“A GOOD ENTREPRENEUR CONVERTS HIS SKILLS TO CASH.” - MICHAEL BASSEY JOHNSON

Since the inception of the Employment Equity Act (EE) the Commissions for Employment Equity (CEE) noted with great concern that strategic decision-making positions (Top, Senior and Middle management levels) are still white dominated as well as male dominated.


It was further highlighted that the African and Coloured population are primarily dominant at the Unskilled level, while females tend to be dominant at Junior Management and Semi-Skilled Levels.


It is to this end that the implementation of the Skills Development pillar as a priority element

was such a significant and welcomed change when the Revised Codes of Good Practice were implemented.


The skills development target (of the B-BBEE scorecard) is based on a company’s leviable amount, which is the company’s remuneration bill. In most companies, this often equates to one of the largest organizational costs. Currently the target is 6% of the leviable amount. In other words, to get its full complement of skills development points, the company should spend 6% of its remuneration bill on skills development efforts.


For B-BBEE scoring purposes, these targets are then further broken down into specific criteria subject to the Economically Active Population (EAP) targets. EAP (Economically Active Population) percentage of the total labour force that is made up of black people, as determined by Statistics SA. It’s presently about 87%.


EAP applies to Skills Development Expenditure; Bursaries for Black Students and Learnerships. It does not apply to Skills Development Expenditure on People with Disabilities or Absorption.


Where more than 50% of an entity’s employees are based in a single province, the Measured Entity may choose whether to use National or applicable Provincial EAP targets. However, the same choice must apply to both Management Control and Skills Development.


In a nutshell this means if the sub-minimum of 8 points out of 20 (which must be achieved, excluding the 5 possible bonus points) is not achieved, the Measured Entity will be discounted one B-BBEE Recognition Level.


In terms of the aforementioned the implementation of EAP targets represents a strong bias in favour of black Africans and against black Coloureds and black Indians. And as such it is imperative that a full skills analysis and/or audit is conducted within your business, with the assistance of a specialized consultant. This will ensure that unnecessary and often costly haphazard training programs, that don’t comply with EAP targets aren’t implemented, enabling your organization to maximise its skills spend for skills development targets but also to work towards closing the skills gaps within your organization.


WHY NOT make skills work for your business – as when employees are trained and upskilled, this results in employees who are able to work more productively – this means faster turnaround times with fewer mistakes, resulting in more profitability for the company.


Let us assist you in maximising your company’s skills into cash!


Article By:

Tiffany Reed: HR & SDF Consultant - Compliance Hub

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