TOP FIVE BEE INTERPRETATION MISTAKES – SKILLS DEVELOPMENT
Expert BEE consultants, EconoBEE have used their vast experience to compile a list of the top five mistakes that businesses make when interpreting the BEE elements. The series presented over the past few months is concluded with a list of the most common errs when interpreting the Skills Development element.
Skills Development, in terms of BEE, encourages training and development of the skills of black employees. See below the top five mistakes as identified by EconoBEE, so that you can learn from the mistakes of others and save yourself the expensive:
1. Using net profit after tax instead of payroll when calculating Skills Development expenditure on learning programmes:
One of the indicators for a generic company (a company with a turnover in excess of R35m) says that a company must have spent 3% of payroll training black employees to earn a total of 6 points. And for a QSE (company with turnover between R5m and R35m) to earn their total of 25 points they must have spent 2% of their payroll on learning programmes for black employees. The mistake here is that instead of using total payroll, companies use net profit after tax.
Don’t forget about learnerships. Any course that results in a formal qualification and requires workplace experience will count as a learnership. On the skills development matrix this is category B, C or D. With a target of 5% of total staff for 6 points on the generic scorecard these are easy but very empowering points.
You may only use salaries for learnerships. The salaries of learnerships are allowed to be taken as a skills development cost. When going through verification ensure that you provide details of the learners salary to earn extra points. Salaries for other courses cannot be used for employees receiving training.
4. Excluding some training when calculating points:
Companies make the mistake of excluding training that could earn points under Skills Development. An example of this would be work-based informal programmes that take place at the workplace, such as training a new employee on how to use internal computer systems (such as Excel or EconoBEE V3). Companies overlook this but in actual fact this is a type of training, which probably happens in all companies which can earn valuable points on the BEE scorecard. With that said, companies need to note that only a maximum of 15% of the total training spend can be considered as informal training spend.
5. Omission of the Adjusted Recognition for Gender:
Companies may make the error of omitting the adjusted recognition for gender in the calculation of Skills Development points. The Adjusted Recognition for Gender is a formula that basically says that, in order to obtain the full points allocation for Skills Development, 50% or more of the people trained need to be black women.
Keep a look out for more of the reliable and quality advice offered by EconoBEE. Alternatively, visit their website at http://www.econobee.co.za/ or contact one of their professional consultants at 011 483 1190.