Where are the results?
Millions were spent on transformation initiatives in the last few years – where are the results?
Comments are often made highlighting the fact that the real estate industry is mostly untransformed and that the demographic of estate agents does not reflect that of the country. The possible reasons for that warrants another article but it is appropriate to consider and question what the Estate Agency Affairs Board (EAAB), being potentially a force for change, has achieved in this regard.
The “One Learner – One Estate Agency Youth Empowerment Brigade Programme
The ‘One Learner – One Estate Agency Youth Empowerment Brigade programme is supposed to recruit young persons from previously disadvantaged backgrounds for the real estate profession. In June the EAAB’s new CEO Mamodupi Mohlala proudly announced the roll-out of phase 2 of this programme. In the EAAB’s publication The Agent it was stated that 1000 learners had been recruited and placed with employers and that 9000 more would be recruited by March 2020.
However, when asked for an update on the progress with this programme Mohlala contradicted an earlier report that 1000 learners were recruited and placed.
“The EAAB has interviewed and recruited 1,771 learners across the provinces. Of the 1,000 interns that were intended to be recruited only 250 were recruited and placed with host employers prior to Covid-19 and the remaining 750 were supposed to be recruited during March – May this year. However, this was halted due to the pandemic and the real estate industry not operating. Our current learnership programme started last year in August 2019 with the intention that the programme was scheduled to run for 12 months, however, due to the pandemic the programme was abruptly halted,” responded Mohlala. (Also see full response below.)
Were 1000 learners placed or was it only 250? It also begs the question why the “unravelling” of the programme is blamed on Covid-19. Participants were placed with employers on 17 June 2019 and the lockdown commenced 10 months later. Why would candidates not have completed the project, especially whilst receiving stipends (if they did as promised)? At worst they only needed some extension for completion of logbooks etc.
This program was first introduced in 2012 and after a protracted start the first phase was officially launched in 2015. Unfortunately, the programme has met with limited success and seems to have been plagued by oversights. It is still not clear how many of the first phase learners qualified, but it is believed to be only in the double digits. More importantly, it is also not clear how many were retained by the industry and are today successful estate agents. It is understood that more than R30 million was spent (wasted?) on this programme. If as many as 100 are successful today (some industry experts think way less) it came at an expense of more than R300 000 per person.
So, what went wrong? Says Jan le Roux, CE of Rebosa: “Advice and recommendations from the industry as to the implementation of the programme was ignored, learners were recruited on the promise of an income, or stipends (which was too little to sustain them) for the sake of attracting bigger numbers (as opposed to smaller numbers with adequate funding). Many learners were placed with principals who were ill-equipped to train and manage them. More importantly, the stipends were not paid timeously, and almost half of the learners gave up within a matter of months. Much emphasis was placed on school-leavers even though the average age of practising agents in the USA and South Africa exceeds 55 years. (This is for good reason as it is hard to imagine, with exceptions of course, that a home-owner would trust an inexperienced 18-year-old with a mandate to sell such a valuable asset.)”
Despite this seemingly dismal turn of events the EAAB last year launched the second phase of this program (starting on 27 June 2019) on the same basis and with more promises. Again, it appears that advice from industry was largely ignored. Again, learners were recruited with the lure of income and without the very necessary aptitude testing. They were not only promised stipends but also iPads, airtime and properties to sell. Most of these promises never realised.
Mohlala confirms: “Currently we are sitting with 135 active learners”. The expense is not known. This is far removed from the EAAB’s published intent to place 10 000 learners during phase 2 over a three-year period – not even Covid -19 can explain this.
Blocked due to compliance issues
Mohlala recently mentioned in a radio interview and elsewhere that more than 900 black-owned estate agencies (employing an even bigger number of individuals) have been suspended, “blocked” due to non-compliance.
In 2017 the EAAB announced an amnesty program that was to kick off in 2018 to “provide opportunities for PDI’s to enter and re-enter the real estate sector which will enhance transformation initiatives” (QUOTE SOURCE?) Roadshows were held to launch this “Amnesty”. In terms of the Estate Agency Affairs Act the EAAB always had the authority to issue a certificate to somebody in the “interests of justice” and this Section was quoted in the amnesty announcement.
To date it has not been confirmed that anyone has been granted any amnesty. It is not clear if the amnesty programme has been replaced by the “PDI Resolution”.
In January last year the EAAB announced yet another initiative, the “PDI Resolution” to exempt persons from previously disadvantaged backgrounds from certain requirements. PDI agents would be able to apply to be exempted from submission of audit reports, full or part payment of registration and renewal fees/levies and from fees for the required educational training. The EAAB authorised the CEO to execute this for an indefinite period and on whatever conditions appeared reasonable. However, the implementation of the initiative was only announced this year.
Agents had to apply via the EAAB website for application forms. Mohlala reports that “To date we have received in excess of 600 enquiries from interested parties and applications have been provided and some applications have been received.” On a question as to why this initiative is only at application stage whilst the board of the EAAB empowered her to proceed in January 2019, Mohlala chose not to respond.
“The merits of these programs deserve more comments, but it should be noted that the EAAB always had the wherewithal to enact these programmes and has failed to do so effectively, despite making announcement upon announcement. Those 900 black owned firms could have been accommodated years ago. Rebosa has also submitted a legal opinion to the EAAB in which the case is made that illegal penalties are charged. Many of the 900 may have been “blocked’ illegally leaving thousands without an income in the process,” says Le Roux.
Also, Rebosa year after year argued that the vast majority of trust accounts are dormant and that keeping a trust account should be optional. The EAAB resisted that and is still resisting that. Many agencies have been blocked for this very reason, adds Le Roux.
Assistance with training and education
It goes without saying that the EAAB could have used its resources to assist especially new entrants to the industry with training and educational resources so that they are not only able to trade but to do so with a better chance of success.
For instance, continuing professional development (CPD) courses are compulsory for qualified agents but not are not available to candidate agents. The question is, has the EAAB done anything to assist black candidates to qualify? Why is CPD not available to/compulsory for candidates at no cost? Almost a third (8 300 or 33%) of candidate agents are black.
CPD fees at R2000 for agents and R2500 for principals have also been a challenge for small firms. Many in industry regularly complain that the focus seems to be rather on generating income instead of promoting education and dissemination of information.
In conclusion, the EAAB has certainly strived to have the appearance of ‘a driver of change’ yet in the practical delivery there appears to be much room for improvement to make it easier for agents with PDI backgrounds to succeed in this rewarding yet challenging profession. Property Professional looks forward to receiving from the EAAB verifiable data iro the successful transformation actions to date. The challenge clearly lies in the execution. We would love to publish actual statistics of objectives achieved.
EAAB response on transformation initiatives received 21 September 2020
The CEO of the Estate Agency Affairs Board launched a second phase last year whereby she proposed that we would look at recruiting 1 000 intern agents from PDI backgrounds into the real estate industry.
Noting the national pandemic of the COVID 19 virus, employers were given payment holidays for payment of levies as per the President’s directive; it then meant that SETA’s would not be able to generate any revenue during this period which affected the Services SETA’s financial position whose has been the Funder of the programme. The Services SETA took a decision to postpone commencement for a future date still to be communicated.
The date will be informed by the financial analysis that will be performed in September 2020. Services SETA have advised they will communicate the outcome of the analysis and the impact on our commitment towards the end of September 2020.
We record that Services SETA committed to defer commencement of projects to May 2020 in the Q1 of the new financial year (2020/2021 financial year), but due to Covid-19 it has resulted that we could not commence with our phase 3 of the learnership.
The EAAB has interviewed and recruited 1,771 learners across the provinces.
Of the 1,000 interns that were intended to be recruited only 250 were recruited and placed with Host Employers prior to Covid-19 and the remaining 750 were supposed to be recruited during March – May this year. However, this was halted due to the pandemic and the real estate industry not operating. We will pick up on this during the remaining months of 2020 & 2021.
Our current learnership programme started last year in August 2019 with the intention that the programme was scheduled to run for 12 months, however, due to the pandemic the programme was abruptly halted as the entire nation was on hold due to Lockdown and learners could not go to the workplace. It is to be borne in mind that even after the lockdown levels were gradually lifted the real estate industry was only re-opened in July 2020 and learners that were able to return to the workplace did so. Currently we are sitting with 135 active learners.
See below table for reference:
|Province||Number of Learners started the Programme in September 2019||Terminations||Number of Learners Currently in the Programme for all the provinces|
The “One Learner – One Estate Agency” Youth Brigade Empowerment Programme’ is not just a transformation programme, it is an economic transformation programme that can change the society for our unemployed youth and produce youth that are not only employable but that can also themselves become employers that can create employment opportunities and thus contribute back to the economy of the country.
- The notice refers to black agents only – are agents from other PDI groups also included? The PDI groups include all persons defined as PDI’s in terms of the Broad Based Black Empowerment Act.
- The resolution dates from last year, why is it only enacted now?
- More than 1000 have been blocked. How many have applied to date? To date we have received in excess of 600 enquiries from interested parties and applications have been provided and some applications have been received.
- How was the R5 million limit arrived at? This was a decision taken at Board level.