Enhancing BBBEE Compliance
Statutory Training Contribution
The 6% compliance target for skills development spend on black people in general includes external training expenditure for unemployed black people.
A company needs to develop a trainee tracking tool in order to score the bonus points for Skills Development.
The Revised Codes of Good Practice have elevated Skills Development to the status of a priority element and have set the achievement of a sub-minimum of 40% of the targets set out in the Revised BEE Scorecard.
Should a company not achieve the sub-minimum target, its BEE status level will be discounted by one level down.
Preferential Procurement Contribution
The South African Department of Trade and Industry defines preferential procurement as “the procurement of goods and services from Empowering Suppliers as a percentage of total procurement”.
In short, preferential procurement is the promotion of procurement from businesses with a healthy BBBEE scorecard, small and micro businesses, and to bring previously disadvantaged individuals or businesses into the mainstream economy.
The first place to start is with your supply chain team to assess what you buy and from whom. Conduct analysis to determine where you spend 80% of your budget to determine your “as is” preferential procurement score
SMMEs can be the backbones of any economy and the main driver of economic growth. Research by Global Entrepreneurship Monitor shows that small businesses are significant contributors to job creation, creating more than 50 percent of all employment opportunities in South Africa. Currently, the SMME sector contributes more than 45 percent of the country’s gross domestic product. SMMEs have the potential to create and expand employment opportunities, develop entrepreneurial skills and enhance market opportunities.
Management and Reporting
- Pillar of reporting and the challenge to manage
Ownership: Identification of a suitable BBBEE partner; Retention of the BBBEE partner within the equity structure.
- Management control: Employment and retention of board members and top management
- Employment equity: Employment and retention of management
- Skills development: Prioritisation of accredited skills training for employees
- Preferential procurement: Receipt of BBBEE certificates from Suppliers; Addressing the issue of Localisation.
- Enterprise development and socio-economic development: Alignment of the initiatives against the company’s strategic direction as well as a commitment of funds in this regard
Mentoring is a relationship between two parties, who are not necessarily connected in a line management structure, in which a mentor guides a candidate through a period of change and towards an agreed objective. The mentorship programme is encouraged during the skills development process in order to provide the necessary support and guidance to the learner throughout the process.