South Africa demands a profound shift towards a transformative, sophisticated and solutions-driven approach.(John McCann/M&G)
Changes to South Africa’s Broad-based Black Economic Empowerment (B-BBEE) legislation are already underfoot, with the statutory process around reforming the Employment Equity Amendment bill set to last month.
A research paper by consultancy firm Songhai Advisor forecasts that the new reforms will allow the state to set employment equity targets for certain business sectors. More significant though are suggestions that the proposed reforms will also require the government to limit the issuing of contracts to businesses that are not compliant with B-BBEE law.
In some ways, a rethink of B-BBEE is much needed given sluggish targets of late. The Sanlam Gauge report shows that most businesses are not only struggling to meet their B-BBEE contribution targets, but black ownership of South African businesses has also fallen well below 30%.
Like everything in the world, failure to meet these targets can be attributed to one thing, and one thing alone. Cost!
All the elements on the B-BBEE scorecard require some financial investment from businesses, many of whom are feeling the financial pinch from declining sales and revenue since the pandemic began. Investment in B-BBEE and transformation is unlikely to be top of their lists and understandably so.
At Dynamic DNA, a 51% black female-owned, B-BBEE level two accredited QSE training and skills development provider, we have seen this decline in investment first-hand and it is incredibly concerning.
Over the past few months, we have seen several businesses choose not to support learning initiatives which specifically drive investment in learnerships and scarce IT and business skills. It is not just because they don’t want to foot the bill financially, but also because these learnerships mean employees need to spend time away from work being trained.
When we fail to use B-BBEE as a key instrument for wider economic growth, everything else stagnates, including individual company growth. If we are to make any headway, all hands need to be firmly on deck to redress inequality and boost economic expansion and it starts with skills development.
While the costs of training are a deterrent for sure, and especially during a downturn, we are finding that most businesses are unaware of the support structures available to them when accessing funding opportunities. This can not only help mitigate the costs of learning interventions but also hinders skills development targets and prevents them from achieving the enterprise and supplier development points on their scorecard.
The true value of B-BBEE and empowerment is its ability to positively change people’s lives and driving skills development is one of the best drivers to do this.
Enterprise and supplier development targets create further employment opportunities for employees and can also fuel a new breed of much-needed entrepreneurs who possess the essential skills needed to help grow our economy even further.
It is a win-win for everyone, but choosing to ignore the opportunities B-BBEE brings in harnessing growth will do nothing but stifle business growth and put South Africa on a negative growth path. It really is that simple.
Some businesses understand the value of continuously and successfully achieving the B-BBEE skills element of their scorecard requirements. They do this by realising the value of a skilled workforce and adopting a concrete change management strategy to craft a future talent pool of skilled labour.
This in turn results in uninterrupted transparent and evolving skills transformation for employees and enhancement of innovation, sustainability, and diversity – each one a true component of empowerment.
There are three ways companies can improve their B-BBEE scorecard:
Make informed decisions
Start by doing a foolproof gap analysis and investment evaluation of your current business operations. This will ensure that you achieve each of your business goals in an affordable and effective manner.
Always connect your indicators to people
An employee who is continuously developing his or her skill set and growing personally and professionally does not only benefit personally. Business owners and the wider economy also do, and this is a foolproof model for success if executed effectively.
Have complete oversight
Business owners want to ensure that they implement, manage, and oversee the full execution of their B-BBEE strategy at all levels of investment. Make sure you do not allow for over-promising and poor deliverables from service providers and partners assisting with this process as this will negatively impact the successful outcome of your transformation outputs.
Prudence Mathebula is a 51% shareholder and the managing director of ITC training and skills development company Dynamic DNA
The views expressed are those of the author and do not necessarily reflect the official policy or position of the Mail & Guardian.