corporate, national airline, or provincial state department, EduPower’s range is one of its key strengths.

“We have a new space in the Northern Cape where we are working with a large mining company who has a mandate to complete community upliftment projects but they struggle to find the route to channel that. Our service there is to take a brand-new job sector into a place that only has mining. That brings all sorts of socio-economic advantages such as keeping family units together, taking criminals from the street, and more,” says McNabb.

The town, Kuruman, in the Northern Cape is home to a large manganese mining operation and EduPower has established a small call centre for leaners to undertake NQF Level 3 qualification, preparing them for work in a contact centre environment as well as discovering various entrepreneurial activities undertaken locally.

“The town where we launched came up as one of the most challenged towns in the country,” admits McNabb. “That is good for us as we see it as us doing something remarkable in a place that needs it. We created 50 jobs there overnight and that changed the lives of learners and their families. If the funders and the mining companies continue to come to us, we can continue to roll this out – it’s a repeatable model. We can definitely create beacons of hope in all of these towns where something meaningful is needed. There is desperation in these rural areas and it makes sense to bring the jobs to people rather than having them all come to urban areas. Decentralising opportunities provides massive advantages.”

Learners in the Kuruman Academy are currently working on two live campaigns – an outbound data management campaign and a customer service inbound campaign. Mentorship is also provided to develop interpersonal and business skills, all of which ensures that when learners graduate, they are job ready. The corporate client wins, the individual wins, and EduPower wins. The state is also a big winner, realising new levels of employability where it has been sorely needed.

“Our two pillars are very strong,” says McNabb. “The entrepreneurial pillar is obvious – how do you run a small business, how do you manage cash, how do you manage yourself, how do you become a leader. With the BPO pillar communication skills are vital – hitting targets, working to deadlines, working under leadership, how to work with a diverse set of potential clients. IT skills are inherent and delivered across all courses.”

COMPLIANCE CHALLENGE

At its heart, EduPower was borne out of corporates clients need for BBBEE compliance. EduPower is home to more than 30 full time staff, as well as strictly vetted external providers, that understand requirements and know where to look when it comes to delivering opportunity.

“The ability to recruit deserving candidates is tough. There are tax breaks and employment equity requirements and this gives us a challenge,” admits McNabb. “We always manage to achieve the requirements of our clients, but sometimes – in the smaller pools – you end up taking people that you know are not of the right calibre. Our clients mandate us and they don’t give us room to choose what learners do what. That is our biggest challenge.”

Helping candidates then find meaningful employment at the end of a learnership is the next hurdle. With so many newly upskilled people, and so few jobs available, the entrepreneurial mentorship provided by EduPower becomes increasingly important. For each of those able to start their own small businesses, there is further hope of new opportunity.

“Taking people from extremely vulnerable backgrounds with many developmental concerns and poor education to date, and then creating an employed person or an employer of people in the future – that is not an easy task,” says McNabb.

“We achieve better results than most” he adds, “because we invest heavily in platforms of mentorship and of life skills – we really throw the kitchen sink at it when it comes to bringing what we call ‘I Can’ moments into their worlds.”

He adds that often, when learners first engage with EduPower, they lack confidence and would not choose themselves to be on their own team. “It is up to us to get them to that point over 12 months. We are trying to break a cycle of poverty – that is the whole point.”

“The delivery of entrepreneurialism is vital as, for the most part, our learners or their families have some form of side hustle to survive so we like to look at that and try and bring some professional skills to it to make it more than it is, both through skills development and donations we get from large corporates. That is something that puts EduPower ahead of others. There are no others that support with entrepreneurialism beyond a learner’s time on the course.”  

When learners complete their study, EduPower can provide a route into client businesses, and the likes of Toyota, Unilever, Absa, Grindrod, Hudaco, and more are always looking for those that have real skills, developed in a live environment, for their own business success as well as B-BBEE compliance. This is something that is being celebrated by EduPower and its community. “Our vision has shifted towards employment creation and we want to see people having more than just book knowledge. We want to see people employed, and we want to see people become entrepreneurs and create employment for others,” says EduPower MD, Rajan Naidoo.

With the strength of the Daly Group behind it, and with so much emphasis on job creation through BPO in South Africa, EduPower is in a perfect position to achieve its goals. According to management consultancy firm, McKinsey, employment levels in BPO in South Africa could triple, hitting 775,000 by 2030. The country has already been labelled the world’s second favourite BPO destination for three years in a row according to the 2020 Front Office BPO survey by Ryan Strategic Advisory. Globally, the BPO industry grew at 16% in 2019, but In South Africa the growth rate was 34%. Between 2014 and 2018, the South African BPO industry boomed by 24% CAGR. Clearly, the future is bright for this exciting business.

Confirming that all companies in the Daly Group have performed well recently, McNabb concludes with a hopeful outlook for EduPower. “Our education business is ultimately a compliance entity where our clients have to spend on skills development – it’s an annual requirement regardless of anything and companies will not risk future sales so that is strong. We do feel lucky and we are fortuitous but we are working hard to achieve a purpose.”

The company’s vision of ‘a transformed South Africa where everyone is employable’ is that little bit more in reach with each graduate and each corporate commitment.