11
SKILLS DEVELOPMENT MASTERCLASS WEBINAR
WELCOME… please make yourself at home
Copyright ©Alternative Prosperity Advisory and Products (Pty) Ltd, 2015
SKILLS DEVELOPMENT MASTERCLASS WEBINAR
10 September 2020
33
ALTERNATIVE PROSPERITY GROUP
Alternative Prosperity Group
90%
Alternative Prosperity Advisory (Kenya)
Focus:
ESG and Sustainability
Integrated Reporting
Head:
Cecilia Bjorn-Murai
82.5%
DNA Economics (Pty) Ltd
(South Africa)
Focus:
Economic Development Research and Policy
Head:
Matthew Sterne
100%
7%
31,02%
AP (JHB)(Division)
AP (CTN)(Division)
Six Capitals Advisory
(South Africa)
Focus:
Responsible Investment Advisory & Consumer Financial Education
Head:
Adrian Bertrand
Clients:Listed, Large and QSE
Companies & Non-Profits
Clients:Asset Owners and Investment
Managers
Clients:Government, DFI and Large
Companies
Clients:Kenyan Government, DFI and
Large Companies
Clients:Large Companies, Government,
QSE’s
Alternative Prosperity Advisory
(South Africa)
Focus:
B-BBEE and Transformation
Head:
Erosha Govender
AP Solve
(South Africa)
Focus:
Solutions across the scorecard in collaboration with:
Head:
Trevor Chandler
100%
• B-BBEE Scorecard & Gap Analysis• Transformation Strategy Development• Ownership Analysis & Structuring• Technical Advice & Opinions
44
Agenda
1. The role of Skills Development in Transformation
2. The Skills Scorecard and Key Considerations
3. A closer look Learnerships, Apprenticeship and Internships
4. The Impact of Changing Rules
5. What are your Skills Goals: Real Impact vs Compliance?
6. Impact Strategy Options that make Business Sense
7. YES Programme
8. Q&A
55
POLL
In your view, what impact has the B-BBEE scorecard made in bringing about transformation in SA?
1. Very little
2. Some impact, but not enough
3. Good progress
4. Big impact
66
1. The role of Skills Development in transformation
77
1.1 Intent of this element
THE SKILLS DEVELOPMENT ACT, 1998
The purpose of the Act“The Skills Development Act aims to expand the knowledge and competencies of the labour force in order to improve productivity and employment.”
The Main Aims of the Act are:• To improve the quality of life of workers, their prospects
of work and labour mobility;• To improve productivity in the workplace and the
competitiveness of employers;• To increase the levels of investment in education and
training in the labour market and to improve the return on that investment;
• To promote self-employment
B-BBEE Codes Objectives• Allow for meaningful participation
in economy• Change in skilled occupations• Access to economy• Sustainable development and
general prosperity
8
1.2 Skills Development trends
The key is to empower“Studies in the US, by San Francisco-based award-winning learning platform Degreed, reveal that up to 85 percent of employees do not feel like the training they get at work is preparing them for their next position. When customer behaviour changes, however, new developments reshape industries, or new competitors emerge, business strategies (and therefore people’s skills) need to adapt. And yet 77 percent of CEOs, according to PwC’s annual CEO survey, say a lack of key skills is a serious threat to their business growth prospects. These disconnects show that traditional approaches to education and training, and to quantifying and communicating people’s skills, are not responsive enough to keep up with the pace of change.”
- CHRO South Africa https://chro.co.za/article/the-key-is-to-empower
99
1.3 Importance of Skills Development in the scorecard
ElementGenric Large Enterprises
Ownership * 25
Management 9
Employment Equity 10
Skills Development* 20+5
Preferential Procurement* 27+2
Enterprise Development* 5+1
Supplier Development* 10+1
Socio-Economic Development 5
Consumer Ed./Econ. Development
TOTAL 111+9
* Priority Element: at least 40% of points must be achieved to avoid being discounted by 1 BEE Level
FSC(Asset Managers)
ICT Construction Property
25 25 27+4 30+3
8 13 12 9+2
8 10 8+2 13+4
20+3 20+5 29+5 19+3
20+4 25+2 18+3 24+2
5+2 15+1 5+1
10+2 10+2 9 10+1
3+2 12 5+1 2
2+1 5
105+11 130+10 108+15 117+16
10
1.3 Importance of Skills in the scorecard
• Priority element: Need to achieve 40% of points avoid a BEE level discount
• One of the elements where points can be made up in a shorter time span to achieve a higher compliance level
Contributor levelPoints Scored
Recognition levelAmended Codes
Level 1 Contributor >100 135%
Level 2 Contributor 95 - 100 125%
Level 3 Contributor 90 – 95 110%
Level 4 Contributor 80 – 90 100%
Level 5 Contributor 75 – 80 80%
Level 6 Contributor 70 – 75 60%
Level 7 Contributor 55 – 70 50%
Level 8 Contributor 40 – 55 10%
Non-Contributor <40 0%
11
1.3 Importance of Skills in the scorecard
• Critical link to Employment Equity:
– if the Employment Equity element has a low black representation, or a significantly skewed black representation, then it will be difficult to perform well within Sills element.
• Key question: Can we achieve scorecard points while also making an impact in terms of:
– Developing your employees to grow their careers
– Filling the skills gaps to improve Company productivity
1212
2. The Skills Scorecard and Key Considerations
1313
Description Weighting Target
Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for black people as a percentage of Leviable Amount.
6 3.5%
Skills Development Expenditure on Bursaries for Black Students at Higher Education Institutions
4 2.5%
Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for black employees with disabilities as a percentage of Leviable Amount
4 0.3%
Number of black people participating in Learnerships, Apprenticeships and Internships as a percentage of total employees.
6 5%
Bonus Points: Number of black people absorbed by the Measured and Industry Entity at the end of the Internship, Learnership and Apprenticeship
5 100%
TOTAL SCORE 20 + 5
2.1 Generic Skills Development Scorecard - Large
EAP targets applied
1414
2.1 Financial Sector CodeSKILLS DEVELOPMENT – AMENDED FSC Weighting Target
Spent on Black Senior and Exec Managers (Senior & Execs) 1 2.00%
Spent on Black Women Senior and Exec Managers (Senior & Execs) 0.5 1.00%
Spent on African Senior and Exec Managers (Senior & Execs) 0.5 1.73%
Spent on Black Middle Managers 1 3.00%
Spent on Black Women Middle Managers 0.5 1.50%
Spent on African Middle Managers 0.5 2.59%
Spent on Black Junior Managers 1 5.00%
Spent on Black Women Junior Managers 1 2.50%
Spent on African Junior Managers 1 4.32%
Spent on Black Non-management staff 2 8.00%
Spent on Black Non-management staff 1 4.00%
Spent on African Non-management staff 1 6.92%
Spent on Black Unemployed People 4 1.5%
Spent on Black Disabled People 1 0.30%
Learnerships: Black People in Learnerships (Employed or Unemployed) 4 5.00%
Bonus Points: Number of previously unemployed black people absorbed by the ME and industry at end of Learnership programme
3 100%
TOTAL SCORE 20 + 3
Banks and Life offices, Short Term Insurers, Stock Exchanges and Stock Exchange Members and Other Institutions
1515
2.1 ICT Sector Code
INFORMATION AND COMMUNICATION TECHNOLOGY (ICT): 20 + 5 points
DescriptionAMENDED ICT & Agri
Weighting Target
% Skills spend on Black People 8 6%
% Skills spend on Black disabled People 4 0.3%
% Learnerships 4 2.5%
% Unemployed Learnerships 4 2.5%
Bonus points: Absorption 5 100%
TOTAL SCORE 20 + 5
1616
2.1 Property Sector Code
SKILLS DEVELOPMENT – PROPERTY SECTOR Weighting Target
Skills Development Expenditure on Learning Programmes for black people as a percentage of leviable amount
8 5%
Skills Development Expenditure on Learning Programmes, for Black people with disabilities as a percentage of leviable amount
3 0.3%
Number of black employees participating in Learnerships, Apprenticeships and Internships as a percentage of total employees
4 2.5%
Number of black unemployed people participating in Learnerships, Apprenticeships or Internships as % of all employees
4 2.5%
Bonus Points: Number of Unemployed Black People absorbed by the ME and industry at end of Learnership, Apprenticeship or Internship programme
3 100%
TOTAL SCORE 19 + 3
1717
Description
AMENDED CONSTRUCTION
CONTRACTORS BEPs
Weighting Target Weighting Target
% Skills spend on BP (no ARG used) 7 2% 7 2%
Skills spend on African People (based on EAP) as % of total Skills spend on Black people using ARG
2 78.8% 2 78.8%
Skills spend on B Executive, SM and MM as % of total Skills spend on Black people using ARG
3 15% 3 15%
Skills spend on B JM as % of total Skills spend on Black people using ARG 1 10% 1 10%
Bursaries or Scholarships BP as % of total Skills spend on Black people using ARG 4 15% 4 15%
Number of Black people on Cat A/B/C or D programmes as % of all Employees using ARG 4 2.5% 4 2.5%
Number of Black employees registered as candidates with industry bodies as % of all such registered employees
4 60% 4 60%
Number of Black people with Disabilities registered on Cat A/B/C or D programmes as a % of all black office based learners on those programmes
1 5% 1 5%
Mentorships: Implementation of an approved Mentorship Program 3 Yes 3 Yes
Bonus points: Absorption 1 100% 1 100%
Bonus points: Black Employees registered as professionals with industry professional bodies as % of all Employees registered in measured period
4 60% 4 60%
TOTAL SCORE 29 + 5 34 + 5
2.1 Construction Sector Code
18
Salaries of employees on
Learnerships, Apprenticeships
& Internships
Accommodation, catering
& travel (capped at 15% of total
training) Admin costs i.e training
department operational costs
Scholarships & bursaries• Course fees
• Training materials
• Trainers
• Training facilities
Legitimate
Training
Costs
2.2 Legitimate training costs
School fees
Training manager/SDF costs (capped at 15% of total training)
19
2.3 Key Considerations
• 40% priority requirement:
– Require 8 out of 20 points to avoid a BEE level penalty
• Costs that are capped:
– Category F & G (informal workplace) training: Although capped at 25% of all training spend, but can still count 100% if below the 25% limit
– Training costs relating to accommodation, travel and catering is capped at 15%
– Claim for a Costs for SDF or training manager now limited to 15%
– FSC: Only cat. G capped at 15%
20
2.3 Key Considerations
• Learnerships, Apprenticeships & Internships:
– A trainee tracking tool to be developed to claim the bonus points.
– Salaries/stipends of Learnerships included for period of programme
– Head count may double-count into next financial period if overlap
• Leviable amount 4-month payment holiday as Covid-19 allowance
– This allowance does not affect Skills targets
– Companies must still base Skills targets on 12-month Leviable Amounts
21
2.3 Key Considerations
• Disabled People:
• Section 1 of the Employment Equity Act defines people with disabilities as follows:
– A person who has a long-term or recurring physical or mental impairment which substantially limits his or her prospects of entry into, or advancement in, employment.
– Key question: Does the company accommodate the individual in the workplace due to his/her disability?
• Pending changes to Sector Codes:
– All sector Codes are required to align to the Generic Code amendments of 2019
– Be aware of possible impact on your scorecard
22
Impact of EAP Targets
2.3 Key Considerations
TotalAfrican
male
Coloured
Male
Indian
Male
White /
Foreign
Male
African
Female
Coloured
Female
Indian
Female
White
/Foreign
Female
National EAP Target 100% 42.70% 5.20% 1.70% 5.10% 35.80% 4.40% 1.10% 4.00%
Adjusted EAP Target 100% 46.97% 5.72% 1.87% 39.38% 4.84% 1.21%
EAP Targets
If more than 50% of employees are based in one province, then the EAP targets of that province is applied
TotalAfrican
male
Coloured
Male
Indian
Male
White /
Foreign
Male
African
Female
Coloured
Female
Indian
Female
White
/Foreign
Female
Skills Spend on black people 3.50% 1.64% 0.20% 0.07% 1.38% 0.17% 0.042%
Bursaries for Black Students at
Higher Education Institutions2.50% 1.17% 0.14% 0.05% 0.98% 0.12% 0.03%
Number of black people on
learnerships, apprenticeships
and internships
5.00% 2.35% 0.29% 0.09% 1.97% 0.24% 0.06%
Skills Scorecard Targets
2323
2.3 Key Considerations
Absorption:• “means a measure of the Measured Entity’s ability to successfully secure a long-term contract of
employment for the Employee, Learner, Intern or Apprentice.”
• The following therefore applies:
– A person who does not have a current long-term contract of employment;
– Completing a Learnership, Apprenticeship or Internship via the Measured Entity; and
– Upon completion, secures a long-term contract of employment as defined with either the Measured Entity or any entity within the Industry.
• FSC: “if an employed learner is moved into another position and their previous employment is thereby rendered vacant to be occupied by someone, then this can be counted as absorption.
Long-term contract of employment:
• “A legal agreement between an individual and an entity that this individual would work for until his or her mandatory date of retirement”
24
2.3 Key Considerations
Application of the Absorption rules:
• Changed interpretation in terms of measurement against the target (as SANAS).
• Historically:
o 100% target based on 100% absorption of unemployed learnership who completed course
• Latest SANAS interpretation:
o 100% of the 5% headcount target for learnerships
o Target for 5 points = 100% x No. of Employees x 5% (target of Learnerships)
o Certain Sector Codes still have 2.5% target
2525
POLL
Do you believe the current Seta learnership programmes are effective in creating new job opportunities in South Africa?
1. Not at all
2. Limited impact
3. Significant impact
4. Very effective
2626
3. A Closer Look Learnerships, Apprenticeship and Internships
2727
3.1 Learnerships, Internships & Apprenticeships
Cat. Programme Narrative Description Delivery Mode Learning Site Learning Achievement
B Internships
Institution-based theoretical instruction as well as some practical learning with an employer or in a simulated work environment – formally assessed through the institution
Mixed mode delivery with institutional instruction as well as supervised learning in an appropriate workplace or simulated work environment
Institutions such as universities and colleges, schools, ABET providers and workplace
Theoretical knowledge and workplace experience with set requirements resulting in the achievement of a degree, diploma or certificate issued by an accredited or registered formal institution of learning(eg. Technical colleges, degrees with practical requirement)
CInternships / Articles
Recognised or registered structured experiential learning in the workplace that is required after the achievement of a qualification – formally assessed by a statutory occupational or professional body
Structured learning in the workplace with mentoring or coaching
Workplace
Occupational or professional knowledge and experience formally recognised through registration or licensing(eg. CA, CFA, Construction industry professional registration, where articles are required before registration)
DLearnerships or Apprentice-ships
Occupationally- directed instructional and work-based learning programme that requires a formal contract – formally assessed by an accredited body
Institutional instruction together with structured, supervised experiential learning in the workplace
Institution and workplace
Theoretical knowledge and workplace learning, resulting in the achievement of a South African Qualifications Authority registered qualification, a certificate or other similar occupational or professional qualification issued by an accredited or registered formal institution of learning(eg. NQF 2, 3, 4, etc. qualifications)
2828
3.2 National Qualification Framework (NQF)
2929
3.3 Learnerships
What is a learnership?• “A learnership is a work based learning programme that leads to an NQF registered qualification. Learnerships are directly related
to an occupation or field of work, for example, electrical engineering, hairdressing or project management. Learnerships are managed by Sector Education and Training Authorities (SETAs).”- SAQA
• “Learnership means a learning programme which—
- (i) consists of a structured learning component; the learnership includes practical work experience of a specified nature and duration;
- (ii) the learnership would lead to a qualification registered by the South African Qualifications Authority and related to anoccupation; and
- (iii) the intended learnership is registered with the Director-General in the prescribed manner.” – Skills Development Act
Two types of learnerships1. Employed Learnerships (18.1 learnership)
2. Unemployed Learnerships (18.2 learnership)
3030
3.3 Learnerships
What is important to know before you embark on the learnership journey?
The following must be in place:
• ALL learnerships should be registered with the SETA
• Only use accredited service providers
• Learnership agreement MUST be in place
Think about:
• Before you embark on the journey of Learnerships, you need to ask yourself WHY you are going the Learnership route
• Who will source the Learners? The company or Recruitment Agency?
• Are you going to apply to be the Lead and Host Employer or not
• Have you done research and understand how to claim for tax incentives and subsidies?
3131
3.3 Learnerships: Overview of tax allowances
Company tax - Section 12h
A Maximum of R 80 000 per learner per year if able bodied. (*Over 2 years)
A Maximum of R 120 000 per learner per year if disabled. (*Over 2 years)
PAYE ETI (Non taxable)
R1000 p/m PAYE deduction
*Over 2 years means:
▪ Year 1 – (50%) Annual allowance (Pro-rata payment)
▪ Year 2 – (50%) Completion allowance upon completion
▪ Corporate tax rate currently 28%
3232
3.4 Importance of tax allowances
Costs Before Tax Costs After Tax
Initiatives that Leverage ETI and 12H 10,000,000 610,975
Initiatives that don’t 10,000,000 7,200,000
Savings in after tax costs 92%
The above is presented for illustrative purposes based on an actual example
Only applies to learnerships that comply with the Receivers criteria
3333
3.4 PAYE TAX ALLOWANCES BURSARIES – STAFF FAMILY MEMBERS
Section 10(1) (Q)Relatives the definition
Amendments to 10(1)Q under discussion
‘relative’-
In this Act, unless the context otherwise indicates-
“relative” in relation to any person, means the spouse of such a person or
anybody related to him or his spouse within the third degree of consanguinity,
or any spouse of anybody so related, and for the purpose of determining
relationship between any child referred to in the definition of “child” in this
section and any other person, such child shall be deemed to be related to its
adoptive parent within the first degree of consanguinity;
Detail LimitsEmployee: Remuneration in previous year R600 000Learner: Grade R-12 R 20 000Learner: NQF 5-10 R 60 000Number of beneficiaries per taxpayer None
3434
3.4 Illustrated potential impact on employees
Example 1: Thabo and his wife Sally have three kids, two in high school and one enrolled atuniversity. Thabo earns R550 000 per year and Sally R300 000 per year respectively. Assume they have no other tax deductible expenses.
Reduces Leviable amount, targets and SDL
If staff family member is black, whether it counts must be considered on a case by case basis
Thabo Without Allowances With Allowances
Total Gross Salary R550 000 R550 000
Bursary andscholarship benefit
R0R100 000(2xR20 000 + 1xR60 000)
Taxable income R550 000 R450 000
Effective tax rate 24.0% 21.3%
Tax R131 808 R95 808
Potential saving R36 000
Sally Without Allowances WITH ALLOWANCES
Total Gross Salary R300 000 R300 000
Bursary and scholarship benefit
R0R100 000(2xR20 000 + 1xR60
000)
Taxable income R300 000 R200 000
Effective tax rate 16.1% 11.1%
Tax R48 265 R22 265
Potential saving R26 000
3535
4. The impact of changing rules
36
4.1 The impact of changing rules Negative
Issues of NotePositive
• Positive impact on this scorecard, as more
entities prefer funding school going students,
which was mainly limited to SED.
• Could result in potentially higher compliance
costs.
• Impact of salaries of learners would be less
in getting the full points as it is not applicable
to bursaries for higher education.
• Will add to scorecard points
• Will incentivise sponsors to pay stipends beyond just a
bursary
Stipends on Bursaries are Legitimate Training
Expenses
• Not capped previously and points will be
negatively impacted.
Spend on SDF or Training Manager,
accommodation, catering & travel
capped at 15%
Impact
of
Change
School fees now allowed to count under Skills
Development Split spend between Bursaries and all spend
37
4.1 The impact of changing rules strategyNegative
Issues of NotePositive
• Cat F & G now capped at 25% from 15% on all
spend which can assist to have to have internal
training making a bigger points contribution.
• 12 months contracts are no-longer eligible for
absorption given the new definition discussed
above.
• Re-enrolment on further studies no longer
eligible
• More effort will be required to ensure learners
can be employed permanently after
completion
• Previous interpretation made it easy to achieve
5 bonus points if all unemployed learners are
absorbed.
• Significantly more difficult now
Absorption target is 5% of head count
Impact
of
Change
Cat F & G 25% cap Absorption: Long term contract & further studies
38
4.2 Impact on other sectors
Absorption definition change
Raised Limit on informal training from 15% to 25%
Impact on sector codes reverting to ACOGP for measurement principles:
• Agri: absorption defined (p.65)
• Construction: absorption defined (p.443)
• Forestry: absorption defined (p.106)
• FSC: absorption defined (p.323)
• ICT: not defined (refer ACOGP)
• MAC: absorption defined (p.67)
• Property: absorption defined (p.56)
• Tourism: absorption defined (p.103)
• Transport: n/a"
Impact on sector codes reverting to ACOGP for measurement principles:
• Agri is silent (7.4.3 of Code 300 refers to principles in ACOGP)
• MAC is silent (refer ACOGP)
• Property is silent (refer ACOGP)
• Construction explicitly different (35%)
• Forestry explicitly states 15%
• FSC explicitly states 15%
• ICT explicitly states 15%
• Tourism explicitly states 20%
39
4.2 impact on other sectors
Impact on sector codes reverting to ACOGP for measurement principles:
• Agri (7.4.3 of Code 300 refers to principles in ACOGP)
• Construction is silent (refer to ACOGP)
• MAC is silent (refer ACOGP)
• Property is silent (refer ACOGP)
• Forestry explicitly only Accom, Catering & Travel
• FSC explicitly only Accom, Catering & Travel
• ICT explicitly only Accom, Catering & Travel
• Tourism explicitly only Accom, Catering & Travel
Amended Code 300: par 5.4
Added training manager , training facilitator ,
accommodation, catering & travel "and the cost to the M.E
of employing a Skills Development facilitator or a
training manager” to the 15% limitation.
4040
5. What are your Skills goals: Real Impact vs Scorecard Compliance
41
5.1 Scorecard Compliance vs Real Impact
Description More Compliance Focus More Impact Focus
Short courses –
accredited training
• Achieve Rand value targets
• Achieve optimal points with
minimal spend
• Less planning to align training
spend to Skills gaps within
workforce
• Achieve Rand value targets, but all training
is motivated by a clearly identified skills
needs
• No spend is taken on if it will not make a
difference to the wellbeing of the
individual and the Company
• Can we shift from a Compliance focus towards a more Impact focus while still getting our scorecard points?
• Lets not get fixated on scorecard points.
42
5.1 Real Impact vs Scorecard Compliance
Description More Compliance Focus More Impact Focus
Unemployed
Learnerships
• Easier route of offsite hosting with
company and not significantly
involved in selection process.
• Programmes of unemployed
learners not matched to
Company requirements – more
focused on spending the Rand
value
• Key focus is not on absorption
• Attempt to host all or some unemployed
learners at the Company
• Close involvement with screening and
selection process
• Programmes selected to alignto skills needs
of Company where possible
• Objective is to absorb unemployed
learnerships either at the Company or assist
with employment elsewhere
Bursaries • Provided as a last minute option to
achieve points shortage
• Planned spend to fill future skills gap with
longer term objective to employ
candidates
• Clear bursary policy and selection process
4343
POLL
How would you describe your company’s Skills Development approach?
1. Mostly scorecard points focussed
2. Mostly impact focussed
3. Combination of the two
4444
6. Impact Strategy Options that make Business Sense
45
6.1 Impact strategy options
Starting point:
• Identify skills gaps within company: What do we have & what do we need within 1 yr, 2-3 yrs, 3yrs+. This should be detailed exercise across divisions, and before new year starts.
• Match the Skills budget to required training as well as personal development plans of employees – all training should have an objective in mind.
• What is the shared value that can be created to benefit both Company and employees.
1. Unemployed Learnerships
• Can be hosted internally or externally – internal option could have bigger impact.
• Usually cat. D learnerships registered via Seta, or cat. B technical type qualifications
• Be involved with selection process in order to align to skills needs as well as select motivated learners.
• Objective should be to absorb majority of unemployed candidates and earmark employed learners for higher management levels
Shared value is a business strategy designed to solve social issues profitably.
46
6.1 Impact strategy options
• In terms of compliance points:
Current year
Current year
Next year
Description Weighting Target
Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for black people as a percentage of Leviable Amount.
6 3.5%
Skills Development Expenditure on Bursaries for Black Students at Higher Education Institutions
4 2.5%
Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for black employees with disabilities as a percentage of Leviable Amount
4 0.3%
Number of black people participating in Learnerships, Apprenticeships and internships as a percentage of total employees.
6 5%
Bonus Points: Number of black people absorbed by the Measured and Industry Entity at the end of the Internship, Learnership and Apprenticeship
5 100%
TOTAL SCORE 20 + 5
Current year
47
6.1 Impact strategy options
2. Bursaries for Black Students at Higher Education Institutions
• Identify high potential candidates at 2nd & final year studies.
• Try to match selection of candidates with company culture with objective of future permanent employment.
• Incentivise through bursary as well as future career with the company.
• Where possible convert completed studies into a professional learnerships – especially in Financial & Construction sectors.
3. Bursaries at school level with longer-term view
• Objective: Provide longer term support through school, varsity/college and then employment.
• Require number of years commitment, but will make real impact.
• Can allocate to either Skills or SED.
48
6.1 Impact strategy options
4. Disabled training
• 1st option: Develop disabled employees internally if you have disabled people.
o Internal awareness programme can assist to have more people declare their disabilities.
o In this way a better workplace can be created for individuals who did not want to declare previously.
• 2nd option: Use unemployed learnerships to enrol disabled candidates who will be regarded as employees during the 12 month programme.
o Objective should be to absorb these learners, and not just yearly solution.
o Challenge remains around absorption of disabled people – very low absorption rates.
49
6.1 Impact strategy options
5. Align Skills spend with Leadership succession planning
• Cases with a shortage of black representation at Senior & Executive Management
• Identify high potential candidates at junior or middle management levels
• Plot a career path & personal development plan which is supported by focussed skills programmes (eg. MDP, MBA, etc.)
• Serves as motivation for candidates (“I have a future with this company”) and helps to retain high potential employees
• Look for opportunities to claim for cat. B or C learnership programmes
o E.g. degrees, diplomas with a practical workplace requirement, or profession al registrations
50
6.1 Impact strategy options
6. Establish an inhouse training academy
• Two options:
1. Establish new academy
– Accreditation is long and onerous
– Can use this as part of ESD strategy
– Provide entrepreneurial opportunities for existing staff
2. Take over existing accredited academy
– Buy existing capacity, expertise and accreditations
– Easier route
– Does not have to be 100% ownership – can be partnership.
51
6.1 Impact strategy options
6. Establish an inhouse training academy
• Advantages:
• All operational costs count as valid training spend
• Control content of programmes
• Opportunity to convert inhouse programmes to certified
• Use more cost effective internal expertise
• Disadvantages:
• Initial cost high
• Significant resources & effort required to maintain
52
6.1 Impact strategy options
7. Covid strategy: Online solutions
• Find suitable online partner to:
• Convert existing inhouse programmes
• Provide new courses
• Challenge: Can we successfully run learnership programmes online with limited access to workplace
• Important: Employees need to buy-in and not just register because they have to
• Can result in significant costs saving which can then be applied to other areas required
5353
7. YES INITIATIVE
54
A Large entity needs to achieve at least 40% of the priority elements’ points.
Why do we have YES?
• To make provision for unemployed young people who need to be trained and employed by corporates and SMMEs.
• This can occur by way of learnership programmes, bursaries and accredited or non-accredited training courses for a 12-month period.
• Company benefit: Opportunity to move up• 1 B-BBEE level• 1 B-BBEE level + 3 bonus points• 2 B-BBEE levels up
7.1 Youth employment service (YES)
55
• ME to achieve at least a level 8 before YES BBBEE recognition is rewarded• Measured entities maintain or improve their B-BBEE status level from the year before. • Youth must be employed on a 12-month, fixed term employment contract.• Absorption can only occur after the 12-month period.• Initiatives for YES are separate from learnerships, internships and apprenticeships – no double
counting.• Sponsored host placements are a part of the YES programme. Corporates who meet their YES
target can choose to place the youth in their own business or at a host SMME through a sponsored host placement, at no cost to the host.
7.1 Youth employment service (YES)
56
7.2 YES: Calculate targets
The targets for YES are calculated as follows – the highest of:
• 1.5% of headcount; OR
• 1.5% of average NPAT in the immediate preceding 3 years / R55000 (to convert to headcount); OR
• Target as per the table below:
TOTAL REVENUE BAND (RM) MINIMUM BLACK YOUTH JOBS
50 – 75 6
75 – 99 7
100 – 149 8
150 – 199 9
200 – 249 10
250 – 299 11
300 – 349 12
350 – 399 13
400 – 449 14
450 – 500 + 15
BEE Recognition
Achieve YES target and 2.5% absorption 1 Level up
Achieve 1.5xYES target and 5% absorption1 Level + 3
bonus points
Achieve double YES target and 5% absorption 2 Levels up
5757
7.3 YES: Practical example
(1) 1.5% of headcount 96 employees 1.44
(2) 1.5% x NPAT / R55 000 1 302 434.18 23.68
average NPAT x 1.5%:
2018 2017 2016 3year ave
127 084 000.00 51 322 000.00 82 080 836.00 86 828 945.33
(3) Target as per table:
TOTAL REVENUE BAND (RM) MINIMUM BLACK YOUTH JOBS
50 – 75 6
75 – 99 7
100 – 149 8
150 – 199 9
200 – 249 10
250 – 299 11
300 – 349 12
350 – 399 13
400 – 449 14
450 – 500+ 15
15.00 3 836 294 000.00
TARGET CALCULATION | Higher of:24 Learners required to achieve YES target
60
6.1 Practical example: Learnership route
• No of employees: 50
• Leviable amount: R15m per year
• Budget: <R500,000
Description Weighting Target
Skills Development spend on Black People as a % of leviable amount
6 3.5%
Bursaries for Black Students at Higher Education Institutions (and Basic Education) as % of Leviable amount
4 2.5%
Skills Development spend on Black Disabled Employees as % of Leviable amount
4 0.3%
Black Learnerships participating in Learnerships, Apprenticeships or Internships as % of all employees 6 5%
Bonus Points: Number of Black People absorbed by the ME and industry at end of Learnership programme
5 100%
TOTAL SCORE 20 + 5
R900k spend required
2.5 Learnerships required
R375k spend required
R45k spend required
To achieve full points
61
6.1 Practical example: Learnership route
• No of employees: 50
• Leviable amount: R15m per year
• Budget: <R500,000
Description Weighting Target Actual Spend Points
Skills Development spend on Black People as a % of leviable amount
6 3.5%(R525k)
R80k x 4 = R320k(Achieve 2.1%)
3.16
Bursaries for Black Students at Higher Education Institutions (and Basic Education) as % of Leviable amount
4 2.5%
(R375k)
R100k bursaries(AM, AF)
0.92
Skills Development spend on Black Disabled Employees as % of Leviable amount
4 0.3%(R45k)
R80k1x disabled
learner4.00
Black Learnerships participating in Learnerships, Apprenticeships or Internships as % of all employees 6
5%(2.5 Learners)
4x unemployed learners
(2xAM, 2xAF)5.18
Bonus Points: Number of Black People absorbed by the ME and industry at end of Learnership programme
5 100%Absorption in following year
TOTAL SCORE 20 + 5 R420k 13.26
1st Objective: Meet priority requirement (8 points)2nd Objective: Optimise pointsOption: Enroll 4 learnerships
62
EAP Targets
6.1 Practical example
TotalAfrican
male
Coloured
Male
Indian
Male
White /
Foreign
Male
African
Female
Coloured
Female
Indian
Female
White
/Foreign
Female
Skills Spend on black people 3.50% 1.64% 0.20% 0.07% 1.38% 0.17% 0.042%
Bursaries for Black Students at
Higher Education Institutions2.50% 1.17% 0.14% 0.05% 0.98% 0.12% 0.03%
Number of black people on
learnerships, apprenticeships
and internships
5.00% 2.35% 0.29% 0.09% 1.97% 0.24% 0.06%
Skills Scorecard Targets
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6.1 Practical example
Description Weighting Target Spend Points
Skills Development spend on Black People as a % of leviable amount
6 3.5% R80k x 4 = R320k(Achieve 2.1%)
3.16
TotalAfrican
male
Coloured
Male
Indian
Male
White /
Foreign
Male
African
Female
Coloured
Female
Indian
Female
White
/Foreign
Female
Skills Spend on black people 2.13% 1.00% 0.12% 0.04% 0.84% 0.10% 0.026%
Skills Spend on black people 320,000 150,319 18,306 5,985 126,029 15,490 3,872
Actual spend 160,000 160,000
Points achieved 3.16 1.72 - - 1.44 - -
Skills Scorecard Targets
64
Practical example
Description Weighting Target Actual Spend Points
Black Learnerships participating in Learnerships, Apprenticeships or Internships as % of all employees 6
5%(2.5 Learners)
4x unemployed learners
(2xAM, 2xAF)5.18
TotalAfrican
male
Coloured
Male
Indian
Male
White /
Foreign
Male
African
Female
Coloured
Female
Indian
Female
White
/Foreign
Female
Number of black people on
learnerships, apprenticeships
and internships
5.00% 2.35% 0.29% 0.09% 1.97% 0.24% 0.06%
Headcount required 2.5 1.17 0.14 0.05 - 0.98 0.12 0.03 -
Actual headcount 2 2
Points achieved 5.18 2.82 - - 2.36 - -
65
Practical example
Description Weighting Target Spend Points
Bursaries for Black Students at Higher Education Institutions (and Basic Education) as % of Leviable amount
4 2.5%R100k bursary
(Achieve 0.67%)0.92
TotalAfrican
male
Coloured
Male
Indian
Male
White /
Foreign
Male
African
Female
Coloured
Female
Indian
Female
White
/Foreign
Female
Bursaries for Black Students at
Higher Education Institutions0.67% 0.31% 0.04% 0.01% 0.26% 0.03% 0.01%
Skills Spend on black people 100,000 46,975 5,721 1,870 39,384 4,840 1,210
Actual spend 50,000 50,000
Points achieved 0.92 0.50 - - 0.42 - -
66
6.1 Practical example: Learnership route
• No of employees: 50
• Leviable amount: R15m per year
• Budget: <R500,000
Description Weighting Target Actual Spend Points
Skills Development spend on Black People as a % of leviable amount
6 3.5%(R525k)
R80k x 4 = R320k(Achieve 2.1%)
3.16
Bursaries for Black Students at Higher Education Institutions (and Basic Education) as % of Leviable amount
4 2.5%
(R375k)
R100k bursaries(AM, AF)
0.92
Skills Development spend on Black Disabled Employees as % of Leviable amount
4 0.3%(R45k)
R80k1x disabled
learner4.00
Black Learnerships participating in Learnerships, Apprenticeships or Internships as % of all employees 6
5%(2.5 Learners)
4x unemployed learners
(2xAM, 2xAF)5.18
Bonus Points: Number of Black People absorbed by the ME and industry at end of Learnership programme
5 100%Absorption in following year
TOTAL SCORE 20 + 5 R420k 13.26
1st Objective: Meet priority requirement (8 points)2nd Objective: Optimise pointsOption: Enroll 4 learnerships