PMTE strategy to address under capacitation: with Deputy Minister

Meeting report

The PMTE Human Resources strategy was presented by Mr Lwazi Mahlangu, DPWI Communications Information Officer and Mr Chance Zaba, PMTE Director: HR Planning and Recruitment. The strategy is to address the under-capacitation in PMTE, necessary for unlocking the value of the large asset portfolio. The current capacity level of PMTE was also outlined.

• The filling of positions for PMTE is done in line with the 2016 approved structure
• The Department approved priority list for PMTE in 2018 to remain within the compensation of employees ceilings.  As a result all positions falling outside the priority list were declared as unfunded and de-activated from the post establishment.
• The Department took a decision that any position becoming vacant from 1 April 2018 onwards should be considered as funded and should be filled without further reprioritisation to maintain capacity levels.
• During April 2023, the Department placed a moratorium on the filling of positions, including senior management services, which was uplifted in June 2023.
• Filling of positions will be impacted by the National Treasury cost containment measures.

Key considerations
• Current pressures on the compensation of employees budget.
• National Treasury cost containment means motivating to it for filling of critical positions.
• Market forces (competition for scarce and special skills)
• Public Sector requirements (experience plus qualification requirement).

Discussion
Mr W Thring (ACDP) asked for clarity on the slide that contained information about the acquisition of key skills by PMTE. South Africa had experienced a decrease in income tax collection and this had a direct impact on Treasury. The reduced tax revenue was posing a constraint on the skills acquisition required at PMTE as Treasury funds it. He inquired about the plan PMTE had in place to navigate the tension between the constraints imposed by Treasury and the need for skilled artisans, technicians, engineers and others at PMTE.

Ms L Mjobo (ANC) asked if the vacancies for both permanent and contract positions had already been advertised. What was the closing dates for application if these positions had indeed been advertised. What was the stability of the leadership structure considering the numerous vacant leadership positions?

Mr I Seitlholo (DA) asked if the adoption of 2016 PMTE approved structure remained feasible in 2023. On 31 August 2023, he had conducted an oversight visit to Park Road Police Station, which is the largest police station in the Free State, as well as another police station in Bloemfontein. During these visits, he observed that they were experiencing capacity issues. He attributed these capacity challenges to the shortcomings of PMTE and mentioned that entities like Coega Development Corporation (CDC) and Development Bank of Southern Africa (DBSA) were acting as implementation agents instead. PMTE which should be responsible for project implementation. He also asked how DBSA would be held accountable for allegations he received during his oversight visit, particularly about service providers who had not received payment.

He pointed out that a substantial amount of money was being lost as these funds could have been allocated towards providing police services or renovating police buildings. This would enable communities and the South African Police Service (SAPS) to utilize these resources in a sustainable manner, resulting in improved service delivery to communities.

Mr Seitlholo stated that Treasury had implemented austerity measures in spending. He expressed concern about the impact of these measures, as it was widely known that several projects would inevitably face funding reductions. In examining some of the proposed PMTE vacant positions, he questioned the potential consequences of the budget cuts and asked about PMTE's intended course of action.

Mr Seitholo (DA) also asked PMTE about the challenges they were encountering in retaining expertise. He sought information on how PMTE planned to address these challenges, especially considering the budget constraints imposed by Treasury.

The Chairperson asked if the adoption of the 2016 framework structure remained relevant, considering the numerous changes that had taken place within DPWI. She suggested that it might be necessary to make adjustments to the 2016 framework in certain areas.

The Chairperson highlighted the many vacant positions that had remained unfilled in the entity for the past four years. This had prompted some young experts to leave the entity because no action had been taken to fill these positions resulting in failure to retain expertise. She acknowledged PMTE's efforts to address this by aiming to fill the vacant positions by 1 December 2023.

The Chairperson asked if the incapacitation of PMTE was the primary factor that had led to the delegation of work to Coega and DBSA.

PMTE response
Mr Zaba replied about the tension between National Treasury's cost containment measures and the acquisition of PMTE scarce skills. PMTE needed to establish a method of engagement with Treasury to secure funding for these critical positions. National Treasury had recently issued guidelines in a 31 August 2023 letter which provided clarity on the cost containment measures. These guidelines clearly indicated the need for an approval process departments must adhere to when advertising and filling certain positions, given the current circumstances.

PMTE needed to adopt a realistic approach and conduct a thorough prioritization of its critical vacant positions. It was currently in the process of identifying those positions. The number of critical vacant positions would serve as motivation and would be presented before being finalized and signed off by the Director General. This would then be considered by National Treasury and the Department of Public Service and Administration (DPSA). The focus would primarily be on critical positions, and filling these positions would significantly impact the efficiency and effectiveness of both PMTE and DPWI. The vacant executive leadership positions had already been advertised and were currently in the advanced stages of recruitment.

Of the current 530 vacant positions, 123 of them had not yet been advertised, while the remaining 407 had and were progressing through various stages of the recruitment process. Lower-level positions had not been prioritized for advertisement. They would be removed from the funded list to accommodate unfunded vacant critical positions.

PMTE maintained continuous advertising of these positions, making use of the DPSA vacancy circular. In cases where planned retirements were anticipated, especially for individuals retiring at the age of 65, a proactive approach was adopted by advertising these positions even before the employees left. This strategy aimed to ensure that as soon as they departed, their positions could be filled promptly, minimizing any leadership gaps. The focus was placed on technical positions as well as senior management roles. Two regional manager positions had recently been advertised, although they were not currently vacant. One incumbent was transferring, and the other was nearing retirement. In filling these positions, alignment with Treasury's cost containment measures would be essential.

Mr Zaba acknowledged that the substantial number of vacancies at leadership level was adversely affecting PMTE leadership stability. PMTE occasionally appointed staff to act in these positions, but this often resulted in a chain reaction of acting appointments. In certain instances, there were not any suitable candidates available for acting roles, creating gaps and further impacting leadership stability.

On the challenge of retaining expertise, Mr Zaba noted that short-term contracts, in contrast to National Treasury guidelines, had made it difficult to retain professionals like accountants and related specialists. PMTE had transitioned from short-term contracts to medium to long-term contracts, with 36-month contracts becoming the norm. Additionally, efforts were underway to convert some contract positions into permanent ones to enhance expertise retention.

Another factor contributing to retention challenges was the stringent nature of the public service regulations. These regulations presented obstacles when attempting to appoint expertise from outside the public service. A notable case study was the PMTE position of Chief Director: Financial Accounting and Reporting which had remained vacant since its inception in 2016. Five potential candidates had declined offers due to salary considerations. PMTE had sought the Minister's approval to request the Ministry of Public Service and Administration (MPSA) to allow it to advertise the position with a flexible salary range. This adjustment would enable negotiations with potential candidates, as the public service regulations mandated appointments at the first notch of the position's salary range, making it challenging to attract external expertise.

A PMTE Director replied about the relevance of 2016 approved organizational structure. It was crucial to understand that this was not set in stone and could evolve over time. While the macro-level structure had been changed to align more closely with PMTE goals and objectives, the micro-level structure typically underwent adjustments to address the organization's evolving needs.

He pointed out that the 2016 structure was no longer feasible due to the numerous changes that had been made. Some of these changes were reflected in slide 22 of the presentation. These changes extended to lower-level positions, involving reconfigurations to align with its current requirements. PMTE was also considering various requests from different branches aimed at addressing areas of concern and identified needs, all of which contributed to the need to amend the existing approved structure.

PMTE would continue to refer to the 2016 structure primarily because it was recognized by DPSA, and it maintained a copy for reference. When making amendments, PMTE followed the established change process to ensure compliance. It would consult with DPSA until all amendments were finalized. DPSA would then update the structure accordingly.

Mr Mahlangu pointed out that external factors, such as economic trends, had a significant impact, not only on the fiscal aspect but also on the labour market and the pricing of labour. Specifically, he highlighted the challenges in attracting skilled and expert individuals in the context of labour market dynamics and the value associated with their expertise.

He acknowledged the importance of striking a balance in dealing with these external factors, referencing Mr Zaba's earlier mention of market trends and competition, especially concerning specialized skills and the Occupation Specific Dispensation (OSD).

Additionally, Mr Mahlangu emphasized that the landscape had evolved since 2016, particularly in the context of the built environment. There was the emergence of innovative concepts like the Fourth Industrial Revolution (4IR) and smart instruments that allowed remote monitoring of building performance. This extended to construction methods where remote construction practices were becoming more prevalent.

Mr Mahlangu highlighted the need to strike a balance in one's organizational structure. He emphasized that the structure, which had initially focused on facilitating the administration of functions, needed to adapt to innovative ideas. These innovations included the use of instruments like drones, which were efficient compared to the traditional approach involving a larger number of personnel on-site. He acknowledged that this represented a delicate balancing act.

Mr Mahlangu linked this discussion to the earlier conversation about the impact of reduced revenue collection, especially for the great demands placed on PMTE. The consideration of using modern, efficient instruments versus traditional personnel deployment raised questions about the opportunity cost – the cost of alternatives. Finding the right balance between deploying personnel and utilizing smart instruments and innovative ideas was a strategic challenge it was addressing.

Mr Mahlangu explained that the organization's structural evolution was an ongoing and dynamic process. It involved continuous debate, assessment and evaluation of the structure considering external forces and market trends to ensure alignment.

Mr Mahlangu clarified that they aimed to align the Annual Performance Plan (APP) with the PMTE mandate, despite facing challenges due to the current organisational structural capacity. These capacity challenges did not diminish commitment to achieving the APP targets. Instead, they determined how to effectively manage within the existing structure and capacity, all while preserving their mandate.

Mr Mahlangu highlighted that they were not limited by capacity constraints when it came to reshaping or maintaining the PMTE scope in response to external factors. However, they remained mindful of these constraints, along with cost considerations, as PMTE strives to uphold its mandate. Its approach involved careful targeting within its means to ensure that the organization could still fulfil its objectives.

On using DBSA and Coega, he highlighted government's response rate and emerging trends, particularly the procurement irregularities highlighted during the Zondo Commission. Additionally, he pointed out the importance of embedding risk controls within the procurement process.

Mr Mahlangu addressed contract management and contract administration. He explained that contract administration focused on ensuring that the documentation was prepared efficiently and that the time taken to consolidate these documents was minimized. This also involved balancing capacity within supply chain management to handle documentation alongside overseeing the core business of managing and supervising projects from initiation to completion.

Discussions around contract management also necessitated an examination of emerging trends in this area. Internally, they recognized that they already had a well-equipped environment, but the challenge lay in balancing these new trends with their existing capabilities. He referred to Mr Zaba's comments about addressing elementary aspects in certain areas to free up positions that could be utilized to respond to new contracts. Their approach to contract management and procurement challenges considered evolving trends and capacity considerations.

Further questions
Ms S Schalkwyk (ANC) expressed her deep concern about the vacancy rate , particularly where some positions fell below the mandate set by DPSA). If the vacancy rate percentage was translated into actual vacancies, it would be a cause for alarm, especially considering the high unemployment levels in the country. She stressed the urgent need for a concerted effort to reduce the vacancy rate well below the DPSA-approved vacancy rate.

Ms van Schalkwyk drew attention to the high vacancy rates in the regional offices, specifically in Bloemfontein and Kimberley. She asked why the rate was particularly high in these locations. Were there challenges in attracting skilled employees in these areas or were there other reasons?

Ms van Schalkwyk noted that 12% of positions were filled by contract employees. This situation posed a significant challenge as the preference was for full-time employment over contractual arrangements. She acknowledged PMTE's initiative to transition these contract positions into permanent roles. However, it was necessary to attach a specific time frame to this initiative. Contract positions had persisted for many years yet it had not been effectively addressed. She hoped to witness swift progress on this matter and would appreciate any movement toward a resolution as soon as possible.

Ms van Schalkwyk understood the rationale for prioritizing critical skilled positions over lower-level ones. However, she raised concern about the current unemployment rate where many individuals with lower skill levels were potential candidates for employment in these lower-level positions. She found it worrisome because leaving such positions vacant placed additional burden on the current employees, particularly in areas like office cleanliness, where staffing levels were already thin.

When individuals in these positions resigned, retired, or passed away without being replaced, it imposed a heavy workload on existing employees. This issue was of great importance to her. She highlighted the current situation where organizations predominantly had high-level employees, while low-level positions remained vacant. This placed undue pressure on those who were currently filling these positions. There was a need for balance, not only filling senior management positions but also ensuring lower-level positions were filled. Even if these positions were not filled at the same scale as before, it was important to give attention to this as well.

Ms van Schalkwyk referenced slide 28 on its efforts in the Technical Skills Programme, particularly the candidacy programme aimed at professionalizing young professionals. She acknowledged the presence of mentorship programmes aimed at facilitating professional registration, where 67 candidates were paired with 10 mentors. However, she asked for information on the outcomes of these efforts. Her concern was there were numerous candidates, but many were not successfully transitioning to become professionals, which had persisted for several years. She emphasized the need to witness tangible results in professionalizing these candidates.

Ms van Schalkwyk asked about the workplace skills plan and if provision was made to enhance the skills and capabilities of lower-level employees, making them eligible for higher-level positions as part of upward mobility. It should focus on developing internal talent rather than solely relying on external hires.

Lastly, she expressed her satisfaction with the creation of the Chief Director position to oversee small offices and coastal properties. This was a special project that had emerged following the Committee's oversight activities. She welcomed this development but sought clarity when this position would be filled.

PMTE response
Mr Zaba spoke about efforts to further reduce the vacancy rate to below 10%. It was important not solely to focus on the percentage but also consider the actual number of vacant positions. He referred to the 2017/18 financial year when the DPW/PMTE vacancy rate stood at 37%. There had been consistent efforts to reduce the vacancy rate to its current level.

Mr Zaba pointed out that nearly 80% of current vacancies had already been advertised and they were making significant progress in achieving a vacancy rate below 10%. He underscored the understanding that failing to fund these positions would result in substantial underexpenditure on Compensation of Employees (COE), especially for PMTE.

Mr Zaba attributed the high vacancy rate at Kimberley and Bloemfontein regional offices to the fact that many of the positions were lower-level roles. These positions were currently under reprioritization efforts to address that concern.

He acknowledged and appreciated the comment made by Ms van Schalkwyk on the need to strike a balance between department productivity and contributing to government's job creation programme. They were committed to appointing youth and individuals with elementary skills who qualify for positions.

Mr Zaba referred to the 12% of contract appointments within the total count. These contracts did not solely consist of fixed-term contract appointments; they also included participants in skills programmes, such as the candidate programme. The appointments for these participants were aligned with the Occupation Specific Dispensation (OSD). Due to system requirements, even for positions already approved in the structure, contract positions had to be created to facilitate the payment of stipends and salaries through the PERSAL system. They had not provided a breakdown of the numbers to distinguish between fixed-term contracts and participants in technical skills programmes and the candidate programme.

Mr Zaba discussed their initiatives for the year, including the Professional Management Training Programme and the process of transitioning contract positions into permanent roles. One specific aspect in progress was related to its asset register, aimed at improving audit outcomes. The asset register would also play a crucial role in assisting it in making informed investment decisions.

Mr Zaba acknowledged that some contract appointments were linked to short-term projects and were not suited for the creation of long-term permanent positions. While contract positions might continue to exist, their numbers would be reduced. PMTE would provide further breakdowns in future engagements with the committee, specifically to clarify how many contract positions were associated with the skills programme and how many were of a fixed-term nature. These details would include success rates.

Mr Zaba discussed the PMTE success areas focusing on the reports received from colleagues within the Professional Services Branch. They occasionally received updates about candidates who had recently registered as professionals, thanks to this Continuous Development programme.

One significant achievement he highlighted was the department's ability, for the first time, to design and produce mechanical instruments. He pointed out that a boiler designed through these programmes was currently in operation, with key contributors being candidates who had participated in theprogramme under the guidance of leadership.

A committee member asked about mechanical field studies and the extent to which the workplace skills plan (WSP) was utilized to enhance the skills of lower-level employees, making them eligible for upward mobility.

On PMTE overall training and development initiatives, he noted the presence of a career management component. This component focused on assisting internal department employees who wished to change their careers. These individuals were guided in determining their desired career paths, required qualifications, and areas where their skills aligned. Once qualified, these employees were considered for experiential exposure in the relevant area, preparing them for positions when they were advertised. One of its main success areas in the implementation of a programme for its cleaners, many of whom had obtained higher qualifications through this programme and had subsequently been appointed to sustainable positions.

Mr Zaba discussed the PMTE efforts in its skills programmes. Some programme participants were internal employees, particularly in the artisan training programme. This programme enrolled general workers and tradesmen who had been part of its workshops for years. These employees, although experienced, were undergoing a recognition process for their artisanship. They were required to go through a series of steps, starting with enrolment at a further education and training (FET) college, followed by mentorship and preparation for tests.

Mr Zaba highlighted the significant success they had achieved in this space. The revitalization of the workshops would facilitate the appointment of those who had successfully qualified but had not yet been appointed to positions, partly due to position availability and the pressures on their workforce composition.

Closing remarks
The Chairperson expressed her appreciation for the report and responses, noting that there is considerable work ahead and there is room for improvement in various aspects.

The Chairperson suggested that in the next meeting they should wear traditional attire as a way of honouring September as Heritage Month.

The Committee adopted the minutes from the previous meeting and the meeting was adjourned.