03 Nov BEE and Skills Development
Significant changes in the revised Broad-Based Black Economic Empowerment (B-BBEE) codes on 1 May 2015 resulted in skills development becoming one of five priority elements on the B-BBEE scorecard. This element encourages Qualifying Small Enterprises (QSEs) and larger entities to provide accredited training to the previously disadvantaged to not only improve a business’s scorecard, but to help address the country’s skills shortage, and levels of unemployment and poverty. Let’s take a closer look at skills development…
What is the skills development?
In the Old Codes of Good Practice, only larger entities were required to comply with the skills development element. However, with the revised codes, QSEs wanting to achieve a good score will also have to comply. Aimed at ensuring increased black participation in businesses, as well as helping economic growth and social development, QSEs, with an annual turnover of more than R10 million but less than R50 million, and generic enterprises with an annual turnover of more than R50 million are encouraged to transfer valuable skills and relevant SAQA recognised qualifications to black employees and black unemployed persons. This requires a minimum of 40% or eight out of twenty points, and, by scoring positively, business owners can improve their Broad-Based Black Economic Empowerment (B-BBEE) rating whilst addressing imbalances and aiding transformation.
Skills development requirement for business
In order to encourage the private and public sector to equip the previously disadvantaged with valuable skills, the Department of Trade and Industry specifies a targeted training spend of 6% of the leviable payroll – up from 3% in the Old Codes. A maximum of 15% expenditure is allowed for soft skills or informal training where no NQF credits are awarded, and internationally recognised qualifications that aren’t recognised by SAQA cannot be claimed for. More points will be awarded where qualifications or training are provided to black employees and black unemployed persons, with additional points achieved for offering internships or apprenticeships. There’s also an additional five bonus points if 100% of trained black learners become employed by the company.
Objectives of skills development
As economic growth is highly dependent on skills, government hopes that, with continued investment in skills development, the country will be able to compete globally, thereby improving the economy by encouraging the establishment of more black-owned businesses and creating more employment. For their contribution, QSE and Generic Entities will be recognised with valuable points on their BEE scorecard – giving them a competitive advantage over companies that haven’t yet taken BEE and skills development seriously.
Sound BEE advice
Ready to make a commitment to skills development, through your company’s BBB-EE initiatives? Contact us for expert advice!