Skills Development and the B-BBEE Scorecard

The Business School of South Africa (Pty) Ltd is a private, registered and accredited training institute offering bespoke skills development and eLearning solutions to our corporate clientele.

Established in March 2005 at a time when SETA legislature was just coming to the fore, we have developed a tried and trusted method in helping companies implement their Workplace Skills Plans (WSP’s) towards achieving their targets.

Skills Development is no longer a “nice-to-have”. It is a necessity.

For many years, Skills Development has been regarded as one of the most crucial pillars for economic success and stability. After all, a country that empowers its people, empowers its economy.

However, with lack of space in Universities, access to funding and a plethora of practical issues, South Africa has had to consider other avenues to upskill the nation and bridge the gap between experience and certification, especially in terms of gender and racial inequality. The following historical timeline indicates the introduction and impact of such a solution:

2003 – The Black Economic Empowerment (BEE) programme was introduced with the aim of increasing opportunities for the advancement of previously disadvantaged individuals (PDI’s). It was criticized for benefiting only a narrow stratum of previously disadvantaged groups.
2007 – A modified programme called Broad-Based Black Economic Empowerment or B-BBEE was implemented.
2013 – Updates to the Codes of Good Practice of the Broad-Based Black Economic Empowerment were gazetted by the South African Government.
2015 – The Amended Codes of Good Practice came into effect, increasing the effort of compliance by introducing priority elements; Ownership, Skills Development and Enterprise Development.

The changes include the consolidation of duplicate rating criteria into 5 compulsory elements to be used for the assessment of both Generic companies and Qualifying Small Enterprises (QSE’s) with the Ownership, Skills Development and Enterprise Development categories being marked as priority elements.

Old Codes	New Codes
1. Code 100: Ownership	1. Code 100: Ownership
2. Code 200: Management Control	2. Code 200: Management Control (integrating Employment Equity)
3. Code 300: Employment Equity	3. Code 300: Skills Development
4. Code 400: Skills Development	4. Code 400: Enterprise and Supplier Development (integrating Preferential Procurement)
5. Code 500: Preferential Procurement	5. Code 500: Socio-Economic Development
6. Code 600: Enterprise Development
7. Code 700: Socioeconomic development

As a result of the amended B-BBEE codes which came into effect on the 1st of May 2015, companies now find the need to focus more stringently on training interventions. Skills Development is regarded as a compulsory activity for organisations that wish to achieve a favourable B-BBEE rating.

Notable impact of changes:

A company’s BEE status will drop one level if black ownership is less than 10%;
Even if a company’s Ownership is 51% or more in favour of BEE, it must score 40% in the other 2 categories to avoid dropping a level;
Failure to obtain 40% of the points allocated in any of the 3 priority elements will lead to an organisation’s B-BBEE rating being automatically discounted (dropping by one level)

ELEMENT	WEIGHTING/POINTS
Ownership	25
Skills Development	20 (+5 Bonus Points)
Supplier and Enterprise Development	40
Management Control	15
Socio-Economic Development	5
Sub-Total	105
Bonus Points	13
TOTAL	118

The Skills Development element is crucial to maintaining or increasing an organisation’s B-BBEE Level. However, other significant changes in the scorecard are as follows:

The threshold of training expenditure has been changed from 3% of the leviable payroll to 6%;
Training that is not SAQA recognised and therefore does not award NQF credits is regarded as informal training and cannot exceed a total of 15% of training expenditure;
Internationally recognised qualifications that are not SAQA recognised cannot be claimed;
Travel, accommodation and catering expenses are limited to 15% of training expenditure;
Qualifications and accredited training that is provided to black employees and black unemployed persons will carry more points in the Skills Development category (black people are defined as people from African, Indian, Coloured and Chinese descent);
Expenses on scholarships and bursaries do not constitute training expenditure if the organisation can recover any portion of the expenses from the Employee or if the grant of the scholarship or bursary is conditional, with exceptions;
According to the Learning Programme Matrix of the amended Broad Based Black Economic (BBBEE) Codes of Good Practice effective May 2015, remuneration of registered Learners (Employed and Unemployed) and Interns can be claimed as part of training expenditure in categories B, C and D (Internships, Learnerships and Apprenticeships) whilst substantially contributing to the minimum 6% threshold spend. Refer to the table below.

CATEGORY	TYPE
A	Bursaries
B	Internships
C	Learnerships (Workplace)
D	Learnerships & Apprenticeships (Institution & Workplace)
E	Work-Integrated Learning
F	Informal Training (Short Courses, Conferences and other non-credit bearing soft skills)
G	Informal Training (Workplace)

Accredited courses (hard skills) carry more weight than non-credit bearing courses (soft skills) and organizations’ will be able to maximize their points by embarking on learning interventions that are aligned to SAQA Unit Standards and Qualifications with Learnerships (Employed & Unemployed; Funded & Unfunded) being the best way to bridge the skills gap as well as score highly in the Skills Development category

Be aware that there is a difference between institutional accreditation and programme accreditation. An institute that is accredited may not necessarily offer a programme that is accredited. In terms of the amended legislation, it is important that the programme be accredited (ie. SAQA registered awarding credits against the NQF) in order to be recognised as legitimate training spend. By engaging with The Business School of South Africa as your service pr

By engaging with The Business School of South Africa as your service provider, you will be assured of the highest quality of training delivery, some of the best faculty in the country, accredited learning for your staff and scorecard points in the Skills Development and Enterprise Development categories.

The Business School of South Africa (Pty) Ltd as a SETA registered training provider is a Level 1 (One) EME with 100% B-BBEE compliance and 135% procurement recognition.