BBBEE – How to improve your score

03 Mar BBBEE – How to improve your score

We are now entering into the 8th year since the BBBEE codes of Good Practice were launched. Many businesses seem to still be struggling with improving on their level of compliance, mainly due to the lack of understanding of what is required of businesses to comply. In this article we will be giving you some ideas of what you could do to improve your scores, based on the current codes of 2007. As there are 7 different elements, we will focus on the first four elements in this article and then the last three elements in the next article.


Ownership

This is probably the most difficult element to score on, unless you already have black ownership. There are many options that businesses could consider when assessing whether you would like to include black ownership in your company or not. As every business is different, one has to consider which option best suits your particular requirements. There are different types of owners and here are a few examples:

 

  1. Individuals – Black male or female partner
  2. Employee Ownership schemes
  3. Broad Based Ownership schemes
  4. Co-operatives
  5. Venture capitalists

 

The critical factor in deciding on a Black partner, is whether you wish them to take an active role in the business or just become investors. This will also impact on how many points you would score as active partners would realise more points.

Management Control

Management control refers mainly to the owners, members, directors and senior top managers in an organisation. These are the individuals who make strategic decisions in the business and have influence on the business objectives and performance. They usually include CEO, CFO and Executive Managers that serve on the board. Other executive managers may also include HR Executive, National Sales Manager or IT Director.

In order to improve your score in this element you would need to consider the roles and responsibilities of your senior managers to determine whether they would fit into this category of Management Control. Businesses must also ensure that when categorising individuals in these positions, it must comply with your EEA reports, which are submitted to the department of labour.

Employment Equity

This element measures the number of black employees you have employed in Management (for Generics) and staff (for QSE’s). Firstly you must ensure that you comply with the Department of Labour’s regulation, where they require that if your business has more than 50 employees or your turnover exceeds the thresholds below, you are required to fill in EEA reports and submit to the Dept of Labour.

Every business should ensure that your organogram is updated and that staff and management are correctly categorised in their respective positions. It is also important to understand that, according to the codes of good practice, any individual that has a 3 year degree or diploma is deemed a Junior Manager. Also if any employee has any staff reporting to them they are also deemed to be a Manager and should therefore be categorised accordingly. For companies with large number of employees should consider sourcing assistance from BEE consultants to ensure that employees are correctly categorised according to the BEE codes, in order to maximise your score.

Skills Development

This element measures the amount of money you spend on training Black employees. Generics are required to spend 3% and QSE’s 2% of their leviable salary and wages bill in order to score maximum points. The spend must be on learning programmes such as learnerships and apprenticeships where there is a combination of both theoretical learning and workplace skills training. These learning programmes must be run by accredited learning institutions.

What most companies do not understand is that firstly the learnership does not have to be run by your industry Seta, but any registered Seta. Secondly, if your company is unable to send an employee on the learnership, you may pay for an unemployed learner to attend such learnership, as long as you have an agreement between your company, the learning institution and the learner. Once the learner has qualified, the company is encouraged to employ the learner, however is not obliged. This process assists unemployed people, by improving on their skills and making them more employable. There are also tax rebates and grants available, where companies may take advantage of these cost savings. Remember also that you will score more points for spending on black females rather than black males.

For more information on BBBEE please contact SAB&T BEE Services as we are an IRBA approved Registered Auditor, a full member of ABVA (Association of BBBEE Verification Agencies) as well as an associate member of NAACAM. SAB&T BEE Services can offer our clients solutions to their BBBEE needs, which include:

 

•             BEE Verifications / Certificates

•             Strategy Planning

•             BEE Training

•             Consulting

 

We may be contacted on 0860 233 669 or via email: marketing@nullsabtbee.co.za. We service all 9 provinces within South Africa.

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