Broad-based Black Economic Empowerment (BBBEE) was implemented to bring about transformation, inclusion and to stimulate growth in the South African economy.
Many companies, however, view it as a burden, doing the bare minimum so as not to fall foul of legislation. To add insult to injury, the revisions to the BBBEE codes have cost some companies at least two levels in their BEE ratings.
So how do you stem the tide of negativity when it comes to the revised BBBEE codes?
The Revised BBBEE Scorecard
Firstly, let’s unpack the BBBEE scorecard to understand what we’re dealing with.
The revised scorecard can be summarised as follows:
- Scoring areas have been reduced from 7 to 5
- Employment Equity and Management Control merge into a single pillar called Management Control
- Preferential Procurement and Enterprise Development merge into a single pillar called Enterprise and Supplier Development
- Three priority elements (*) have been identified i.e Ownership, Skills Development and Enterprise and Supplier Development
- Minimum threshold requirements have been defined for priority areas
- Point requirement to attain Level Qualification have been increased i.e 85 points (old) = Level 2 versus 85 points (new) = Level 4
How to Leverage These Revisions
“Businesses short-change themselves if they look at the BBBEE requirements in isolation and take the negative perspective of seeing them solely as a burden,” says Ms Toni Shüping, Group Executive Manager of the Honeyguide Group.
- Ownership is a priority area that motivates for economic empowerment for the previously disenfranchised.
Suggestion: Employment strategies, like opting for contract employees as opposed to salaried employees, while developing appropriate BEE candidates for permanent posts, provide scope for BEE development while still protecting operational effectiveness.
- Increased weighting in Enterprise & Supplier Development is designed to drive growth in SMMEs and encourage entrepreneurship.
- Skills Development encourages personal development and the opportunity to obtain recognised qualifications.
Solution: Leveraging existing business practises, like advertising and marketing, to fulfil Skills Development programs becomes an existing business practise with the extended scope of contributing to BEE compliance.
It also contributes to a more educated workforce and ultimately leads to a less conflict-ridden labour market.
When implemented in-line with its true intentions, the revised BBBEE codes are not a “crisis” for business, but rather an opportunity for long term, positive influence on the economy and the country.
The Chinese word for “crisis” is composed of two characters – one meaning “danger” and the other “opportunity”. So, it’s really about perspective and the perceived BBBEE “crisis” can actually be viewed as a great “opportunity.”