From regulatory compliance to organisational capability: Managing graduate internships in South Africa

Orientation: South Africa’s skills development system requires organisations to participate in workplace-based learning through mandatory levies and Sector Education and Training Authorities (SETAs). Graduate internship programmes are a common organisational response, yet their design and developmental value vary widely. Research purpose: This study examines how organisational and managerial responses to skills development regulation shape the management and developmental effectiveness of graduate internship programmes. Motivation for the study: Although internships are widely implemented, many generate limited developmental and organisational returns. Understanding how compliance is managed within organisations is essential for improving internships as capability-building interventions. Research design, approach and method: A qualitative, interpretive design was employed. Data were collected through 48 interviews and focus groups with: (1) senior managers, (2) human resource (HR) and learning professionals, (3) mentors, and (4) graduate interns across public, private and state-owned organisations. Data were analysed using the Gioia methodology. Main findings: The findings reveal a compliance–capability continuum. Compliance-oriented approaches prioritise audit and funding requirements, resulting in limited learning and organisational capability development. Capability-oriented approaches integrate regulatory requirements into strategic HR systems, using structured mentorship and aligned incentives to support graduate development and organisational learning. Practical/managerial implications: Managers can enhance internship effectiveness by aligning compliance processes, mentorship practices and performance systems with developmental objectives. Contribution/value-add: The study demonstrates how regulatory compliance can be managed strategically to support organisational capability development and improve the return on investment in graduate internships.