The Best B-BBEE Scorecard Points Sit Inside Skills Development

By Anton Visser, Group COO of SA Business School

For most South African businesses, the Skills Development component of the B-BBEE scorecard is one of the most challenging and costly elements to deliver on.  However, by strategically combining employed and unemployed learnerships, businesses can secure the most points for the least money spent, while achieving the best return on their training and skills development investment. In fact, businesses can save up to 80% of their spend.

Skills Development matters

Skills Development measures the investment that a business makes in the training and development of its historically disadvantaged workforce in order to improve their skills and competencies.

If the business does not achieve at least 40% of the targets in the Skills Development area, it is loses one B-BBEE level.

In contrast, a proper, well-informed Skills Development and training strategy includes unemployed and employed learnerships, a focus on people with disabilities, and consideration of tax breaks, subsidies and SETA funding.

Unemployed vs employed learnerships

Most people think of learnerships only in the context of unemployed learnerships, where the learner is hired by the employer purely to complete the learnership and, in most cases, for that specific duration.

With an employed learnership, a business enrols its existing employees in a formal work-based learning programme that leads to an NQF-registered qualification.

Employed learnerships are directly related to an occupation or field of work, for example, contact centre operations, sales and marketing or project management.

The business is able to recognise the salaries of these employees towards its skills spend target, while investing in the training of its own staff.

Common concerns

Although there are obvious benefits for the company and the employee’s personal and professional growth, some businesses worry that employees will not successfully complete their learnerships and compromise the expenditure investment.

Central to this anxiety is the capacity required to complete the learnership – employed learners have additional responsibilities and time management pressures of their full time jobs, and whether employees will be sufficiently and sustainably motivated.

Other employers are concerned about the perceived unavailability of suitable learnership programmes, while there are those who fear that they don’t or won’t have enough qualifying employees.

SA Business School offers the following tips for employers to successfully implement employed learnerships:

  1. Make it voluntaryDon’t force employees to undertake a learnership. Rather make it a voluntary initiative.
  2. Make it exclusive – Incorporate access to the learnership into your performance incentive programme, so employees see it as desirable.
  3. Incentivise performance – Reward those who successfully complete their learnership programme, with bonuses, promotions or other forms of recognition.
  4. Encourage cooperation – Ensure that the relevant line managers and supervisors buy in to the project beforehand.
  5. Provide paid time off – Ensure that paid time off is made available during office hours, to attend classes and complete tasks and assignments relating to the programme.
  6. Choose the right partner – Select a training provider who is aligned with your business goals and will provide the most cost-effective solution while ensuring that your people are authentically upskilled.
  7. Align with the individual – The subject matter of the learnership must align with the career path of the employee and the objectives of the business. You’ll need a solid training partner to advise you.

SA Business School recently carried out an employed learnership intervention for a client in the financial services sector. The client’s middle management completed a generic management programme (NQF 4), their senior management completed a more senior management programme (NQF 5) and their admin staff studied business administration. The business was able to realise R10 million of B-BBEE points, while only spending R2 million on training. By embarking on employed learnerships, the business got to allocate the salaries of its employees placed on formal learnerships towards its annual skills spend target – for example a monthly salary of R20k would see R240 000 allocated against skills spend for the 12 months. In addition to this, the cost of every learnership – between R80 000 to R120 000 – can be deducted from its taxable income, which is a significant additional tax benefit.

At the same time, employees get to earn an income while learning new skills and gaining valuable workplace experience, to earn a recognised qualification, adding to their value and employability. For employers, employed learnerships raise current employee skill levels, and heightened skills lead to more productivity and more engaged employees. It also makes succession planning from within the business possible.  Solid succession planning means continuity and sustainability of the business, client service and quality standards.

When it comes to getting the best returns for the business and its people, the best B-BBEE scorecard points really do sit inside skills development.  It is time to abandon the tick-box approach to skills development, and to invest your company’s skills development expenditure into learnerships and skills programmes for your employees as the strategic enablers they were intended to be to address critical skills shortages, create jobs and progress careers, and to deliver a competitive advantage for your business and our economy.

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