B-BBEE

B-BBEE: Is Your Strategy Transactional or Transformational?

by Kapina Tjale | Jul 26, 2019 | Blog, News

by Anusha Mariemuthu

Are you shifting paradigms, changing behaviour, and making valuable long-term strategic contributions to the economy or are you just transacting on your scorecard on an operational level to achieve the required points in your organisation?

Is your organisation a good corporate citizen who continuously contributes towards South Africa’s progress as a country, economically and socially through empowering communities, small businesses, individuals and creating jobs?

Companies must understand that economic transformation is a national economic priority, and that B-BBEE (Broad-based Black Economic Empowerment) is every South African corporates’ responsibility.

A company’s transformation initiatives at a high level needs to focus on the below broad areas

Ownership : Ensuring that equity are made available to black communities and assisting them access financing/ funding to fund their equity.
Skills Development : Empowerment through education and creating opportunities for previously disadvantaged employees and youth, through accelerated skills development programmes (learnerships, apprenticeships, internships, bursaries and employment opportunities).
Employment Equity: Employees must be afforded the opportunity to advance their knowledge, skills and abilities in order to be promoted. This process should be linked back to Talent Management and Succession Planning and not tokenism. Employment Equity and your employees should be viewed an integral element of a company’s overall transformation strategy for the removal of the economic legacies of structural inequality.
Procurement : Procuring goods and services from South African black-owned enterprises, who are EME’s and QSEs while working with them to develop their businesses.
Responsible sourcing: According to the International Chamber of Commerce is “a voluntary commitment by companies to take into account social and environmental considerations when managing their relationships with suppliers”.
Small business Development and Communities : Investing in communities, in black entrepreneurs and in projects that support small business growth and development thereby stimulating economic growth

So how do we start doing this?

Before you even begin this journey, chose a good change management model , like ADKAR to enable your business transformation to take place.

The first step is to establish a B-BBEE related Organisational Transformation Strategy, that is aligned to your business Strategy. Talk to business through their Profit and Loss (P and L) and show them how transformation makes good business sense. Below is a high level view of how this journey in your business should look like. Create a road map for a successful Transformation journey , by showing people how to make this transition as a company together.

Shared Vision: Within your company, co-create and establish a Shared Vision for an organisational transformation related to B-BBEE.
Establish leadership over the process and ensure ownership, responsibility and accountability is in place so that your people can make this happen.
Knowledge is powerful and an enabler: Create capacity in the Leadership and support functions by sharing information and ensuring that they acquire the required level of knowledge and skills to be able to implement the organisational transformation vision (Use Change management programmes, like ADKAR to achieve this).
Ensure Ownership is shared by key individuals in strategic positions across the business by ensuring that they have B-BBEE related Key Performance Indicators (KPIs) and that these individuals cascade responsibility into their respective areas in order to ensure accountability can be held.
Good Governance: Align all related operational governance which will empower and enable all related business managers to support the implement the organisational transformation process. Create an effective monitoring, measurement and reporting structure to ensure accurate visibility is achieved and maintained allowing for effective performance management over the process, show progress on the B-BBEE objectives and to manage the associated risk.
Ensure the transformed organisation is maintained through periodic assessments of the levels of compliance with the Compliance Framework and the progress of the company’s B-BBEE Score.

Lastly, keep your people informed (through townhalls, performance reviews, newsletters), get feedback and tell them how this journey is proceeding. This will keep them engaged and energised to make it a success. Make B-BBEE Transformation part of your company DNA.

More importantly, keep the passion.

Anusha Mariemuthu is a passionate, seasoned Transformation and Human Resources professional with a myriad of experience that spans across all pillars of the scorecard. For more information on our B-BBEE consultancy services, contact us here.

Managing By Project with Davis & Dean

by Kapina Tjale | Aug 24, 2018 | Blog, News

Practical project management experience is difficult to gain in a classroom. Ideally, we would like our project management teams to have prior experience however, this is not always possible.

Davis & Dean, project management training experts, have developed Managing By Project (MBP), an extensive workshop where students are able to navigate through online project management scenarios, combining both the science and art of project management.

i-Fundi has partnered with Davis & Dean to give students a holistic training experience when completing their Project Management NQF 5 qualification. The three-day workshop is built into the 12 month programme where students take the concepts and principles taught and put them into practice.

MBP is a simulation of actual management processes programmed in artificial intelligence allowing participants a complete, realistic experience. Projects unfold differently based on each learner’s decisions upon randomised situations. Learners have a realistic experience applying the principles of project management.

The MBP workshop achieves the following outcomes:

Core Skills Integration: –
Integration of leading, managing and team work as learnable soft skills that each student develops.
- Leadership: Building strong relationship with relevant stakeholders to later leverage off;
- Management: Planning, organising and controlling project approach with a time-phased and task-oriented approach;
- Teamwork: Introduction to science of teamwork and develop teamwork skills for a high-performance team.
Project Fundamentals: –
Fundamental project planning tools.
- Project definition: defining the scope of work;
- Task List: tasks to achieve project objectives;
- Work breakdown structure: List of tasks are grouped or ordered;
- PERT: Relationships between the tasks are defined and the critical path found;
- Gantt: project timeline developed from PERT diagram, start to finish.
Analytical Techniques: –
Applying analytical techniques during the iterative process of planning, executing and monitoring and control to overcome project deficits and take advantage of opportunities.
Stakeholder Plan:
Identifying stakeholders and their interest and influence to develop a stakeholder plan which then is implemented through workplace simulation.
Communication Plan:
Developed alongside stakeholder plan, followed through project implementation.
Human Resource Planning: –
Ensure optimal usage of available resources through a levelling exercise.
Financial Plan: –
The human resource plan together with additional budgetary items are developed into a financial plan using a bottom up and top down process.
Project Implementation: –
Planning reports are generated, results analysed and control tools updated on a weekly basis.
Project Reporting: –
Effective project reporting from task managers to projects teams, thereon to management.
Project Controls: –
Additional control tools are introduced for maximum effect.
Risk Management and Contingency Planning: –
Integrating risk management and contingency planning exercise.
Project Management and Leadership: –
Level, timing and influence of management and leadership principles.
Project Monitoring and Control: –
Key Performance Indicators established are used in managing the monitoring and control processes.
Project Closure: –
Complete necessary administrative duties and prepare final project report.

Proposed Changes to BBBEE Codes of Good Practice

by Kapina Tjale | May 14, 2018 | Community of Experts

The proposed amendments to the DTI Sector Codes were issued for public comment on the 29 March 2018. Many companies are struggling to maintain their existing scorecard levels under the amended codes, let alone now understand these proposed amendments. Join our next Community of Experts event led by Reabetsoe Nengwenani, Technical Specialist at the BEE Chamber to understand what these proposed changes mean as well as the resultant impact on your business if gazetted. You will also have the opportunity to ask questions to the BEE Chamber in this regard in order to clarify your understanding.

Programme outcomes

Introduction to Ifundi and Ubuntu initiative ( 9.00-9.30am)
Discussion on the Proposed amendments to the BBBEE codes(9.30-10.30am)
Q and A session with Industry Technical Expert (10.30-11.00)
Presentation by Anusha Mariemuthu on BEE Chamber ( 11.00-11.30)
Closing

Speaker's Details

Reabetsoe Nengwenani, Technical Specialist at The BEE Chamber holds a B Com Accounting Degree (WITS), B-BBEE MDP (Unisa), Postgraduate Diploma in Business Administration (WBS). Reabetsoe has extensive experience in B-BBEE transformation with previous experience in consulting and Transformation lead at a IT multinational company and also serves as a Trustee Member on a Board Based Black Empowerment Trust. She is passionate about contributing towards initiatives that driving Economic Development for South Africa & driving initiatives that will see economic participation and growth for those previously disadvantaged.

Anusha Mariemuthu holds a B Com(Hons)-Cum Laude from the University Of Durban Westville and is an expert in the Transformation space , specialising in skills Development. Anusha has 13 years of specialised experience implementing sustainable BBBEE and Transformation strategies, Change Management and Learning and Development.

How to Earn Maximum B-BEEE Points through Skills Development

by Mukami | Nov 17, 2014 | Community of Experts

What would happen to sales in your company if your B-BBEE score drops by two to four levels? The competition would make inroads into your market!

A key to survival in current times is addressing the challenge the new B-BBEE codes present to business. The new B-BBEE codes will make it much harder to win business for companies that have not adapted. Without proper planning you will be placing your business at risk. It will be very difficult (unless you are at least 51% Black Owned) to obtain a high rating level due to the thresholds that were significantly increased.

Stefan Lauber facilitating the B-BBEE Workshop

One of the easiest way to boost your rating is through skills development. In essence the new codes demand a far greater investment in skills development with a particular emphasis on accredited training and learnerships.

Shift in the market

Stefan Lauber, the CEO of i-Fundi, has seen a shift in the market. “Instead of looking at learnerships as a compliance exercise, companies are now asking the question: “how can we make sure our training spend earns us a large number of BBBEE points while at the same time making us more competitive”“. This means that employers:

Proactively develop the skills necessary to excel in business
Invest in their people to retain them longer
Create ladders of learning that create career paths
Use learnership as an alternative way to attract new recruits
Implement these programmes cost effectively by taking advantage of all the available incentives.

For more information download the presentation.

How to maintain your best B-BBEE rating with the new laws coming into play

In the future, buyers will be careful to only choose suppliers whose B-BBEE rating will help them strengthen their own procurement score. If your company depends on sales from government or corporates it will have little choice but to work on its B-BBEE score. There are no short cuts. It will take you at least a year to complete the necessary steps, so don’t wait until the last minute to address this issue. Remember that the alternative of not improving your score could be costly.

The new codes introduce significant changes, according to Hanli Malan who facilitated ”The Revised BEE Scorecard with a Special Focus on Skills Development” at the last Community of Experts workshop.

In the past if the turnover of your company was below R35 million, you could choose the four elements that would make you look the best. Under the new codes you won’t be able to do that.

Key elements of the new B-BBEE codes

In the new codes:

Only the Socio-Economic Development element has stayed the same with 5 points. All other elements have become more difficult.
Management Control contributes now 15 points instead of 10 points.
Ownership has gained in importance; it now counts for 25 instead of 20 points. Unlike in the past, even small business will be assessed in terms of ownership. To understand this element better download the presentation from a previous Community of Experts event on the new B-BBEE codes.
Preferential Procurement and Supplier Development have merged. They now account together for 40 points instead of the previous 35. In other words, it will have a major influence on who companies will decide to work with.
Skills Development earns 20 points instead of 15 points, an extra 5 bonus points are available.

Hanli Malan facilitating at the B-BBEE Workshop

Priority elements

Of these five elements, ownership, preferential procurement and skills development are considered priority elements. That means that if you do not score at least 40% of the minimum target of these priority elements, you will be marked down by one level on your overall score. For example, you will have to score at least 8 out of the 20 points available for skills development or you will be penalised.

Skills development is one of the easier elements to gain points. Succeeding here will not only help with your score but will also give your business the skills it needs while lowering unemployment.

You can earn 8 points if you invest 6% of your payroll on the training of black people. It used to be 3%.
Another 4 points can be received if you spend 0.3% of your total payroll on learning programmes for disabled, black employees.
By participating in learnerships, apprenticeships and internships you can claim 4 points if 2.5% of your staff is enrolled on such programmes and another 4 points if 2.5% of your company’s headcount are black unemployed learners.
You earn an additional 5 bonus points if all your unemployed learners will be gainfully employed at the end of the learnership.

The following table summarises the above:

Skills Development Indicator		Points	Target
1.	Skills Development expenditure on any program specified in the Learning Programmes Matrix as a percentage of the leviable amount (LPM)
1.1	Skills Development expenditure on learning programmes specified in the LPM for black people as a percentage of the leviable amount	8	6%(up from 3%)
1.2	Skills Development expenditure on learning programmes specified in the LPM for black employees with disabilities as a percentage of the leviable amount	4	0,3%
2.	Learnerships, Apprenticeships and Internships:
2.1	Number of black employees participating in learnerships, apprenticeships and internships as percentage of total employees	4	2.5%
2.2	Number of unemployed black employees participating in learnerships, apprenticeships and internships as a percentage of total employees	4	2.5%
3.	Bonus Point
3.1	Number of black people absorbed by the industry at the end of the learnership programme	5	100%
TOTAL SCORE WITH BONUS POINTS TOTAL SCORE WITHOUT BONUS POINTS		25 20

New benefits under the latest codes

Apart from the changes in the way points are allocated under the new codes you should also be aware that:

You can now also claim for training costs of people that are not employed by your company.
Learnerships, apprenticeships and internships are a great way to boost your training spend, as you can count the salaries of the learners as a training expenditure.
Learnerships for the disabled allow you to score in all the three areas at the same time.
Skills development spending can be counted in two elements at the same time, i.e. it can be both part of supplier and enterprise development.
The cost for your Skills Development Facilitator can be claimed as a training expense.
Only 15% of your training spend can consist of internal training that is not accredited. In other words most of your training will have to be unit standard aligned.
Only 15% of your training claim can be for expenses such as travelling, catering or venue hire.
SETA grants such as the mandatory, pivotal and discretionary grants can help you to fund your training programmes.
SARS offers a tax break of R 60 000.00 per participants on a learnership, which equals a saving of R 16 800.00 per learner per year. For more information, read up on the presentation from a previous Community of Experts event on SARS Tax Breaks.
SARS also allows you to deduct R 1 000.00 per young person per month that you employ, which equals an annual saving of R 12 000.00. Terms and conditions apply.
You can also benefit from substantial salary savings as previously unemployed learners only need to be paid an allowance instead of the normal salary. Depending on the position under consideration, you can save up to R 2,000 per month per person on a learnership.
All of the above amounts a rough saving of approximately R50 000 per participant on a learnership.

As you can see from the above points, there are plenty of incentives available for you to boost your skills development score even if your training budget is limited.

Choose an experienced partner

“Choosing an experienced partner in implementing such programmes is essential to make such programmes a success”, Stefan Lauber says. As one of the first training companies to implement learnerships, i-Fundi has built a wealth of best practises on how to best implement accredited training programmes.

It provides an end-to-end solution that allows companies to focus on their core business safe in the knowledge that they work with a company that helps it to deliver the expected results with the least amount of trouble.

Conclusion

“Most companies realise that they have to implement accredited courses and learnerships. Invariably I am asked, how to go about starting these programmes” said Hanli Malan from Business Evolved Verification.

The new codes place a much greater emphasis on accredited training in general, and learnerships in particular.

Click on this link to get a handy checklist of the documentation that your verifier will need.