Simple strategies that can improve your B-BBEE compliance by two levels
Various priority elements of Broad-Based Black Economic Empowerment (B-BBEE) offer bonus points. When viewed in isolation, one or two extra points may not add up to much, but when they are applied strategically, they can improve B-BBEE certification by up to two levels.
Sean Sharp, Executive Head of Sales at EduPower Skills Academy says that when companies are B-BBEE compliant, up to eight bonus points can be accessed relatively easily.
“Many of the levels are only separated by five points so the eight bonus points available under Skills Development and Enterprise and Supplier Development (ESD) can make a massive difference,” Sean explains. “With a few changes to your existing B-BBEE strategy, you can significantly improve your company’s score and your overall B-BBEE level – and that’s good for business.”
Sean uses the example of a level seven business that has 68 points. The additional eight bonus points would mean it qualifies as a level five contributor. In the same way, a level four company would achieve a level two status (88 points to 95).
Bonus points
Sean explains how the eight bonus points are allocated:
1. Five points are unlocked under Skills Development when the learners completing their Internships, Learnerships or Apprenticeship are absorbed by the company sponsoring the programme.
2. Two points are awarded when an organisation incorporates an Enterprise Development beneficiary into its supply chain by procuring from them. This SME must be 51% black owned.
3. One point is available to sponsoring companies that create one or more jobs as a result of their ESD initiatives.
Multi-level learnerships
According to him, the availability of the bonus points shows how B-BBEE creates economic development opportunities through the priority elements. Sponsoring various B-BBEE initiatives, however, can be complicated and resource intensive.
“There is an option available to companies that is far simpler and due to lucrative tax incentives, delivers greater ROI,” suggests Sean.
This solution uses learnership programmes that fulfil Skills Development and ESD requirements through life-changing opportunities. Developed by EduPower, the model benefits the Academy’s clients by providing a talent pool that delivers a legacy of transformation whilst it also develops their learners as entrepreneurs during the 12 months of the learnership.
“Working in collaboration with our sponsor clients, we have successfully created a powerful absorption model where we recruit, train, provide work experience and offer permanent job opportunities to our learners when they complete their learnerships,” says Sean. “The fact that more than half of these individuals are people with disabilities further confirms the strength of the model in creating life-changing employment opportunities.”
While some of the graduates are absorbed into the EduPower team, most of the employment opportunities created by EduPower are in entrepreneurship and the staff requirement to operate these small businesses. EduPower’s clients sponsor the recruitment and training as well as provide partial funding for the new businesses while the Academy’s quality training and tried and tested model does the rest.
“When learners graduate, they have already established new businesses, allowing them to participate in the economy and create additional jobs as they scale for growth. In this way, our multi-level learnerships can successfully unlock the three bonus points available under ESD and provides the springboard for the five points for absorption,” Sean adds.
Unlocking the eight bonus points available and the possibility to jump up to two levels can potentially create massive business opportunities for the sponsoring company. Using the multi-level learnership model, these organisations also have the opportunity to help small businesses flourish.
“That’s what makes the model so powerful – everyone in the model wins. The SME gets the kick-start it needs to grow and employ even more people, our learners secure long-term employment and our clients benefit because they unlock eight bonus points on their B-BBEE scorecard,” concludes Sean.
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