South Africa's private sector investment in training and its erosion as a result of HIV and AIDS

George, Gavin and Surgey, Gavin and Gow, Jeff (2014) South Africa's private sector investment in training and its erosion as a result of HIV and AIDS. South African Journal of Economics and Management Science, 17 (2). pp. 109-123.

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South Africa’s economic prospects depend on the productivity of its labour, and productivity can only be
maximised when the labour force possess the appropriate skills. Business is playing its part by offering
training opportunities to employees. Collectively, they are spending more than the government’s mandated
level on training. However, the HIV and AIDS epidemic is eroding this investment in southern Africa where
the HIV epidemic is at its worst. While there has been empirical work that provides estimates on the cost of
HIV and AIDS to business, there is very little data on the actual amounts large companies spend on training,
and how much of this investment is eroded as a result of HIV and AIDS deaths. Using an estimate of the
HIV and AIDS death rate in the private sector and survey data which identifies training expenditure by
sector, the authors estimate the extent to which HIV and AIDS has potentially eroded this investment. The
loss for all sectors was estimated at almost R10 million (R9,871,732) during the study year, which equates
to USD1,183,661 per annum. This amount represented on average 0.73 per cent of the actual investment in
training. The real costs of HIV and AIDS on business, which includes absenteeism, declining productivity
and other costs are difficult to quantify, but they are likely to significantly exceed this lost training investment
as a result of increasing morbidity and mortality rates due to HIV. It is therefore in a company’s best interest
to: (1) ensure that a sound HIV and AIDS policy is in place; (2) invest in effective prevention programmes;
and (3) provide the appropriate ARV treatment to infected employees if this treatment is not easily
accessible through the public health sector.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Open Access Policy The journal provides immediate open access to its content on the principle that making research freely available to the public supports a greater global exchange of knowledge.
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 26 Jan 2015 05:02
Last Modified: 05 Jul 2016 06:25
Uncontrolled Keywords: private sector, training, skills levy, costs, HIV and AIDS
Fields of Research : 14 Economics > 1402 Applied Economics > 140208 Health Economics
Socio-Economic Objective: B Economic Development > 90 Commercial Services and Tourism > 9002 Property, Business Support Services and Trade > 900299 Property, Business Support Services and Trade not elsewhere classified

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