Part 1: Medium-sized companies are leading transformation
This year’s Sanlam Gauge Transformation Report released statistics on who is doing B-BBEE best, categorised by scorecard elements, company size and industry. These insights aid in understanding where and how your company can be more competitive in relation to these categories. This week’s blog is unpacking transformation leaders by organisation size.
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.
Company size analysis
Medium-size companies are ahead in the overall B-BBEE contribution level score, achieving 82.8% of the target, ahead of large companies (81.7%) and small companies (77.5%). These companies are also ahead of the others in terms of the Black Ownership and Management scorecard element. Large companies, on the other hand, lead in both the Skills Development and Socio-Economic Development elements.
Small companies “tend to rely on external consultants or wait until verification time to discover what their gaps are, which is generally too late” (Lerato Ratsoma, MD of Empowerdex). They struggle more with attaining good scores as they are less likely to have internal resources dedicated to managing their scorecards. Despite this, small companies that do participate in B-BBEE are performing very well in the Enterprise and Supplier Development scorecard elements.
The fact that medium-sized enterprises are leading transformation is a huge win for the country. We know that employment and SME creation are inextricably linked. Participating in B-BBEE renders an organisation more competitive in the SA business landscape. If medium enterprises are winning contracts and doing well, they can grow and create more employment.
B-BBEE policies can be used as a growth strategy and to capitalise on available opportunities. YES offers a way for companies to level up while creating real, broad-based change that surpasses a “tick-box exercise”. Companies of any size can participate in YES, boost their B-BBEE scores and contribute to a future that works. Click here to calculate your target and become a part of the movement.
Want to know more? Keep an eye out for part two of YES’s Transformation Report Analysis.
Amendment to the Gazette