Changing the BEE mindset


How workplace skills development and training can earn you a grant payback and BEE points

A recent report from Citi and the University of Oxford’s Martin School claims that two-thirds of jobs in South Africa could be lost to robots. A concerning claim in a country facing economic woes, possible downgrading, company closures and retrenchments. This should be all the more reason for corporate South Africa to focus our efforts on developing skills and training within our organisations to ensure optimal performance from staff, resulting in sustainable companies, impacting positively on the local economy.

Dr Nischal Khandai, COO at New Generation Mindset (NGM) and Director of the NGM Business Academy, says there is no doubt that employee development is vital for optimum efficiency, productivity and growth of a business. However, when left un-nurtured, he says, it may dissipate into unproductive channels. “As an organisation focused on human capital and skills development, we urge all corporates to support government and the respective industry bodies, in complying with the required legislation such as the Sector Education and Training Authority (SETA) Reports.”

The Sector Education and Training Authority (SETA), which focuses to a large extent on workplace training, realised the need to enforce effective corporate training and skills development and therefore implemented the Workplace Skills Plan (WSP) and Annual Training Report (ATR). The deadline for companies to submit their WSP and ATR data was at the end of April 2016.

Dr Khandai adds: “One has to take cognisance of the fact that apart from providing a critical tool for corporates to determine the process of achieving training goals, the submission of WSP and ATR data to SETA, enables a company to receive valuable points for BEE scorecard purposes.”

Companies that pay more than R500 000 on its annual payroll, also automatically qualifies to pay a Skills Development Levy and is eligible for a mandatory grant payback on submission of WSP and ATR data. As legislated by the Skills Developments Levies Act, the grant is set at a maximum of 20% of the Skills Development Levy (1% of the company’s annual payroll) paid by the company.

Structured approach

Dr Khandai explains that the Workplace Skills Plan provides a structured approach to specific training required based on the current and future skills needs of the organisation. A good WSP takes into account gaps identified through a skills audit, the performance management system, succession planning initiatives, and any new process or technology changes planned for the year. The annual training plan starts from the first of April in the current year, until the end of March in the following year.

The Annual Training Report (ATR) follows the WSP and provides an accurate account of all the planned training that has taken place in the reporting period within the organisation. All training completed from the first of April of the previous year, to the end of March in the current year, e.g. 1 April 2015 to 31 March 2016 should be included in this report.

Dr Khandai, who is responsible for the sustainable growth of the Business Academy, told BBQ in an exclusive interview that with the reported threats of robots taking over people’s jobs, the SETAs (Sector Education Training Authorities) play a pivotal role in all sectors. Their roles as institutions of funding and regulating courses and accreditation is key to getting large numbers of youth and disadvantaged people trained through provision of funding to companies and various grants and incentives.

“I feel they are contributing well to the skills base, but South Africa has such a legacy of segregation and marginalisation that much more needs to be done to get our skill base to a higher level in order to compete in the global labour market. Failing which, we will fall short of economies which have advanced into robots and machines performing tasks which were at one stage labour intensive.”

Looking at the submission of Work Skills Plan (WSP) and Annual Training Report (ATR) data to SETA, Dr Khandai says this will enable one to receive valuable points for BEE scorecards. Companies are obliged to submit their training reports and future training plans to their relevant SETAs each year. These Workplace Skills Plans are detailed plans on who will be trained in the organisation, at what levels, what training and what demographic groups within the employment hierarchy they will apply to. When people of colour, African, Indian and Coloured staff are trained, they fall within the category of black employees within the definition of the BBBEE Act. The act has a category for points and compliance which relates to skills development, and it is this portion of the BBBEE which allocates points in compliance to skills spend and development for employees who fall within the category of black staff.

So what are the benefits of BEE scorecards and how effective is the BEE?

“The BEE scorecards are the tools for the application and compliance to the BBBEE Act, which is legislation. It encourages compliance in organisations so that economic transformation can occur in South Africa. Is it effective? Yes, to a small extent. Significant work beyond the act needs to be done to address the past, create opportunities and find new and sustainable ways to fund black business and to support them in a strategic way so that they can prosper, sustain growth and contribute significantly to the socio-economic elements of the country we live in.”

He says BEE is definitely a useful tool to assist in the redress of the past injustices particularly in the economic sectors:

The BBBEE Act together with the various charters in each industry will play a prominent part in economic transformation, but given the significant number of years of unjust legislation and practices, more pieces of legislation needs to be enacted dealing with areas of access to funding, labour regulation and our overall competitive advantage relative to other developing economies.
South Africa needs to narrow the gap between its primary and secondary economies, which are largely divided by race.
Government and the private sectors need to collaborate more to build the economy and move away from blaming each other, using scape goats and defaulting to the past practices of Apartheid.
There is merit in Clem Sunter’s suggestion that one way to start the dialogue in building the South African economy is to have an Economic CODESA. As much as there is scepticism in this notion it could be a viable forum to introduce new ideas and implementation tools, as it is evident that what we have isn’t doing justice to grow the economy and alleviate such high levels of unemployment and youth regression.Making an impact

Speaking proudly about the impact his organisation has made thus far in the industry, he says they are currently developing over 50 SMME companies for Eskom, Dimension Data, Samsung and MTN Business. “Many of these SMMEs have employees and directors, so our skills programmes and management development initiatives touch them all, enhancing their overall education and skills base. In essence we can be proud that we are developing many disadvantaged individuals to become active economic citizens and contribute to their families and build South Africa in due course.”

Dr Khandai’s vision for the academy is for it to significantly grow so that it offers affordable skills and management education to as many people as we can without any compromise in standards and quality of education. As for his future plans, he says he has had exposure to some 32 countries and their universities and business schools, and he wants to start amending their ideas and bring their ideas that could work to South Africa.

“We need to think globally but act locally and educate the people of South Africa so that they can acquire the tools to improve the economy and sustain us all.

"We work with humans and it would be a sad day to see jobs lost to robots for the pure reason of lack of competence. Training and skills development is key. We invite any companies who require any assistance in completing their WSP or ATR reports, to contact us,” Dr Khandai concludes.

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