BEE and the associated transformation challenges in South Africa is a hotly debated (and sometimes contentious) issue between business owners and the nation’s policymakers. The objective of this article is not to debate the merits of either position but rather to understand what the reality is for certain organisations concerning their Skills Development and Training obligations, and how best to maximise the return on their training budget when investing in staff.
It’s unlikely BEE policies are due to end anytime soon, so surely the smartest choice is to utilise them to your organisation’s benefit as best you can, whilst simultaneously uplifting and developing staff so that they, along with their respective communities and the business as a whole benefit.
To put things in perspective, when comparing the recent BBBEE codes to the previous; the old BBBEE codes required a 1% spend of annual payroll on previously disadvantaged individuals. The new codes require a 6% spend of annual payroll, which is a substantial difference. Companies can claim training spending on their staff, along with non-staff (such as community members not employed as part of a CSI project) as delegates. Additional points can be achieved by supporting learners, apprentices or interns as well as helping less-abled previously disadvantaged individuals.
Another addition to the new BBBEE codes is; the spend and number of learners, interns or apprentices has to be divided by gender into three groups: African, Coloured and Indian, based on provincial or national formulas, which take into consideration the economically active population in the organisation’s operational areas.
In addition to this, specific Learner Programme Matrixes have been added to the codes specifying the category from which training spend can be claimed. Claiming limits of 15% have been added for non-accredited training and informal training. This is to ensure organisations focus spending funds on accredited training and structured learnerships, apprenticeships or internships. In short, the emphasis is being directed towards valuable, accredited training and skills that can be applied to the organisation, thereby both improving operational activity and upskilling the individual.
Training and upskilling is one of the most significant budget items for the South African Treasury – it would be surprising if you lived in South Africa and didn’t have an opinion on our Education system and the recent challenges that have been experienced by schools and Universities!
Education is one of the most important factors for empowering staff and improving your operations. To cite an example from our training division (Terra Firma Academy) would be our Green Your Office course. Develop and upskill your cleaning staff and office manager on how to convert your office into a green office. They would learn about water contamination, water and energy efficiency as well as responsible procurement and recycling. All items that add to any organisation’s operational costs. Your organisation would improve not only its working environment but also its environmental performance.
Another relevant example would be Energy Efficiency Training. Terra Firma Academy offers a variety of energy efficiency courses, building them one atop another. The courses are accredited, and the attendees would learn the quick wins available, along with more complex saving opportunities. All of this type of training spending can be claimed against the Skills Development Levy to which organisations are required to contribute. The organisation would not only benefit from claiming the training spending and achieving more points, but also empower their employee to find operational savings opportunities. These skills are valuable to both business and individual.
Although accreditation is not strictly required to claim Skills Development spending, should you wish to claim over and above the 15% threshold, the courses would have to be facilitated by an accredited training provider and be formally assessed. The course would need to be SETA (Sector Education Training Authority) accredited or offer CPD (Continuing Professional Development) points.
One of the challenges faced by business is understanding the actual requirements for this BBBEE element and how to maximise the organisation’s spending on the different gender and ethnical groups. Terra Firma Academy can assist in this area and help find ways to upskill employees or external unemployed individual to improve energy and water efficiencies and thereby directly improve an organisation’s environmental performance. If your organisation needs support in maximising their spending on a particular gender or ethnic group, Terra Firma Academy can source bursary candidates for your organisation and collate the correct documentation for the annual BBBEE audit.
Aside from pure training, a bit of lateral thinking can be employed to assist your organisation further in achieving a better BBBEE result by addressing the Supplier and Enterprise Development requirements. A perfect example in addressing the Supplier Development portion would be to offer a third party supplier like your outsourced cleaning company to send their staff on training. This is a great win for you, your supplier and the individual getting trained.
To claim credit for Enterprise Development, consider setting up and hosting an Energy Efficiency Management course for other SMME’s, and then claim the expense pro rata for each Coloured, African or Indian attendee.
So, to summarise, whether you agree with BBBEE policies or not, making the effort to comply or improve your organisation’s ranking means more than just a number to quote on a supplier application or procurement form.
It can have a meaningful impact on your supplier relationship, not to mention improved staff retention and an overall improved work environment!