Say YES to greater BEE benefits

By Motlhago Ramoba, Empowerment Advisor at Mindworx Consulting

When Cyril Ramaphosa addressed the country for the first time as president he used the words ‘Thuma Mina’ made famous by Hugh Masakela’s song of the same name. ‘Send me’, he said. When President Ramaphosa launched the Youth Employment Service (YES) network earlier this year, the words of the song resonated for us.

YES aims to address socio-economic challenges faced by South Africa’s youth, particularly the dark cloud of unemployment. And it is a dark cloud even for candidates with tertiary qualifications, not least because they can’t afford the costs involved. Looking for a job is expensive, from accessing the internet, travelling to and from interviews, making follow-up calls and dressing well.

Thuma Mina describes the fact that YES is intentional, a partnership between government, business, labour and civil society that is setting out to transform the lives of more than one million young South Africans (aged 18 – 35) over the next three years. This is the first time the public and private sectors have come together for the purpose of transformation and that’s a very big deal. It will not be an easy journey but at least it has begun.

YES was announced with over 100 South African companies signed up to the initiative. Currently unemployed youth will either be offered economic pathways into the economy through one-year paid positions in the corporate world, or through a small business development programme where they will be empowered to start and grow their own businesses through training and funding.

Strategically, YES is aligned with the B-BBEE Codes of Good Practice which will be amended to incentivise participating businesses in a move that should have a positive impact. It enables and encourages employers to spend on the large and marginalised group of youth in South Africa who are not in employment, education or training, most of whom do not have matric certificates. In short, it opens up the economic pathways into the economy which they have lacked up to now.

Here’s how the YES initiative aligns with the B-BBEE Codes of Good Practice

Qualifying criteria

• 40% sub-minimum in each of the priority elements of the scorecard (ownership, skills and ESD) or 50% across the three priority elements
• YES is cumulative meaning businesses must maintain or improve previous BEE status level before participating in YES on YES
• Entities must score full points on 2.1.1.2 which relates to bursaries for black students attending higher education institutions
• The target ring-fenced for scholarships and bursaries must constitute 2.5% of company payroll

Skills development spend for YES

Entities will be able to claim up to 50% of skills spend on YES Youth in categories F and G on the learning matrix (informal, industry-led, non-accredited training), up from 15%.

Calculating YES headcount targets

The YES target for companies with over R50 million annual turnover is determined as the greater of:

• 1.5% NPAT/R55,000
• 1.5% of headcount
• The value in the company turnover band in the table below

Large company turnover-based targets

If you’d like more information on the YES initiative in context of BEE, please contact our Empowerment Advisory team on +27 11 484 4747.