BBBEE SKILL DEVELOPMENT (GENERIC)

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Introduction to the Generic BBBEE codes

Companies must obtain a BBBEE level to do business with other companies or do business with the government. Current BBBEE scoring contains 25 points for skills development. Skills is a priority element. If the company does not score at least 40% of the 20 points (excluding the 5 bonus points) they will automatically drop a level on BBBEE.

Different BBBEE scorecards

There are various BBBEE scorecards applicable to different sectors. The applicable scorecard will depend on the SETA with which the company is registered, or where the main revenue stream is coming from. A company will fall either under Generic or QSE if they cannot be allocated to any other SETA.

A list of the different BBBEE scorecards is as follows:

  • Generic
  • QSE
  • ICTI Generic
  • ICTI QSE
  • Transport Generic
  • Transport QSE
  • Marketing, Advertising and Communications Generic
  • Marketing, Advertising and Communications QSE
  • Financial Generic
  • Financial QSE
  • Mining Generic
  • Mining QSE

Skills Requirements

A company cannot claim any points for skills if the following are not in place:

  • Preparation and proof of submission of workplace skills plan (WSP)
  • Preparation and proof of submission of annual training plan (ATR)
  • No mandatory training (legal required training for example health and safety) can be calculated for skills points

Black people

The code refers to black people. Black people are categorized into the following groups:

  • African
  • Indian
  • Coloured

Disabled people

The code refers to disabled people. Disabled people include those who:

  • Have a physical or mental impairment
  • This impairment is long term or recurring
  • This impairment limits their prospects of entry or advancements in employment

Skills Development points

The 25 skills development points are broken up as follows:

Skills Expenditure 8 6% of training spend
Skills Expenditure on black disabled employed people 4 0.3% of training spend
Learnerships – numbers of black people as percentage of total employees 4 2.5% of total employees
Learnerships – numbers of black unemployed people as percentage of total employees 4 2.5% of total employees
Number of black people absorbed at end of learnership (training tracking tool must be developed) 5 100% or people absorbed
25  

Skills Expenditure

The company must spend 6% of leviable (skills development levy) payroll on training. This training includes the following:

  • Spend on black people
  • 85% on accredited course (Category B, C, D or E) Please see below for category explanations
  • 15% can be on non-accredited courses (other categories)
  • This 6% must also be split according to the economically active population (EAP) published by STATS SA.
Skills Expenditure needed
Race No. of Employees Points available EAP Targets Total spend required (R) Accredited (85%) Non-Accredited (15%)
African Male: 27           1.33 42.80%         308 160          261 936            46 224
Indian Male: 15           1.33 1.80%           12 960            11 016               1 944
Coloured Male: 2           1.33 5.30%           38 160            32 436               5 724
African Female: 4           1.33 35.10%         252 720          214 812            37 908
Indian Female: 5           1.33 1.00%             7 200               6 120               1 080
Coloured Female: 2           1.33 4.50%           32 400            27 540               4 860
Non-Black: 45 9.50%           68 400            58 140            10 260
Total: 100           8.00 100%         720 000          612 000          108 000

This will then be the maximum allowed expenditure per group, split between accredited and non- accredited training.

The leviable amount includes the following:

  • Normal salary
  • Overtime
  • Leave pays
  • Bonuses
  • Commission
  • Lump sum payment

Categories

Cat. Narrative description Delivery mode Learning site Learning achievement
A Instruction-based theoretical instruction alone – formally assessed by the institution Institutional instruction Institutions such as universities and colleges, schools, ABET providers Recognised theoretical knowledge resulting in the achievement of a degree, diploma or certificate issued by an accredited or registered formal institution of learning
B Instruction-based theoretical instruction as well as some practical learning with an employer or in a simulated work environment – formally assessed through the institution Mixed mode delivery with institutional instruction as well as supervised learning in an appropriate workplace or simulated work environment Institutions such as universities and colleges, schools, ABET providers and workplace Theoretical knowledge and workplace experience resulting in the achievement of a degree, diploma or certificate issued by an accredited or registered formal institution of learning
C Recognised or registered structured experiential learning in the workplace that is required after the achievement of a qualification – formally assessed by a statutory occupational or professional body Structured learning in the workplace with mentoring or coaching Workplace Occupational or professional knowledge and experience formally recognised through registration or licensing
D Occupationally directed instructional and work-based Learning Programme that requires a formal contract – formally assessed by an accredited body Institutional instruction together with structured, supervised experiential learning in the workplace Institutions and workplace Theoretical knowledge and workplace learning, resulting in the achievement of a South African Qualifications Authority registered qualification, a certificate or other similar occupational or professional qualification issued by an accredited or registered formal institution of learning
E Occupationally directed instructional and work-based Learning Programme that does not require a formal contract – formally assessed by an accredited body Structured, supervised experiential learning in the workplace which may include some institutional instruction Workplace and some institutional as well as ABET providers Credits awarded for registered unit standards
F Occupationally directed informal instructional programmes Structured information sharing or direct instruction involving workshops, seminars and conferences and short courses Institutions, conferences and meetings Continuing professional development, attendance certificates and credits against registered unit standards (in some instances)
G Work-based informal programmes Informal training Workplace Increased understanding of job or work context or improved
Skills Expenditure needed
Race No. of Employees Points available EAP Targets Total needed to spend Accredited (85%) Non-Accredited (15%)
African Male: 27           1.33 42.80%         340 508          289 432            51 076
Indian Male: 15           1.33 1.80%           14 320            12 172               2 148
Coloured Male: 2           1.33 5.30%           42 166            35 841               6 325
African Female: 4           1.33 35.10%         279 249          237 361            41 887
Indian Female: 5           1.33 1.00%             7 956               6 762               1 193
Coloured Female: 2           1.33 4.50%           35 801            30 431               5 370
Non-Black: 45 9.50%                    –                       –                     –
Total: 100           8.00 100%         720 000          612 000          108 000

Scenario A: Company A Spend on training for financial year

If company A spends approximately 50% overall on each accredited and non-accredited training, then the calculation would look as follows:

Actual Training spend
Race Total actual spends Accredited Non-Accredited
African Male:               98,770              77,771              20,999
Indian Male:               87,796              17,616              70,180
Coloured Male:            165,507              89,403              76,104
African Female:               40,379              23,206              17,173
Indian Female:            108,657              23,746              84,911
Coloured Female:               51,729                 1,288              50,441
Non-Black:            110,852              90,334              20,518
Total:            663,690            323,364            340,326
Training Spend counted by points
Race Total actual spends Accredited (85%) Non- Accredited (15%) Points
African Male:               98 770               77 771               20 999 0.39
Indian Male:               14 320               12 172                 2 148 1.33
Coloured Male:               42 166               35 841                 6 325 1.33
African Female:               40 379               23 206               17 173 0.19
Indian Female:                 7 956                 6 762                 1 193 1.33
Coloured Female:                 6 658                 1 288                 5 370 0.25
Non-Black:                        –                          –                        –
Total:             210 249            157 041               53 208 4.83

Scenario B: Company A Spend on training for financial year

If company A spends most of its training spend on non-accredited training, then the calculation would look as follows:

Actual Training Spend
Race Total actual spends Accredited Non-Accredited
African Male:               98,770              20,742              78,028
Indian Male:               87,796                 6,146              81,650
Coloured Male:            165,507              11,585            153,922
African Female:               40,379                 9,287              31,092
Indian Female:            108,657                 8,693              99,964
Coloured Female:               51,729                 4,138              47,591
Non-Black:            110,852                 9,977            100,875
Total:            663,690              70,568            593,122
Training Spend counted by points
Race Total actual spends Accredited Non-Accredited Points
African Male:               71 818               20 742               51 076 0.28
Indian Male:                 8 294                 6 146                 2 148 0.77
Coloured Male:               17 910               11 585                 6 325 0.57
African Female:               40 379                 9 287               31 092 0.19
Indian Female:                 7 956                 6 762                 1 193 1.33
Coloured Female:                 9 508                 4 138                 5 370 0.35
Non-Black:                        –                          –                        –
Total:             155 865               58 661               97 205 3.50

The company can only earn 3.50 out of the 8 points. The company again scored “easy points” for Indian females.

Scenario C: Company A Spend on training for financial year

If company A spends most of its training spend on accredited training, then the calculation would look as follows:

Actual Training Spend
Race Total actual spends Accredited Non-Accredited
African Male:               98,770              78,028              20,742
Indian Male:               87,796              81,650                 6,146
Coloured Male:            165,507            153,922              11,585
African Female:               40,379              31,092                 9,287
Indian Female:            108,657              99,964                 8,693
Coloured Female:               51,729              47,591                 4,138
Non-Black:            110,852            100,875                 9,977
Total:            663,690            593,122              70,568
Training Spend counted by points
Race Total actual spends Accredited Non-Accredited Points
African Male:               98 770               78 028               20 742 0.39
Indian Male:               14 320               12 172                 2 148 1.33
Coloured Male:               42 166               35 841                 6 325 1.33
African Female:               40 379               31 092                 9 287 0.19
Indian Female:                 7 956                 6 762                 1 193 1.33
Coloured Female:               34 569               30 431                 4 138 1.29
Non-Black:                        –                          –                        –
Total:             238 160            194 327               43 833 5.87

The company can only earn 5.87 out if the 8 points. The company again got “easy points” for Indian females, Indian Males and Coloured males.

The company must register 2.5% of number of black people on learnerships as a percentage of total employees. Please note that the 2.5% is calculated according to the EAP target of South Africa and is calculated same as spend in African Male, African Female, Indian Male, Indian Female, Coloured Male, Coloured Female. In the above example of 100 employees, we must split these according to the EAP targets. This will show us the number of learnerships that must be done per race group. Remember, all calculations must be rounded up. The table looks as follows:

Race No. of Employees EAP Targets  Max Allowed per group  Allowed for learnerships  2.5% of EAP targets  Roundup
African Male: 27 42.80%          42.80               27.00                 1.07            2.00
Indian Male: 15 1.80%            1.80                  1.80                 0.05            1.00
Coloured Male: 2 5.30%            5.30                  2.00                 0.13            1.00
African Female: 4 35.10%          35.10                  4.00                 0.88            1.00
Indian Female: 5 1.00%            1.00                  1.00                 0.03            1.00
Coloured Female: 2 4.50%            4.50                  2.00                 0.11            1.00
Non-Black: 45 9.50%            9.50                  9.50                      –
Total: 100 100%       100.00               47.30                 2.26            7.00

The company must thus do a total of 7 learnerships for employed learners.

Learnerships numbers of unemployed black people as percentage of total employees

The company must register 2.5% of number of unemployed black people as a percentage of total employees on learnerships. The company must basically do the same number of unemployed learners as employed learners in the same race split. The company must also do 7 unemployed learnerships, according to the race split above.

Number of black people absorbed at end of learnership

The company must endeavor to absorb the unemployed black people on learnerships at the end of the learnership. A maximum of 5 bonus points is granted if the company absorbs the learners. These bonus points are allocated according to the percentage of unemployed black learners absorbed at the end of the Learnership.

For example: 5 unemployed learners were sponsored to complete the Learnership, just one gets absorbed upon completion. The company will earn 1 bonus point out of the maximum 5 available bonus points.

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