The B-BBEE scorecard assesses the structure of your business in line with the five elements of B-BBEE, with your B-BBEE Level determined by the points your business earns. To achieve the best possible results, it’s important to understand all the elements that make up the B-BBEE scorecard, as well as how the scoring works. This newsletter unpacks the Skills Development element of the B-BBEE scorecard.

The 5 elements of the generic B-BBEE scorecard

Element	Indicator	Available Points (Total of 118)
Ownership (Priority Element)	Measures the equity held by Black people in the entity in terms of voting rights, economic interest and realisation points	25
Management Control	Measures Black participation at board level, executive level and senior, middle and junior management levels, and employment of Black people with disabilities	19
Skills Development (Priority Element)	Designed to improve skill sets and measure skills development expenditure on Black people – including participation in learnerships, internships and apprenticeship programmes	20 (+ 5 Bonus Points)
Enterprise and Supplier Development (Priority Element)	This is the highest contributor of all the elements and reflects the entity’s contributions in relation to the following sub-elements:   Preferential Procurement. This measures the empowerment levels of the entity’s suppliers in terms of the procurement of goods and services. (25 points)   Enterprise Development and Supplier Development. This measures the entity’s contribution towards the upliftment, development, sustainability, and the financial and operational independence of Enterprise and Supplier Development Beneficiaries. (15 points	40 (+ 4 Bonus Points)
Socio-Economic Development	Measures the entity’s contribution towards initiatives or organisations that enhance the ability of Black people who remain non-participants in the economic mainstream to be included in the economy in a sustainable manner	5

What is Skills Development and how is it measured?
The Skills Development element of the B-BBEE scorecard focuses on how much a company invests in training and skills development initiatives, as well as the number of individuals trained. The focus is on previously disadvantaged groups, particularly Black people, women, youth, and people with disabilities. Because Skills Development is a priority element, if a company fails to achieve at least 40% of the targets in the Skills Development Scorecard, it will be downgraded by one B-BBEE level. 

Skills Development measures a company’s investment in training and development initiatives for its Black workforce, both internally (employed) and externally (unemployed), as a percentage of its annual payroll. A 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.

Skills Development Scorecard
The B-BBEE Skills Development component contributes a maximum of 25 points (20 points + 5 bonus points) towards the overall B-BBEE rating. In order for the measured entity to receive any points on the Skills Development element scorecard, the following criteria must be met:

• A workplace skills plan, an annual training report, and a pivotal report, all of which are SETA approved, and
• The implementation of a priority skills programme in general and in relation to Black people in particular.

Points are awarded based on:

• Skills expenditure: Companies must spend a set percentage of their payroll on training Black employees (typically around 6% if on the generic scorecard). If a company’s annual payroll is R10 million and it invests R600 000 in accredited and recognised skills development programmes, it would qualify for the full 20 points under the Skills Development element. 
• Learnerships, apprenticeships, and internships: Businesses must ensure that around 5% of their workforce consists of Black individuals in structured learning programmes.
• Absorption rate: Companies are evaluated on how many unemployed trainees are retained or employed after completing their programs. A total of 5 bonus points is allocated for unemployed learners who are absorbed into full-time employment.

Indicators & Description	Weighting Points	Compliance Target
Skills Development Expenditure on learning programmes for Black people as a % of leviable amount	6	3.5%
Skills Development Expenditure on bursaries programmes for Black students at higher education institutions	4	2.5%
Skills Expenditure on learning programmes for Black employees with disabilities as a % of leviable amount	4	0.3%
Number of Black people participating in learnerships, apprenticeships and internships as a % of total employees	6	5%
Number of Black people absorbed by the measured and industry entity at the end of the learnership programme	5	100%

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 enrolls its existing employees in a formal work-based learning programme that leads to an NQF-registered qualification. Employed learnerships relate directly 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.

Case Study: 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 was able to allocate the salaries of its employees placed on formal learnerships towards its annual skills spend target. For example, a monthly salary of R20 000 would see R240 000 allocated against skills spend for the 12 months. In addition to this, the cost of every learnership – R80 000 to R120 000 – can be deducted from taxable income, which is a significant additional tax benefit.

Employees completing an employed learnership are able to earn an income while learning new skills and gaining valuable workplace experience. What’s more, a recognised qualification adds to their value and employability.

For employers, employed learnerships raise the skill levels of current employees, which leads to more productivity and better engagement. They also enable succession planning within the business – resulting in continuity and sustainability, better client service and higher quality standards. 

Key aspects of the Skills Development element:

• Priority Element: A company’s overall B-BBEE level is significantly affected by its performance in the Skills Development element. Failing to achieve at least 40% of the targets in the Skills Development Scorecard will result in a downgrade of one B-BBEE level. 
• Training Investment: Companies are evaluated on the percentage of their payroll spent on training programs for Black people. The focus is on training and developing the skills of Black employees, including those with disabilities, and unemployed Black individuals. 
• Various Training Categories: Skills development programmes can include learnerships, internships, apprenticeships, bursaries, skills programmes and other accredited training. 
• SETAs and Workplace Skills Plans: Companies need to ensure that their training programmes are accredited by Sector Education and Training Authorities (SETAs) and that they have a Workplace Skills Plan (WSP). 

Talk to SA Business School
Talk to SA Business School about aligning your L&D strategy with your business strategy, to ensure that your L&D investment has the maximum impact on all the elements of your B-BBEE scorecard.

Chane Deneys – chaned@alefbetlearning.com

Aliecia van Rensburg – alieciar@alefbetlearning.com

SA Business School is an accredited learning and development partner. We are known for our professional and customised alignment of Skills Development offerings with clients’ business strategy and people development objectives.