A practical guide to scoring well on skills development

Skills development is one of the three priority elements of the B-BBEE scorecard, alongside ownership and enterprise and supplier development. Under the Generic Scorecard it carries up to 20 points, plus bonus points. If you fall short of the 40% sub-minimum (8 points out of 20), your overall B-BBEE level drops by one level. For many businesses that means weaker standing with customers, and in some cases lost contracts.

What catches companies out is that the element has conditions before it has targets. Training can be excellent and well funded and still not count, because the SETA paperwork that the Codes require was never in place. So scoring well is first a question of doing things in the right order, and only then a question of where the money goes. This article follows that order. For the detail of how each indicator is measured, see our explainer on how the skills development scorecard is measured.

What the element rewards

The element looks at how seriously a business invests in training and developing its people, with a focus on Black employees and unemployed Black people. It covers spending on training for Black employees and unemployed Black people; bursaries for Black students at higher education institutions; learnerships, apprenticeships and internships, which combine theory with practical, work-based learning; training for Black employees with disabilities, designed to support inclusion; and absorption, the extent to which learners are employed once they finish their programmes, which is where the bonus points sit.

Beyond the score, good skills development raises productivity, helps close skills shortages in your sector and makes you harder for competitors to out-hire.

Step 1: register with the right SETA

Your business must be registered with the Sector Education and Training Authority (SETA) that covers your industry. A professional services firm would fall under the Services SETA, for example, and a manufacturer under merSETA. Without registration, your training will not count towards your scorecard, however much of it there is.

• Identify the correct SETA using the Department of Higher Education and Training's list of SETAs.
• Complete the registration requirements, including your company details and payment of the skills development levy (1% of the total salaries you pay, under the Skills Development Levies Act; employers whose annual payroll will not exceed R500 000 are exempt).
• Talk to your SETA about sector skills priorities and funding, including discretionary grants for training programmes.
• Keep your registration up to date when your structure or operations change.

Registration opens funding as well as points. A manufacturer registered with merSETA, for instance, could access grants to fund apprenticeships for Black youth in scarce skills such as welding or CNC machining, and that would earn points for both skills expenditure and learnerships.

Step 2: submit your WSP, ATR and Pivotal Report

Three documents go to your SETA. The Workplace Skills Plan (WSP) sets out the training you plan for the year. The Annual Training Report (ATR) records what you actually delivered. The Pivotal Report covers professional, vocational, technical and academic training that leads to a qualification or to employment. The Codes require a SETA-approved WSP, ATR and Pivotal Report before your skills development efforts can be recognised, so these are a gate, not a formality.

The Codes also require you to implement priority skills programmes, particularly for Black people, before you can score. That makes the plan worth building carefully:

• Run a skills audit to find the gaps in your workforce, and align the WSP with your business goals and B-BBEE targets.
• Focus on priority and scarce skills in your sector.
• Submit on time (the SETA Grant Regulations set 30 April each year) and in the format your SETA requires.
• Use the Pivotal Report to show learnerships, bursaries and internships that lead to formal qualifications or jobs, especially for Black employees and unemployed Black people.
• Record expenditure, participant demographics and outcomes as you go. It makes verification far easier.

A retailer might build a learnership in retail management for Black employees into its WSP, using a qualification registered on the National Qualifications Framework (NQF). Documented properly in the ATR and Pivotal Report, it counts towards both skills expenditure and learnerships. The same learnership, delivered but missing from the reports, is far harder to defend.

Step 3: put your money into critical skills

Only once the conditions are met does the spending question come in. Aim your training budget at the priority, scarce and critical skills named in your SETA's Sector Skills Plan or the National Skills Development Plan. That helps your score and your operations, because you are training for the skills your industry is short of.

• Read your SETA's Sector Skills Plan to see what is needed, such as data analytics in financial services or renewable energy skills in engineering.
• Direct a meaningful share of your training budget to those skills. The scorecard target is 3.5% of your leviable amount (broadly, the payroll you pay the skills levy on) on learning programmes for Black people, including unemployed Black people, with separate targets for bursaries (2.5%) and for Black employees with disabilities (0.3%).
• Mix formal qualifications (NQF-registered courses), learnerships and short courses, so you cover immediate needs and longer-term ones.
• Give priority to Black employees, including Black women, and to Black employees with disabilities. The targets are split by race and gender in line with the economically active population, and disability has its own indicator.
• Use accredited training providers so that your programmes meet SETA and B-BBEE standards.

A technology company could, for example, run a coding programme for unemployed Black youth in scarce skills such as Python or cybersecurity. If the programme is a registered learnership or internship and participants are then employed, the company can also earn absorption bonus points.

Habits that keep the score up

Favour structured programmes. Learnerships, apprenticeships and internships are weighted heavily, so choose programmes that lead to NQF-registered qualifications and take in unemployed Black learners. Plan for absorption by deciding in advance which roles learners can move into; our article on what absorption means for your skills development score covers this in detail.

Ask staff what training they need. The programmes will be more relevant, people engage more, and the WSP expects employee consultation anyway. Keep records of spend, participants and outcomes as you go, and use a skills management system if volumes justify one, so you are audit-ready without a year-end scramble. And choose programmes that also serve the business, whether that is productivity or entering a new market.

Done this way, skills development is also a contribution to the country. When you upskill your workforce and take in unemployed learners, you help reduce unemployment and ease skills shortages, and you build a reputation as a responsible employer. That reputation tends to outlast any single scorecard result.

If you would like an honest view of where your skills development stands today, or help drawing up a plan, write to us at sales@bsvision.co.za. We are happy to talk it through.