Inclusive B-BBEE Skills Development Strategies Deon Oberholzer CEO 29 February 2016

What we will talk about Recent developments in B-BBEE Sector Codes and timelines Summary of the Skills Development element Potential integrated strategies

Sector Codes Section 9(1) Effective Tourism Sector Section 9(5) (Out for public comment: All closed) MAC Sector Property Sector Forestry Sector Agri-BEE Repealed on 17 February 2016 Chartered Accountancy Sector Construction Sector Lost in translation or soon to be released? ICT Sector Integrated Transport Sector Financial Services

Time lines for Compliance Sector Codes remain valid until replaced or repealed Financial year end prior to replacement or repeal Previous/current Sector Codes Financial year end thereafter Amended Sector Codes if replaced Amended Codes if repealed

B-BBEE strategic advantage or unwelcome tax?

Bottom line for QSEs White QSEs will have to do Ownership and Skills Development to get a half-decent score. With no Black Ownership and no Black Top management, the most points possible is 68. This is a Level 7, but you drop to Level 8 A company that got a level 1 for full points on EE, PP, ED and SED only will get 42 points max (Level 8) and drop a level to non-compliant.

Skills Development

Main points Demographic profiling in Management and Skills (Not QSE) Priority elements penalty (Also QSE) Skills Development at 25 points (QSE = 30) Skills Development at 6% (QSE 3%) People with disabilities 4 points from 0.3% (QSE 3 from 0.15%) Return of salary concession

Some highlights Skills not restricted to staff Points for unemployed Training Tracking Tool 15% maximum for F (Workshops, Conferences and meetings) & G (Informal and Workplace training) 15% cap on accommodation, catering and travelling International training meets SAQA requirements Costs to include SDF or a training manager.

Economically Active Population Commission for Employment Equity Report 2013/2014 Male Female Total African 40.3% 34.9% 75.2% Coloured 5.6% 5.0% 10.6% Indian 1.9% 1.2% 3.1% White 6.2% 4.6% 10.8% 54.0% 46.0% 100.0%

Economically Active Population Black Only Male Female Total African 45.3% 39.3% 84.6% Coloured 6.3% 5.6% 11.9% Indian 2.1% 1.3% 3.5% 53.8% 46.2% 100.0%

Skills Development - Generic Measurement Category and Criteria Existing Codes New Codes Measurement Category and Criteria Points Target Skills development spend on black people 6 3% 8 6% Skills development for black employees with disabilities 3 0.30% 4 0.3% Black employees: Learnerships or category B, C and D 5%   Black employees in learnerships, apprenticeships or internships 2.5% Black unemployed in any training in matrix Bonus: Learners absorbed at end of the programme 5 100% Skills Development Total 15 25

Skills Development - QSE Measurement Category and Criteria Existing Codes New Codes Measurement Category and Criteria Points Target Skills development spend on black people 25 2% 15 3% Skills development spend on black women 7 1% Skills development spend on disabled 3 0.15% Absorption of Learners 5 100% Skills Development Total   30

Learnership, Internship and Apprenticeship Name Description Assessment Learnership Institution- based theoretical instruction as well as some practical learning with an employer or in a simulated work environment formally assessed through the institution Internship 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 Apprenticeship Occupationally- directed instructional and work-based learning programme that requires a formal contract formally assessed by an accredited body

Learner Absorption a measure of the Measured Entity's ability to successfully secure formal permanent or long-term contract employment for the Learner or to assist the Learner's proceed with further education and training;

Skills Development Strategies B-BBEE Priorities Maximum B-BBEE points Minimum additional costs Maximum salary inclusion Maximum business benefit Maximum Tax rebates & subsidies Maximum SETA grants SETA funded vs self funded

Integrated Strategies People centred Strategy Promotion Development Recruitment Pre recruitment

People centered Strategy Resources include: Skills Development to develop staff with key skills Skills Development for bursaries for recruitment Socio Economic Development to develop pre- recruitment (early bursaries) SETA Funding Learner Salaries

Steps for Skills Development Company headcount Management profile and challenges/opportunities LIA headcount for max points Unemployed training headcount for max points Demographics or just gender? African first, then Coloured, maybe Indian? Disabled budget for max points Learnerships, Internships & Apprenticeships Maximise salary concessions Remaining budget based on business needs

Book on our next B-BBEE Strategy Workshop - 16 March Questions and closing thoughts? Book on our next B-BBEE Strategy Workshop - 16 March deon@vericom.co.za www.vericom.co.za Thank You