Unlocking the True Cost of Developing IT Talent: Shifting from Inputs to Outcomes

At Wazee (meaning "Experienced Elders" in Swahili), we understand the critical importance of transitioning young talent into the workforce, particularly in IT and digital roles. However, what is too often overlooked is the true total cost of getting new entrants from fresh out of education to optimal productivity. Many skill development and employment programmes focus on short-term inputs like training and minimum wage salaries, without acknowledging the extensive investment required for real productivity. This is the primary reason for the disappointing results of so many well-meaning initiatives.

The Missing Costs: It’s Not Just Training and Wages

Too many workforce programmes underestimate the total cost to get young talent to a point where they are adding real value. Beyond training fees and basic wages, there are a range of hidden costs that are crucial to success:

• Onboarding and orientation: Time and resources required to get new hires acquainted with the workplace.
• Mentorship and management: The ongoing guidance from experienced professionals, who must devote time and effort to help these young professionals navigate their new roles.
• Tools and overhead: Devices, software licences, and office space to enable effective work.
• Development and coaching: Continuous training and feedback to sharpen skills over time.
• Productivity ramp-up: Factoring in the time it takes for new workers to reach full productivity, which can be 6 to 12 months in many cases.

Let’s look at a real example of this in South Africa for an entry-level IT professional.

The Real Total Cost of Developing an IT Professional

For a young IT professional, the journey to optimal productivity might take up to 12 months. Here’s a more realistic breakdown of what it actually costs to fully onboard and develop an entry-level IT person over this period:

Cost Elements (ZAR estimates)

Recruitment and onboarding: 15,000

Basic training (technical + soft skills): 60,000

Mentorship and management time: 45,000

Tools (laptop, software, etc.): 25,000

Office space and overheads: 30,000

Ongoing support and development: 40,000

Wages (12 months): 180,000

Productivity gap (6-12 months): 70,000

Total Cost (over 12 months): 465,000 ZAR

This example highlights the reality that the true total cost of developing an entry-level IT person into a productive contributor is not just the training costs and salary (often only ~150,000 to 250,000 ZAR in narrow-focused programmes), but nearly two to three times when factoring in the critical elements.

Why Underfunded Programmes Lead to Wastage

In many cases, workforce development programmes are underfunded, focusing primarily on training and minimum wage stipends. While this allows programmes to accommodate more candidates, they often fail to bridge the productivity gap. The outcome? At the end of the program, many candidates are not absorbed into the workforce due to their inability to reach the required productivity levels.

For example, a typical program might support 100 candidates with an investment focused only on training and stipends. However, without considering the total cost to optimal productivity, only 30% to 40% of these candidates will be hired by employers. The rest become displaced or remain underemployed, creating significant wastage of resources and effort.

This inefficiency is a direct consequence of focusing too much on inputs (training hours, candidate numbers) rather than outcomes (productive employees). A narrow focus creates a false economy, with initial savings being offset by the failure to create sustainable, long-term employment.

Shifting the Mindset: From Inputs to Outcomes

To address this problem, there needs to be a fundamental shift in how skills and employment programmes are structured and funded. Instead of simply measuring inputs, such as the number of candidates enrolled or hours of training delivered, we need to focus on the outcomes that matter most:

• Job absorption rates: How many candidates are being hired at the end of the program.
• Time to optimal productivity: How long it takes for these new employees to contribute effectively.
• Return on investment: The economic value generated by these new workers over time.

Wazee’s Holistic, Outcome-Based Approach

At Wazee, we don’t just train. We deliver certainty in outcomes. Our programmes are designed to ensure that young entrants reach optimal productivity by considering the true total cost of workforce development. By working closely with employers, we help funders and stakeholders get the most out of their investments with a focus on sustainable employment and long-term productivity.

• Holistic cost modelling: We help you understand and cover the full range of costs — from recruitment and mentorship to workspace, tools, and time for productivity ramp-up.
• Integrated support systems: Our programmes provide ongoing coaching, mentorship, and real-world work experience, ensuring new entrants are supported every step of the way.
• Outcomes-driven: We commit to measurable results: higher absorption rates, faster productivity ramp-up, and tangible ROI for your investment.

The Bottom Line: Achieving ROI through Real Investment

Ultimately, workforce development needs to move beyond superficial training and wage models to deliver long-term value. Underfunding initiatives only perpetuates a cycle of wastage and underachievement. By investing in true total costs, we can ensure that young people not only enter the workforce but thrive, contributing meaningfully to the economy and delivering real returns for investors.

At Wazee, we offer programmes that bridge this gap, providing young professionals with the support they need to reach optimal productivity while giving employers the certainty that they’re investing in productive talent that will drive long-term value.

Let’s work together to create meaningful employment outcomes and move from input-based to outcome-based models that build a more productive future.

#InvestInTheFuture #ProductivityMatters #HolisticWorkforceDevelopment #Wazee