In May last year the Department of Trade and Industry brought into effect the Broad-Based Black Economic Empowerment (B-BBEE) Amended Codes of Good Practice. The biggest changes to the amended codes
were that large enterprises are required to comply with all three the priority elements of the generic scorecard (ownership, skills development, and enterprise and supplier development), and that qualifying small enterprises are required to comply with ownership as a compulsory element and either skills development or enterprise and supplier development as a priority element (Notice 1019, Gazette number 36928).
According to the amended codes the skills development element measures the extent to which employers carry out initiatives designed to develop the competencies of black people internally and externally. The sub-minimum requirements for skills development is 40% of the total weighting points for skills development which, on the generic scorecard, is 20 points. It is further required that black women should form between 40% and 50% of the beneficiaries of the relevant elements of the BEE scorecard, and that black people with disabilities, black youth, black people living in rural areas, and black unemployed people also form part of the beneficiaries.
The table below shows a breakdown of point-allocation on the generic BEE scorecard.
Skills development, which is an important contribution to the country’s achievement of economic growth and social development goals, is one of the easiest priority elements to score high points in. One of the reasons for this is that it is no longer necessary to train only employees. Your business can now claim for training costs of unemployed people from within the community.
I am passionate about giving back to the community and that leads to my choice of skills development being that of community training. With such a high rate of illiteracy in South Africa I like to recommend Adult Education and Training (AET), also known as ABET, to my clients. My company is one of a handful of fully accredited private ABET service providers in the country and any of these service providers should be able to help you score the maximum points in categories 22.214.171.124 and 126.96.36.199, and also in category 188.8.131.52. That is a total of 16 out of the potential 20 points of the skills development element of the generic BEE scorecard; 80% compliance just through AET. A further four points can be scored through learnership, but that is a topic for another day.
If your annual payroll is R5 million your business needs to spend R300,000 (6% of your annual payroll) for 100% compliance with category 184.108.40.206 (eight points). If you spend a further R15,000 (0,3% of your annual payroll) on training black people with disabilities you will comply 100% with category 220.127.116.11 (4 points). To comply 100% with category 18.104.22.168 (four points) a total of 13 unemployed people from the community should be included in the training programme. This is on the assumption that your business employs a total of 50 people (2.5% of your total employees).
How can an accredited service provider help you comply to 80% of the skills development element on the generic BEE scorecard with only AET? Using the examples above your business provides the ABET service provider with a budget of R315,000 upon which the service provider then identifies and recruits a minimum of 13 people from within the unemployed community for training in for instance basic communication in English. Out of the 13 community members the service provider will be sure to include disabled unemployed people. If your service provider has its own academy it is now possible for that provider to facilitate the training without any involvement from your business and provide your company with all the necessary documentation required for the verification procedures.
Complying with the skills development element of the generic BEE scorecard is as easy as ABC.
Samson Baloyi is the Director at Triple E Training Holdings.