BBBEE SKILL DEVELOPMENT (GENERIC) -

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.