richardw@workforce.co.za

By Daniel Orelowitz, Managing Director at Training Force

The purpose of Broad-Based Black Economic Empowerment (B-BBEE) is to promote inclusivity and grow all areas of South Africa’s economy. If done properly, it helps to close our skills gap, grow the Small Medium Enterprise (SME) sector and encourage entrepreneurship, all of which will stimulate economic growth. However, in many instances B-BBEE is nothing more than a tick box compliance exercise, which negates any benefit and is not the spirit in which the requirement is intended. The right training partner can help businesses take their B-BBEE to the next level, aligning training with business to ensure sustainable growth and improved efficiency, among other benefits.

Working smarter, not harder in the wake of Covid

For many businesses, the pandemic has meant reducing staff complements in an effort to stay afloat. This has the unfortunate consequence of also forcing staff to work harder and take on new roles, making training more important than ever.

Skills development is also an important element of the B-BBEE scorecard, helping those who previously have not been afforded opportunities to upskill and grow. Incidentally, skills development is also critical in ensuring economic stability and prosperity, and South Africa has a significant skills gap that needs to be addressed.

By embracing the true spirit of B-BBEE, the right skills can be addressed to make a meaningful difference to business. Aligning B-BBEE efforts, particularly training, with actual business needs and values, will not only ensure people are upskilled in a relevant way to help grow the economy, they will also be able to improve business and advance themselves at the same time.

What you put in is what you get out

The reality is that B-BBEE is a requirement for doing business in South Africa, however, this should not be the sole or overriding imperative driving it. Businesses in South Africa need the economy to function and prosper to ensure their own prosperity and growth. Investing in the transformation of the economy  increases the buying power of the market which in turn means more customers, and a more profitable business.

Our current unemployment levels reduce the amount of money in circulation, and every business is feeling the pinch. B-BBEE should not be regarded as a hindrance to business, but rather an opportunity to obtain necessary skills and drive the recovery of the economy faster.

Skills level up

Skills development lies at the heart of both B-BBEE and economic recovery, which makes training crucial. Finding the right training partner is essential to help upskill employees as well as to provide employment and skills development opportunities through learnership initiatives. Your training partner should also manage the areas of the B-BBEE scorecard focused on skills, which account for 20% of the overall rating.

B-BBEE accreditation is also essential to ensure that businesses will receive the desired return on their investment into training. Getting it wrong can cost organisations a lot of wasted money but getting it right will undoubtedly aid a business. The crux is to embrace B-BBEE for the right reasons and align training with required skills, so that businesses will not only tick all of the right boxes, they will also benefit themselves and the economy as well.

About Training Force

Training Force is a Skills Solution company that provides a variety of meaningful and shared valued accredited training specializing in Learnerships and Skills Programmes. The training interventions assists companies to maximise their BBBEE scorecard and at the same time makes a real impact on employees and learners. All programmes are aligned with SAQA (South African Qualifications Authority), the National Qualifications Framework (NQF) and accredited SETA Quality Assurance departments.

By Daniel Orelowitz, MD at Training Force, a company within the Workforce Training and Consulting Cluster, part of Workforce Holdings

July 2021

Skills development is one of the cornerstones of Broad-Based Black Economic Empowerment (B-BBEE) and makes up a significant percentage of the scorecard. More than simply seeing it as a compliance exercise, however, South African businesses need to shift their mindset. The goal of B-BBEE is not to stifle businesses, but to provide a fair environment for all, and to uplift previously disadvantaged people to enable them to earn an income and contribute to the Gross Domestic Product (GDP) of the country. Skills development should be seen as an opportunity to grow economic participation, which ultimately will benefit all businesses by bolstering the country’s entire economy.

The foundation of B-BBEE

B-BBEE is a prerequisite for doing business in South Africa, especially when large organisations and government tenders are involved. The goal is not to create additional hoops for business to jump through, but to create a fair environment for enterprise. It provides a competitive advantage to smaller businesses entering the market, in an effort to stimulate economic growth as well as job creation. The emphasis on skills development is aimed at equipping South Africans with new skills to allow them to progress and in turn, succeed and grow business.

While the principles of B-BBEE are sound, the way it has been applied has not created the success that is required to redress the disadvantages of the country’s historical path. As the economic landscape currently stands, unemployment is a massive problem, and discouraged jobseekers an even larger one. It is unsustainable for the majority of South Africans to be inactive in the economy, and we need to address this as a matter of urgency.

Better business for all

Without applying B-BBEE principles, businesses risk cutting themselves off from potential markets – while they may not do business with government directly, their customers might, and procurement scores have a knock-on effect. Conversely, higher B-BBEE scores can be a competitive advantage. When faced with the choice of two suppliers, if all other factors are equal, the enterprise with the higher B-BBEE rating will inevitably be awarded the business.

A complex landscape

B-BBEE accreditation requires a certificate from a verification agency approved by the South African National Accreditation System (SANAS). However, B-BBEE requirements are often open to interpretation, and different agencies may apply the codes requirements in different ways.

Partnering for success

This is just one example of where the B-BBEE codes are open to interpretation. There is no right or wrong answer, until such time as a clarification is published. In addition, different criteria are applicable to different categories of business depending on their size and turnover. The scorecard itself is made up of five elements, of which skills development is a priority element that rewards 20 points. However, skills development is also interwoven into all of the other elements, with skills initiatives forming part of achieving these areas as well.

This is why the right skills development partner is crucial to help businesses navigate this often-complex landscape. An expert partner will ensure skills development is aligned with both B-BBEE requirements and business needs, to actively improve both. This leaves enterprises free to focus on their core business, while the training partner delivers upskilling programs that match skills development to business strategy.

In it together

Not only is skills development a huge driver of B-BBEE compliance, education needs to be at the heart of what B-BBEE is, because it is the key to improving South Africa’s economy. It is the duty of all businesses to teach people, to help them become economically active, to uplift them and give them the skills they need to become valuable, contributing members of the economy. B-BBEE should never be simply about ticking boxes as a short-term compliance exercise, because this does not create sustainable economic growth.

It is in the interest of all businesses to grow the economy, because increasing the market is the key to greater wealth, rather than simply trying to increase individual share in a small, stifled and struggling market. Businesses need to embrace the opportunity to create a win-win situation in the long-term. If every business works to upskill people in relevant skills, then we will all benefit.