Johannesburg

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.

Outsourcing in South Africa: A blurred bottom line Outsourcing based on lowest rates

by Mukami | Nov 4, 2014 | Blog, News

Alan Graham takes a look at outsourcing in South Africa and describes the benefits the destination can bring to the business.

When outsourcing first became popular, outsourcing was purely a cost saving mechanism. The mobile revolution has created a 21st century customer who demands more. In recent years, companies are thinking about the long term cost of outsourcing.

When you start looking at the long term effect of selecting an outsourcing destination purely on price, the bottom line becomes blurred. Factors such as customer retention, 1st call resolution, customer satisfaction and brand protection give cost savings a new meaning.

South Africa has become a buzz word in the industry, as a high quality offshore solution. It has even been called an equivalent to onshoring.

Some key facts about outsourcing in South Africa
South Africa is a nation of diversity, with 50+-million people, 17.32 million are part of the labour force and 62% of the population is urbanised.

South Africa is among the top 3 Locations that support English language skills at scale, it also has the added advantage to support a broad range of European languages.

South Africans also have a natural cultural affiliation to UK, US, EU, Australia and New Zealand and a neutral accent understood and accepted by all.

South Africa has the 26th largest GDP in the world and a thriving democracy.

With infrastructure to match any first world country and well-developed financial, legal, communications, energy and transport sectors, South Africa is on par with the other leading BPO destinations.

South Africa’s undeniable differentiator
So what’s all the fuss about? Yes, South Africa has the infrastructure, English and European language skills and talent pool to sustain the industry. On the surface, nothing stands out. Take a closer look, and the people element is the resounding differentiator.

South Africa offers a skilled talent pool that achieves excellent results with complex products and interactions. Companies currently outsourcing to South Africa, tend to outsource higher-end services, which they wouldn’t outsource to other locations or prefer to keep in-house.

Why? The claim is South African’s have a natural ability to create rapport, are customer focused, have empathy and the so called ‘Ubuntu’ service culture.

Are these claims valid? Well the results speak for themselves, some companies claim to experience higher 1st call resolution than they have experienced elsewhere. Others say they experience improved quality and the customer service is comparable to none.

There are BPO’s who have been operating in South Africa for the last 14 years. Yet, it was a relative unknown compared to its competitors. South Africa’s recent Global recognition as the Offshoring Destination of the Year in the 2012 NOA and 2013 EOA awards finally put this BPO gem on the map as an offshoring destination of choice. This recognition, together with a worldwide trend to differentiate with customer service and a strong focus on customer retention, has led to global awareness. The world is finally taking notice.

Companies want more! Customers expect more!
Cost is no longer the only deciding factor in the outsourcing space. Companies want more! Customers expect more! The only way for companies to be successful today, is to differentiate themselves with exceptional customer service. Companies, who have previously outsourced to destinations such as India and the Philippines based on cost savings alone, are back shoring. While other companies have realised the potential of quality offshoring destinations such as South Africa, where cost savings can still be achieved and customer retention can be maximised.

I predict South Africa’s popularity will only increase, as more companies become aware of the long term cost savings and associated benefits.

Human Capital as a Force Multiplier

by Mukami | Sep 24, 2012 | Blog, News

Commitment to the ‘People, Process, and Technology’ (PP&T) concept has never been more prevalent among businesses. Large firms, small firms, service firms, product firms, global firms, and regional firms alike – all, it seems, have adopted this likeable phrase as a presentation staple.

Like most popular business terminology, it has become a familiar inclusion in PowerPoint decks worldwide because it is grounded in a degree of truth. Any firm’s success or failure can usually be attributed to one or more elements of this triad, or more precisely, how one element worked exceptionally well with the others—or failed to do so. But given the ease with which “people, process, and technology” rolls off the tongue, it can be easy to begin to continuously group them together as three equal and homogeneous concepts. In reality, the most successful businesses consider each element—and its proper weighting and role in organizational execution—individually and carefully. Increasingly, organizations are realizing that people, process, and technology do not carry equal weight in organizational design. People, process, and technology do not require the same type or degree of attention and interaction in order to succeed. In this white paper, we examine each element of this triad and establish a working framework that a company in any industry can use to grow revenue and profit, increase customer satisfaction and retention, and develop a sustainable competitive advantage…

Human Capital Multiplier

On Track for Growth

by Mukami | Sep 24, 2012 | Blog, News

The contact centre industry is one of the few sectors of the economy that has been creating jobs in the last few years. Over 100 000 jobs have been added to the economy between 2003 and 2008.

Even though the growth of the industry has slowed down recently, finding good people is still a challenge. Leading companies have taken the currently reduced workload as an opportunity to explore more cost effective ways to attract and develop talent. The success of such programmes suggests that the time has now come to increase their scale so that the industry continues to have the people it needs to grow.

During the boom years preceding the recent recession, many contact centre managers preferred looking for experienced agents that could be hired with little lead times and who were ready to perform the moment they arrived. Hiring and developing people was done with little foresight, mostly in response to operational pressures. The poaching of staff was a common practice – agents would change jobs for only a small increase in salary.

This has changed. Most contact centres report reduced attrition rates. In the current economic climate employees are far more concerned with job security and no longer move around to the extent they used to. Companies, which want to hire good people, have no choice but to develop their own people or as a manager put it, Lto grow their own timber”. Nearly 90% of the company’s surveyed will recruit staff with no prior experience.

The development of people is high on the agenda of companies, the industry and government. Pilot programmes, such as Monyetla or SETA learnerships aimed at introducing new talent into contact centres have been enthusiastically adopted and have received positive feedback. Over 56% of the respondents do currently run learnerships. 87% of which are considered to be a success. Given the incentives offered by government this is no surprise:

Salary savings: Company can significantly reduce their salary bill. A learner allowance typically is R1500 per month.
Tax breaks: Government offers a tax break of up to R60 000 per learner which means a company pays up to R 16 800 less tax per learner.
Generous training grants: The recruitment and training of these learners can often be funded through grants.
Broad Based Black Economic Empowerment (BBBEE): If structured properly a company can earn up to 15% of its BBBEE score from learnerships.

In essence, a learner comes at no costs to a company if grants are available. Learners are highly motivated individuals who appreciate the opportunity of employment and typically match more experienced agents in terms of retention and are on par in terms of performance within three months.

As the results from this study show, most of these programmes are implemented as mature partnerships between the in-house and external training providers. There seems to be a clear understanding of each stakeholder’s strengths. External providers offer mainly generic training that meets the onerous standards set by the SETAs. 78% of external providers are therefore SETA accredited. In-house training on the other hand focuses primarily on company specific issues and therefore does not need to be accredited. Only 31% of in-house training is accredited.

Training is not only limited to new agents. Contact centres spend at least one day a month training their existing staff. Almost 50% of all contact centres are concerned with providing their agents with a formal industry qualification through Recognition of Prior Learning programmes.

A ladder of learning of formal qualifications exists across progressive levels on the National Qualifications Framework that matches the career path of an agent progressing to the level of supervisor, and then manager. This bodes well for the professionalization of the industry and will, in the long-term, alleviate the current shortage of qualified supervisors and managers.

This report clearly shows that the major pillars for the sustainable development of talent in the industry are in place. The challenge now is to roll out these programmes on a larger scale, which will require an increase in funding available for such initiatives and the continued collaboration of the industry, the SETAs and government.

The contact centre industry is committed to develop its staff. A request for proposal by the industry association BPeSA for the development of entry-level agents and supervisors was oversubscribed by a factor of ten in early 2009.

This is all good news for the country. Companies need well-trained agents that serve their customers well. The industry is able and willing to absorb many of the country’s school leavers, a sector of society bedeviled by unemployed.

The industry has proven its ability to make a contribution to the development of South Africa. It has doubled in size and created over 100 000 positions from 2003 to 2008. Considering that the industry often serves as a springboard for other careers, the number of people who found their first job in a contact centre is therefore actually much higher.

The prospects for continued growth are positive. Customers need to be served even in a recession. Contact Centres will continue to grow as they are one of the most direct and cost effective ways of interacting with customers. South Africa’s chances of attracting international outsourcing work are better than ever. Telecommunications costs are dropping and several of the world largest outsourcers such as Genpact, Teleresources, Teletech and Aegis, have already set up local operations, which is will attract others.

The challenge now remains for the industry to remain proactive and mobilize the necessary resources to scale up many of successful skills development initiatives so that it will not be caught off-guard when new staff are required as growth accelerates.