B-BBEE scorecard training points

PAPER PRESENTED AT SAPICS 37TH ANNUAL CONFERENCE AND EXHIBITION 31 MAY – 2 JUNE 2015, SUN CITY, SOUTH AFRICA © SAPICS 2015, www.sapics.org.za ISBN 978-0-620-64684-0 PAGE 1

I want it all - gimme the B-BBEE Scorecard training points

CHARLES DEY, THOLSIA NAIDOO, DAVE WALLS

Introduction

Purpose

This paper is a high level discussion on the training landscape in South Africa and the legislation that

is driving skills development decision making.

Content

The National Development Plan

National Skills Accord

Understanding Learnerships

Harvesting our youthful demographic dividend

Revised B-BBEE Codes and their impact on Skills Development

Revised B-BBEE Generic Scorecard – Skills Development Pillar

Pillar Discounting

Skills Development Strategies

Skills Development Tactics

The National Development Plan

“A strong educational system spanning early childhood development, primary, secondary, tertiary

and further education is crucial for addressing poverty and inequality.”

Post school sector needs to meet a wide range of education and training needs of people over 18.

Must play a significant role in producing the skills and knowledge needed to drive South Africa’s

economic and social development. An inclusive system is required to provide opportunities for social

mobility while strengthening equity, social justice and democracy.

Proposed plans and strategies:

I WANT IT ALL - GIMME THE B-BBEE SCORECARD TRAINING POINTS


Research on critical issues affecting long-term development.

Expanding higher education sector- can contribute to rising incomes, higher productivity and

the shift to a more knowledge-intensive economy.

Universities - centres of excellence at the cutting edge of technology.

Higher Education institutions - improve the link between innovation and business

requirements.

Goals:

Further & higher education and training that enables people to fulfil their potential

Simultaneous focus on Research and Development and on the calibre of teaching to improve

quality of higher education

Long-term perspective on developing the skills needed to solve the technical and managerial

skills shortage in government through career path planning, mentoring and closer

partnerships with universities and schools of management

Increase enrolment at universities by at least 70% by 2030, to about 1.62 million from 950

000 in 2010

Increase number of students eligible to study towards maths and science based degrees to

450 000 by 2030

Increase number of PhD qualified staff in the HE sector from the current 34% to over 75% by

2030

Produce more than 100 doctoral graduates per million by 2030

Support the development of university programmes focusing on college lecturers: fund

research on the vocational education sector

Implement a programme to develop the next generation of South African HE academics

Expand the infrastructure to allow universities to reach more learners via distance education

Provide more support for universities to help students from disadvantaged backgrounds.

(National Planning Commission, 2011)



The NDP aims to create 11 million jobs in the next 20 years, which mirrors the employment goals

and targets of the New Growth Path and the Education and Training Priorities of the NDP.

National Skills Accord

Signed on 13 July 2011 by the Minister of Higher Education and Training and representatives from

Organised Business, Organised Labour and Communities. Aim of the accord is to form a partnership

with these parties to identify common areas in training and skills development that could be

committed to and implemented in order to achieve the broad goals of the New Grow Path.

State-own enterprises (SOE) committed to achieve certain targets in areas where there was shortage

of skills, i.e. artisans. Also encourages employers to increase their training expenditure to between

3% and 5% of payroll to allow for the creation of skills pools in South Africa.

Parties have identified eight key areas of commitments:

Expand the level of training using existing facilities more fully

Make internship and placement opportunities available within workplaces

Set guidelines of ratios of trainees: artisans as well as across the technical vocations, in order

to improve the level of training

Improve the funding of training and the use of funds available for training and incentives on

companies to train

Set annual targets for training in state-owned enterprises

Improve SETA governance and financial management as well as stakeholder involvement

Align training to the new growth path and improve Sector Skills plans

Improve the role and performance of FET Colleges

Understanding Learnerships

Learnership – A contract between a learner, employer and a training provider for a specified period

leading to acquisition of National Qualifications and/or credits towards National Qualifications

Learnerships are central to this integrated skills development system.



Learnership qualifications go beyond those traditionally offered through formal education or work-

related training systems in a number of ways.

Significantly -

They include a wide range of clusters of learning, which, are intended to provide portability

and potential employability

They are also available to a wider range of learners than previously addressed, including the

employed, or unemployed. In addition, access is not determined by prior education or

training, and entry is available at a wide range of levels, depending on each learner’s

competence

A learnership is composed of both structured learning and structured work experience, which are

designed to complement each other in an integrated structure. It is critical that theory and practice

are combined – so that there are practical applications within the structured learning, and

theoretical reflections within work experience: each must take place within the other.

Harvesting our youthful demographic dividend

Senior South African economist, Cees Bruggemans poses provocative questions in his article “SA

Radical Prospects: Limitations & Opportunities”:

“It can be said, in all earnestness, that the modern South African economy has never been given a

fair chance to show what it is truly capable of, in both the productive and the distributive sense.

Should we in the future make our own luck through foreign trade by participating more aggressively

in global value chains? Should we in the future be focusing mainly on ‘beneficiating’ our human

capital and through it seek richer and more widespread human development? The central theme of

South Africa’s development would then become the harvesting of our youthful demographic

dividend, so far left completely dormant.”

The answers to these questions bring exciting opportunities to business. Since South Africa’s logistics

costs hover at around 12 - 13% of its GDP, these issues are of significant importance to any logistics



and transport organisation. Add to this the fact that, of the 21 million young people (under 35 years)

in South Africa, 18.3 million of them are without jobs*.

Both the sticks and the carrots exist to reduce the high proportion of logistics costs and youth

unemployment, given that these result from the same cause – lack of skills.

As of 1 May 2015, companies need to DOUBLE their spend on training from 3 to 6% of payroll in

order to meet the required 8 out of 118 points on the revised B-BBEE scorecard. This can be most

cost effectively achieved by uplifting the skills of those same unemployed youth and, by spending

the same Rands on the right people in the right programmes, 25 B-BBEE scorecard points can be

achieved.**

There have never been more learnerships in the field of logistics and transport than those which

have been registered to date: it is the sponsorship of young AICs (Africans, Indians and Coloureds -

especially women and handicapped individuals) on learnerships which earn the highest B-BBBEE

scorecard points.

It is also learnerships which attract the highest levels of both SETA funding and tax incentives. In

effect they are cost neutral, thus releasing funding to upskill existing staff who may not necessarily

be AICs.

“It’s all very well implementing learnerships by bringing in unemployed youth” you say, “but how

does this benefit my business?”

From the 2014 Barloworld Logistics supplychainforesight report, “Respondents ranked the lack of

relevant skills and talent as their number one strategic business constraint.” This is emphasised

throughout this and similar reports. Other studies have proved that 85% of learnerships graduates

are retained in the businesses. Conclusion? Learnerships provide businesses with the scarce and

critical skills needed for sustainability.

Exciting times ahead!

* “Youth in a state of emergency” Andile Lungisa, former ANC Youth League deputy president,

Sunday Independent June 15 2014

** Government gazette 36928 dated 11th October 2013

Revised B-BBEE Codes and their impact on Skills Development

For maximum transformation points, the training expenditure target in the Revised Broad-Based

Black Economic Empowerment (B-BBEE) Generic scorecard is 6% of the leviable amount based on

the company’s payroll. This is a 100% increase on the previous Generic target of 3%.

It is possible to obtain up to 25 points within the Skills Development pillar of the Generic scorecard.

Revised B-BBEE Generic Scorecard – Skills Development Pillar

Indicator Weighting Target Skills Development Expenditure on learning programmes specified in the learning programme matrix for black employees as a percentage of leviable amount

8 6%



Black disabled employees 4 0.30%

Number of black people participating in a learnership, internship or apprenticeship as a percentage of all employees

4 2.5%

Number of unemployed black people participating in training specified in the learning programmes matrix as a percentage of number of employees

4 2.5%

BONUS POINTS: Number of black people absorbed by the Measured Entity and Industry at the end of the learnership programme

5 100%

Pillar Discounting

Although there are five categories in the Revised B-BBEE Codes, there are three priority elements

within the codes and the skills development pillar is one of them. If therefore the sub-minima target

is not met, then the business entity will automatically fall by one Contributor status level, irrelevant

of what is achieved in the other parts of the scorecard.

The sub-minima is based on 40% of the total points (excluding Bonuses) and so the business entity

will need to make at least 20 x 40% = 8 points in the skills development pillar to avoid being

discounted a level.

Skills Development Options

If the impact of not meeting the sub-minima is an issue for the business entity, then it needs to

identify a strategy that will ensure that this threshold is achieved this year and every year.

The menu of learning interventions is broadly broken into two major categories, accredited training

and non-accredited training. The maximum threshold for Non-Accredited Internal training is 15% of

the total training expenditure. The balance of the training expenditure must be provided by

Accredited Providers offering accredited training programmes.

The bouquet of training can be categorised as follows:

International Qualifications (SAQA Aligned)

Local RSA Qualifications (CHE or SAQA Accredited)

Apprenticeships

Learnerships / Skills Programmes

Work Integrated Learning (WIL)

Internships

Work Experience

Graduate Work Experience

Regulated / Mandatory

Skills Development Strategies

Spend the necessary minimum training expenditure amount and meet the sub-minima

threshold



Spend the necessary amount to obtain all the Skills Development points in order to get the

highest contributor status possible

Focus the training only on what gets funded from the SETA’s so as alleviate the amount

actually spent

Spend the relevant amount in order to retain the B-BBEE contributor status level required by

the business. (this is a moving target as it is only one of the five elements that makes up this

status)

Spend the entire accredited training budget on Learnerships as this ticks the most boxes

Spend the entire accredited training budget on Tertiary institutions

Find a balanced accredited training budget between Learnerships and Tertiary Institutions

Conclusion

The above information is intended to encourage conversation regarding options and opportunity in

the South African training landscape where it interfaces with the workplace.

It is by no means exhaustive but it is hoped that it will provide decision makers with some basic tools

with which to shape the training and development strategies.



SPEAKER PROFILES

An education, training and development practitioner who pioneered e-

Learning in the international logistics space, Charles Dey is widely known as a

controversial and amusing trainer and public speaker.

He led the teams who were responsible for building and subsequently revising

the qualification structure of South Africa’s forwarding and clearing industry.

He facilitated the validation of these qualifications for the award of the

international qualification, the FIATA Diploma in International Freight

Forwarding.

Charles applies his qualifications, experience and deep passion to designing

accredited human capital development solutions in supply chain management in general and

international logistics in particular.

Contact details

Email address [email protected]

Website http://www.bpl.za.com/asp/index.asp

Telephone +27115706701

Tholsia Naidoo harnesses her academic achievements in strategic

involvement in private training initiatives throughout South Africa. She is a

leading figure on a number of education, training and development bodies.

Since 2001 Tholsia and her husband Mike have been building a formidable

academic and vocational training facility, the Institute for Quality (IQ), which

holds accreditation from ten Sector Education Training Authorities, the

Council for Higher Education and Umalusi. IQ is responsible for the provision

of 52 different Learnerships.

She is passionate about her community and has been recognised for her work

in a crisis centre for abused woman and children.

Contact details Email address [email protected]

Website http://www.iqetd.co.za/web/




Dave Walls joined the International Logistics industry in 1983 and has worked

with some of the majors in this environment where he was an influence in

both the Learning & Development department running extensive Learnerships

within the business and also participating on the Transformation committee

to help manage the B-BBEE Scorecard. He currently sits on the Transport

Sector Training Authority (TETA) Chamber Committee representing industry

and has played an active role in the industry as a key player for the South

African Association of Freight Forwarders (SAAFF). He is not a stranger to the

SAPICS conference and was a co-presenter in 2014.

Contact details

Email address [email protected]

Website http://www.iqetd.co.za/web/
