Will the revised BBBEE Codes impact CSI approaches to skills development and education?

The Revised BBBEE Codes of Good Practice require companies to spend 6% of payroll on skills development in order to obtain the 20 points assigned to this element (there are also five bonus points), compared with the previous 3% of payroll needed to obtain 15 points. The revised Codes also allow for training and education of unemployed black persons, which many companies currently do through their CSI programmes.

A Trialogue CSI Forum considered how the Codes might lead to a shift in the nature of corporate support and the manner in which contributions are internally categorised for skills development and education.


Why have the Codes been revised?

The South African Government spends 6% of GDP and over 20% of the national budget on education. Additionally, 49% (about R4 billion) of corporate social investment was spent on education in 2014. Despite considerable financial investment, significant challenges persist in the sector, including poor teaching capacity, infrastructure, and learner support and retention.

The country’s high rate of unemployment is another major challenge. Despite the creation of 1.1 million jobs in South Africa since the economic crisis of 2008/9, unemployment continues to rise as more people enter the working age group (15 to 65 years old). Unemployment stood at 26.4% in the first quarter of 2015, the highest level since 2003 when it was 30%. The revisions to the Codes place the emphasis on skills, not only for those already employed, but also for those making the transition to the workplace.

Corporate approaches noted at the forum

  • Deutsche Bank supports Sparrow Schools, an organisation that equips young people from disadvantaged homes, who have learning disabilities, with education and employable skills. Corporates can partner with the schools to promote skills development, as well as to earn the requisite BBBEE points. Deutshe Bank has also partnered with the Tertiary School in Business Administration (TSiBA), to offer a nine-month Theory of Change Programme. The programme, which runs until February 2016, currently supports 25 non-profit organisations to think about alternative means of income-generation, while also providing students with workplace experience. Discovery has partnered with the Umthombo Youth Development Foundation, to support youth from rural areas to pursue a qualification in healthcare. Jointly with the City of Johannesburg (CoJ), Discovery is facilitating the implementation of the skills development programme in Orange Farm. This is in support of the CoJ’s Jozi@Work Programme, which is expected to create 40 000 new jobs by 2016.
  • Sanlam’s Vacation Camp is a short business course offered to about 50 learners from different universities. About 10 of the participating students are employed by Sanlam upon graduation. Sanlam also offers consumer financial education. Thirty percent of spend on this initiative is directed at communities, including unemployed people, and 70% at work sites, which are often identified by Sanlam business. Sanlam also partners with a number of universities to train graduates to become financial advisers.
  • Virgin Active’s Future Crew Programme, which initially donated gym equipment to schools, now also trains learners and members of under-resourced communities to become accredited coaches through the Exercise Training Academy. Once qualified, they are either employed by schools or absorbed into the business. In terms of enterprise development, community members can train to become fully qualified dance instructors, and start their own income generating studio.

Winning strategies

  • Companies need to consider how close their skills development interventions are to their business objectives, and align these accordingly.
  • CSI is ideally placed to consider skills for unemployed people which, if aligned with human resource requirements, can serve to create a future pipeline of staff/employees with skills in specific sectors.
  • Companies should review all education and skills development spend and assess each initiative to establish whether it could qualify as socio-economic development (SED), economic development (ED) or skills development. If a company is over-scoring on SED, for example, some of those initiatives might qualify to be re-categorised to secure scoring in another sector, such as skills development.