In this week’s blog, we delve into the nitty gritty of how the YES B-BBEE Level Up benefit can help your business thrive.
What is B-BBEE?
Strategic broad-based black economic empowerment (B-BBEE; also known as BEE) management offers business immediate and long-term benefits for those companies willing to embrace it with a holistic and innovative mindset. Good B-BBEE standing can open the door to new clients, contracts and funding opportunities and build a future-focused economic environment by helping address the socio-economic and structural inequalities (read our blog on the role B-BBEE plays in transformation here).
Is YES a part of the B-BBEE scorecard?
The YES B-BBEE Level Up Benefit is an element that sits outside of the B-BBEE scorecard, however, participation in YES and receipt of level up(s) is dependent on points on the scorecard. In other words, your business needs to be active in B-BBEE and meet certain sub-minimums in order to change lives and benefit. This blog will take you through what YES does, how to work out your target, and demystifies the B-BBEE element of YES.
What is the B-BBEE scorecard?
The B-BBEE scorecard is a transformation tool driven by compliance. A firm can receive points, improving their levels, based on five elements on the B-BBEE scorecard: Black Ownership, Management Control, Skills Development, Enterprise and Supplier Development (ESD), and Socio-economic Development. For the purposes of this blog, you only need to worry about Black Ownership, Skills Development and ESD, which are the three priority elements in which your business needs points to participate in YES.
But first, how to calculate your YES target:
YES helps businesses gain up to two levels up on their B-BBEE scorecard in return for placing youth into critical 12-month quality work experiences (either in their own business, or externally through our Turnkey Solution). The amount of work experiences a business needs to create is based off the higher of three calculations:
Calculate your target here using our web-based calculator.
At the end of the 12 months, companies must absorb at least 2.5% of youth on their programme to receive their level up. If you double your target and absorb 5% of youth, you may receive two levels up.
Find out about our packages and pricing here.
Does my business qualify for YES?
Even with limited or no Black Ownership, your business can qualify for a YES Level Up. Multinationals and family-owned businesses with no Black Ownership can make up for it with higher ESD and Skills points and participate meaningfully in B-BBEE.
All you need is to meet the sub-minimum for your category.
Generic Enterprises
Generic Enterprises are classified as businesses that earn a total revenue above R50 million.
To participate in YES, Generic Enterprises must meet one of the following sub-minimum requirements:
1) They need to either achieve a 50% average across three priority elements (Black Ownership, Skills Development and Enterprise and Supplier Development), or
2) They must achieve 40% of their sub-minimum requirements in the same priority elements.
How to work this out:
- Option 1: 50% average across three priority elements:
Essentially, Generic Entities must meet a minimum of 50% of targets in the three priority elements listed above.
For Black Ownership, the total target is 8 points. For Skills Development, the total target is 20 points. The total target for ESD is 40 points, bringing the total to 68 points.
To participate in YES using this sub-minimum, a Generic Enterprise must achieve a minimum of 34 points (68 x 50%) across these elements.
- Option 2: 40% of sub-minimum in priority elements
For this sub-minimum, you must have reached at least 40% of each priority element target.
Because the total target for Black Ownership is 8 points, to participate in YES under this sub-minimum, your generic enterprise would need a minimum of 3.2 points in this priority element (8 x 40%). Likewise for Skills Development (total target = 20 points), your generic enterprise would only need to have achieved 8 points in this priority element (20 x 40%).
The third priority element needed under this sub-minimum, ESD, is broken down into three sub-elements:
- Preferential Procurement (25 points x 40% = 10 points needed)
- Supplier Development (10 points x 40% = 4 points needed)
- Enterprise Development (5 points x 40% = 2 points needed)
- Therefore, a total of 16 points is needed under the Enterprise and Supplier Development element
Remember, this is not an average, and your generic enterprise needs to achieve all these minimums in either the Black Ownership + Skills Development combination, (Option 2a) or in the Black Ownership + ESD (Option 2b) element, if you would like to participate in YES under this sub-minimum.
What do these sub-minimums mean for Generic Enterprises?
These sub-minimums show that even with limited or no Black ownership, your generic enterprise could still participate in YES, change lives and receive your B-BBEE level up(s).
Qualifying Small Enterprises (QSEs)
QSEs are classified as businesses that earn a total revenue between R10 million and R50 million.
Other
If you’re an Exempted Micro Enterprise (total revenue below R10 million), an enterprise within the transport sector, or a public/specialised entity, there are no sub-minimum eligibility requirements to participate in YES.
B-BBEE is a useful tool for country transformation and company success
B-BBEE legislation was implemented as a vehicle to effect socio-economic and structural change within the private and public sectors, as well as in the broader communities they operate in. It is one of the methods through which a business can begin to totally transform.
True macro transformation, however, goes beyond B-BBEE, beyond the office and beyond the micro-environment – requiring holistic, collaborative systems thinking, in order to be achieved.
Using B-BBEE well and strategically can help your business stay competitive and can begin to transform the business and socio-economic landscape of the country, creating a thriving future that works for all.
Many companies are now using the YES programme as a talent pipeline to find talented gems to which they wouldn’t have access otherwise – ensuring fresh and diverse perspectives become the heart of their business.
Join the movement, calculate your target now.
YES is business-led collaboration that seeks out groundbreaking ways, through innovation and technological best practice, to reignite the economy and give youth a dignified first chance. Together with our 1,660+ corporate partners, YES has already created over 65,000 work opportunities for youth in just over two and a half years. This translates to R3.7 billion injected into the economy through youth wallets.
The YES 12-month quality work experience equips unemployed youth with a toolkit to be a beacon of hope for their families, households and communities. The CV & reference letter they get at the end of their 12-months gives them a 3 x greater chance of an interview call-back.
Amendment to the Gazette