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Out-of-the-box ideas for B-BBEE

Five fresh perspectives on implementing B-BBEE.

Entrepreneur, 20 July 2012  Share  0 comments  Print

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The business community in South Africa has had close to a decade to take on board the requirements of Black Economic Empowerment (BEE) since its principles were first defined by the Black Economic Empowerment Commission in 2001.

The terminology around BEE compliance is now part of the language of business and we talk about broad-based black economic empowerment or ‘triple BEE’ as comfortably as we do about the ‘triple bottom line’.

Nevertheless, we still have a very long way to go in opening up the economy to all those who were previously marginalised. Deon Oberholzer, CEO of Veri-Com, says that he still encounters businesses that are reluctant to engage with B-BBEE, largely as a result of fear and misinformation. “There is fear that the commitments may be too onerous and the perception that the cost may impact on sustainability,” he says.

Fresh perspectives

Usually all it takes is a fresh perspective to shift this mindset. Here are Oberholzer’s five out-of-the-box suggestions that may be all we need to get us thinking more creatively and positively about how we can participate.

The emphasis here is not on how to get BEE scorecard points (although these are all point-scoring suggestions), but how to engage in meaningful and genuinely broad-based BEE, while improving your competitiveness in the long term.

The design of the B-BBEE Codes is intended to enable companies to make strategic investments in their own sustainability and growth, while at the same time transferring benefits to the wider community. Thus you could select your beneficiaries from within your own staff community or the community within which your business operates.

For instance, by all means offer bursaries to children of your own employees, but ensure that those bursaries are for training in the skills that you will be able to use in your own company.

Then offer the recipients holiday jobs in your company, and take them on as interns after they have qualified. In this way you build up your skills pool and build retention and loyalty within your existing employee base.

Create an opportunity

Identify a beneficiary who needs a break and create an opportunity for that person, or group, to gain skills and earn an income within your supply chain. For instance, you’d like to procure from a women-owned company, but you can’t find a suitable one.

So invest in enterprise development and help some women to start their own company and supply you with the products or services you need. Get involved with mentorship and skills transfer to help your beneficiaries.

The result will be a tailor-made supplier who can meet your exact needs and who will also have the capacity to enter the wider market and be sustainable. There is a growing pool of black entrepreneurs that want to get into real business opportunities, and finding them is quite possible.

Solve a particular problem

It is highly likely that you have a problem that could be addressed via a B-BBEE solution. Perhaps you can’t find people with the right skills to meet your employment equity targets? You can start to grow that resource pool from the bottom up. You source people, you train, you employ and you continue the development.

If it means starting with supporting a maths and science programme at a local secondary school, then that is where you should start. If you can’t find black people with the capacity to be middle managers, you should recruit and groom your lower-level employees for that career path.

You will score points for your efforts now and score more points down the line when you have up-skilled the right people. The many government programmes on learnerships can help carry the cost.

Make an ongoing contribution

Set up a programme of B-BBEE engagement that has long-term potential.  Accept that the individuals who are trained, interned or empowered within your organisation may then be snapped up in jobs elsewhere; don’t let that discourage you.

If you have a pipeline of candidates going through your programme, for which you will score points every year, you will have an ongoing pool of human capital to draw from and at the same time you will be helping to grow the skills base within your sector. Also, once your programme gets a reputation for being a great training base, you will soon start attracting higher calibre candidates. Everybody wins in the long run.

Look beyond the obvious

B-BBEE is not only about black ownership and being obliged to spend some of your hard-earned profit. It is good business practice to reinvest a portion of your nett profit after tax into your company. B-BBEE just asks that some of that reinvestment should benefit both your company and the wider community.

It also makes room for all racial groups. In the case of enterprise development, for instance, the company you choose to support needs to be only 51% black-owned. Or in the case of socio economic development, only 75% of the benefits need to go to black people.

So if you want to give a bursary to a gifted maths student who happens to be white, you can do so; just make sure that you also give bursaries to three black students and you can still score your points.

“Organisations of any size can get involved in B-BBEE,” concludes Oberholzer. There is scope for the smallest exempt micro enterprise to make a contribution. Certified verification agencies and B-BBEE consultants can assist in planning a strategy that will get you excited and inspired to proceed.

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