Skills Development and the B-BBEE Codes

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Since the first B-BBEE codes were implemented in 2003, there have been several amendments. Recent changes have resulted in more black-owned and run businesses, as well as a rapid growth in African women in management roles. Some of the most noticeable code changes are contributor status, measurable elements, priority elements, skills development expenditure and exempt micro-enterprises.

At ProudAfrique, we understand how these procedures can be overwhelming for businesses which want to become B-BBEE certified or improve their existing rating.

Skills Scorecard

It is essential to understand the different criteria for BEE Skills training and how they affect your scorecard. The requirements may differ for the different Sector Codes, but they typically include the following:

  1. Skills development spend on black employees: This is based on the monetary cost of development and upskilling of black people and are not restricted to employees.
  2. Skills development for black employees with disabilities: These points are based on the cost of development of black employees with disabilities. The requirement that this group has to be employed is an anomaly, but needs to be included in skill planning.
  3. Black employees in learnerships, apprenticeships or internships: This is headcount based and these qualifying programmes are defined in the codes. It typically require both academic and practical learning.
  4. Black unemployed people in learnerships, apprenticeships or internships: This is headcount based and is a measure of the development of unemployed individuals.
  5. Bonus: Learners absorbed at end of the programme: This accounts for any learner in sponsored programmes that is absorbed at the end of their training.

Priority Element Explained

Of critical importance in this element is to understand the impact of the Priority Element requirement which requires the achievement of 40% of the core points for Skills Development to avoid the risk of your business dropping a Level on your BEE Scorecard. This requires a minimum number of points to be earned. The Various Sector Codes may differ.

Demographics

An important challenge in the Amended Codes for large companies is the fact that all the elements of the Skill Development scorecard are based on the demographic profile of the economically active population. This typically do not not apply to people with disabilities or the absorption bonus points, but is a critical consideration for most large companies.

People with Disabilities

ProudAfrique offers uniquely structured career programmes for black individuals with disabilities. These can guide them to meaningful employment opportunities at a supervisory level in companies while earning a basic income or stipend as learners. Companies that participate in these programmes can earn accelerated benefits in terms of their BEE Compliance while maximising the favourable tax rebates and incentives.

Leveraged Programmes

A key benefit of Category B, C or D training for existing staff is that the salaries of employees on qualifying programmes such as learnerships, internships and apprenticeships can be counted towards the total skills expenditure. It is important to keep it real. For example, to enrol the Financial Director on an accounting learnership for the sake of including his or her salary could have a high fronting risk. On the other hand, to enrol Junior and Middle Managers on a learnership or Workplace Learning Programme in management would be appropriate and meet the key strategy drivers.

Absorption

Learner Absorption is introduced as a measure of the Measured Entity’s ability to successfully secure formal permanent or long-term contract employment for previously unemployed learners or to assist the Learners to proceed with further education and training.

In order to improve points ratings and achieve future success in South Africa, businesses need to adopt a mindset that supports the much-needed drive for economic transformation. To learn more about the B-BBEE codes of good practice and what each entails, download our B-BBEE brochure here.

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