Managing
for a robust business A clear strategy, flexible business model, nimble mindset and stringent risk
management are key imperatives for
businesses to remain robust and sustainable
in today’s volatile and competitive economic environment, says African Oxygen Limited (Afrox) Managing Director, Schalk Venter. “Companies that previously used to rely solely on economic forecasts and projections have learned to respond in a far more agile way to market changes, with flexible structures to focus on growth areas and opportunities, hands-on management, and a clear understanding of risk and response. “One of the main threats to businesses today is unidentified risk, and a core management skill has become the ability to focus on identifying, understanding and managing underlying risks before they impact the business,” says Venter. Venter leads a business in the toughest of environments – the volatile and unstable emerging markets of sub-Saharan Africa. This year Afrox celebrates 92 years in business, operating in eight African countries and employing more than 2 000 staff. The company manages five more African operations on behalf of its parent, Linde plc. Afrox’s customer portfolio is a litmus of South Africa’s business and economic health, supplying heavy and light industry,
steel producers, mining,
emerging growth areas and pulling back from
fabrication, construction,
stagnating or shrinking market sectors where
automotive, agriculture, fast
needed.”
and frozen foods, healthcare and hospitality, to name a few markets.
In under four years, Venter and his management team took Afrox’s share price from a low of about R11 a share to over R30
“In Africa, risk and the
going into 2019. Said Venter: “Businesses
management of risk is no
will also find value to focus on continuous
stranger to us,” confirmed
performance improvement to deliver
Venter, pointing to JSE-listed
shareholder value and to ensure sustainable
Afrox’s operationally strong, structurally
re-investment in the business. The economic
sound and healthy position going into 2019.
environment of no or low growth and
A focus on three key business segments –
high inflation is not conducive to stimulate
Atmospheric Gases, LPG and Hard Goods
earnings growth for companies.
– has provided a timely clear line of sight of performance, risk management and cost control.
“This means re-aligning of the cost base and portfolio optimisation, containing costs through constantly assessing customer
In the first quarter of 2019, South Africa’s
requirements, staffing, assets, risks and
economy shrank by 3.2%, followed by
adjusting budgets accordingly.”
forecasts of yearly growth hitting ten-year lows and talk of recession pushing Africa’s most industrialised nation to the brink of investment junk status.
Safety, integrity, inclusion, accountability and community are the values which govern and drive behaviours and decision making in Afrox. These are key factors in achieving
“Our determination to weather the economic
quality growth in the strategic markets of
storm and still deliver results that reward
atmospheric gases, healthcare and LPG,
shareholders extends across our business,
confirmed Venter.
management, and white- and blue-collar staff alike,” said Venter. “The rightsizing steps we took in 2015 and in 2018 are tangible reflections of a performance-driven business in touch with risk forecasting; reading the economic signs for what they are, not what we’d wish they were, identifying the
Today, Afrox, a B-BBEE Level 2 rated business, supplies the entire South African healthcare service, including more than 400 hospitals and 1 600 clinics, with medical gases and new technologies, like the Linde Integrated Valve®.
African Oxygen Limited (Afrox) Managing Director, Schalk Venter
Investment in cost containment will continue
and nurture targeted distributors and service
“Managing a successful and modern business
with the rollout of digital cylinder tracking
providers in the growth target markets of
in Africa requires commitment from everyone
(Afrox has a stockpile of millions of cylinders
healthcare and LPG.
in the company and the ability to adapt to and
of different sizes for a multitude of gases and scientific mixtures), e-channels, telesales, digitalisation, on-site buying, outsourcing and, importantly, training and safety.
“These small to medium enterprises have now become part of the fabric of managing our costs, expanding our reach and increasing customer service response,” said Venter,
In South Africa, companies are expected to
“and, equally, are increasingly essential to
add societal value through empowerment
South Africa’s and our mid-term economic
of previously disadvantaged businesses and
growth.”
individuals. Afrox’s response was to kick-start
Contact: Communication Department on Tel: +27 11 490 0400
www.afrox.co.za
mitigate a multitude of risks, be it economic, political, cultural, civil or environmental. With risk of course comes opportunity, and I believe the Afrox team clearly understands these risks, and opportunities and will continue to respond with a robust flexibility that spells success as a result.”
10 SIYAYA SKILLS INSTITUTE
WELCOME TO ABC OF BEE 2019/20
The Effect of the Latest Amendments to the Codes 14 ALICORNIO AFRICA
The Good, The Bad and The Ugly of Business Intelligence 16 JDM PLACEMENTS
Disability - The Misconceived Terrain
South Africans predicted 2019 as a year of speculation with echoes into political, social and economic debates. The turbulent politics of state capture caused many sectors of the country to fall into corruption, mismanagement, collision and misdirection.
18 DEBT RESCUE
The fall of international firms associated with this sort of state capture included audit firms, MPs and of course the alleged involvement of the presidency. The currency has been volatile for many years, however the cabinet reshuffles that have taken place (twice) this year have left the rand gasping for help. Amidst the upheavals in these sectors, the larger narrative should always be pursued..
22 REGENT BUSINESS SCHOOL
Business leaders are, conceivably better positioned to respond with helpful approaches to realign and restore a balance in the country. The need to create transparent, transformative, real and meaningful connections is more pressing than ever. Obligations exist in the forms of BEE legislation, and small and large companies have an ethical duty to share resources and opportunities that the country rightfully deserves. This is the only method that will ensure a rainbow nation that all South Africans can be proud of. In these pages, you will find myriad ways to consolidate the changes you may have made and to explore changes you have yet to implement. We offer you the opportunity to uncover a comprehensive mix of thought leadership, service providers, empowered companies and much more. Our aim in this year’s edition of the ABC of BEE is to remember that we should focus on a more inclusive narrative to see a better future for all.
Working Class To Suffer Under New Debt Relief Bill 20 EATON SOUTH AFRICA
What Does A Low-Carbon Policy Future Look Like? How Business Schools Can Prepare Students For Employability 26 SKILLS DEVELOPMENT CORPORATION
Skills Development In The Emerging Fourth Industrial Revolution 30 LFP GROUP
Under Pressure - Pressure As 2020 EE Reports Deadline Looms 32 TRAVERSE ADVISORY
Unlocking Real Economic Transformation in South Africa 36 BEE CONNEX
Socio-Economic Development To Bolster Your Business 38 BEE CONNEX
Trends, Tips and The Future of Enterprise Supplier Development 40 TRIOPLUS DEVELOPMENT
Enterprise Development - Beyond the BEE Scorecard 42 LFP TRAINING
Tackling Unemployment Through The YES Movement 46 JUST
Don’t Settle For A Retirement Income That You Can’t Afford 48 MAURICE KERRIGAN
Teaming For High Value Negotiators 50 KOIKANYANG INCORPORATED
The Jurisprudence of Remote Piloted Aircraft Systems Is South Africa Ready?
Jennifer Potter Cold Press Media Director
54 AFROX
Afrox Kick-starts Black-owned Start-ups 58 ARTISAN TRAINING INSTITUTE
Corporate Training Centres - To Keep In The Books, Or Not?
Copyright © ABC of BEE & HR Essentials is published by Cold Press Media (Pty) Ltd for Tiso Blackstar Group (Pty) Ltd. Copyright Cold Press Media. All rights reserved. Reproduction in whole or part is prohibited without prior permission of the publisher. Opinions expressed do not necessarily reflect those of the Board of Management of Tiso Blackstar Group (Pty) Ltd. All correspondence about ABC of BEE should be directed to Cold Press Media.
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IN-HOUSE LEARNERSHIPS
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SDF CONSULTING
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0861 11 9904
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info@siyayaec.co.za
ADVERTISING
DOCUMENT STORAGE
Out of Home Solutions ................................................ 11
Document Storage ...................................................... 21
BEE SOFTWARE
EDUCATION
BEE Solutions Provider ............................................ 12
Business School ............................................................ 23 Executive Education ............................................ 24, 25
BEE TRAINING & VERIFICATION Skills & Development Training .................................. 5
ENGINEERING Facilities Management .............................................. 27
BUILDING & CONSTRUCTION Infrastructural Engineering ....................................... 13
ENTERPRISE DEVELOPMENT Business Incubators ....................................... 64, 65
CHANGE MANAGEMENT Consulting & Training ................................................. 15
Chartered Accountants .......................................... 35 Enterprise Development ................................. 33, 39 Enterprise Development Training ........................ 41 Skills Development ............................... 1, 28, 29, 43
DEBT COLLECTIONS Collections & Management Services ...................... 17
DEBT RESCUE Debt Rescue .................................................................. 19
Skills Development & Enterprise Development . 37
EVENTS PRODUCTION Events Production .................................................. 44
OIL & GAS / PETROLEUM
SUSTAINABLE EXPLORATION AND DEVELOPMENT OF OIL & GAS Petroleum Agency SA aims to promote and regulate oil and gas exploration and production in South Africa.
e encourage investment in the oil and gas sector by assessing South Africa’s oil and gas resources. Our team of geoscientists study existing data to indentify prospective resources which are presented to investors at local and international conferences and exhibitions. Our role is to ensure understanding of regulatory regimes of our country and to advise government in the formulation of regulations that are in line with international norms. ENVIRONMENTAL MANAGEMENT
CORPORATE SOCIAL RESPONSIBILITY
Protecting our environment is very important to us, therefore, compliance with all applicable legislation needs to be in place. Rights cannot be granted unless we are satisfied with the environmental management plan. The Environmental Management Programme process requires public consultation and a clear demonstration that valid concerns will be addressed, and must satisfy both provincial and national authorities.
Corporate Social Responsibility at Petroleum Agency SA is the demonstration of the values of our orginisation. The initiative of Petroleum Agency SA’s corporate social responsibility is to improve the qualify of life of historically disadvanted South Africans through skills development and educational programmes with an emphasis on youth.
We are deeply committed to conducting business in a socially responsible way. It is important that we contribute to establishing a foundation of skills required for our industry as well as our country. In order to achieve this we focus on educational projects that promote Maths, Science and Technology. Petroleum Agency SA has an interest in the lives of the South African community at large.
ABOUT PETROLEUM AGENCY SA Petroleum Agency SA, a South African state-owned company established through a Ministerial Directive issued in 1999, is mandated with providing effective and efficient regulation, encouraging investment, fostering diversity, protecting public interest and ensuring a level playing field within the upstream oil and gas industry. Since its inception, the Agency has emerged as the only regulatory body of the upstream oil and gas industry, keeping watch over this strategic and critical industry in South Africa.
Tygerpoort Building, 7 Mispel Street Bellville, Cape Town, South Africa, 753 Contact 021 938 3500 | www.petroleumagencysa.com
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 7
FINANCIAL SERVICES
MINING
Accounting Services .............................................. 45
Mining .............................................................................. 55
Banking ...................................................................... 9
OIL & GAS HUMAN RESOURCES
Gas Supplier .......................................................... 2, 3
Payroll & Human Resources Software ................. 47
Petroleum .................................................................. 7
Recruitment & Placement .................................... 49
PAYROLL SOFTWARE INSURANCE
Payroll Software ...................................................... 56
Insurance ................................................................ 66
PROPERTY LEGAL
Property ................................................................... 57
Legal Audit ................................................................ 51
SKILLS DEVELOPMENT MANAGEMENT CONSULTING
Business Skills Training .......................................... 59
Management Consulting ....................................... 53
TRAVEL MARKETING Design & Advertising Specialist ............................ 52
Events ....................................................................... 63 Travel Agency .......................................................... 61
23295
LEVEL 1 B-BBEE CONTRIBUTOR STATUS, A MILESTONE IN NEDBANK’S TRANSFORMATION JOURNEY. When we set our sights on becoming Africa’s most admired financial services provider, it was not merely a lofty ideal. We aimed to make a meaningful, tangible difference to the lives of all we reach in every sphere of our business, thus embodying the true meaning of ‘see money differently’. A key factor in achieving this, a driving force that enables us to keep rising towards our ideal, is transformation. Nedbank has long recognised that sustainable transformation is vital in remaining relevant in the constantly changing societies in which we operate, and that transformation supports business as well as national strategic priorities. This long-term vision enabled us to maintain a Level 2 B-BBEE contributor status for ten consecutive years as we laid the foundations to take the next step.
It now brings us great pride that this continuous commitment to ongoing transformation has culminated in Nedbank being awarded its Level 1 B-BBEE contributor status for FY 2018 under the Amended Financial Sector Code (FSC), gazetted in terms of Section 9(1) of the B-BBEE Act 53 of 2003. We at Nedbank wish to thank all those whose contributions made this significant achievement possible. We pledge our continued effort in collaborating with business, government, labour and civil society to address the ever-greater structural socio-economic challenges faced by our country, with the ultimate goal of improving the lives of all South Africans in a prosperous, successful South Africa.
see money differently Nedbank Ltd Reg No 1951/000009/06. Authorised financial services and registered credit provider (NCRCP16).
The Effect of the Latest Amendments to the Codes By Siyaya Skills Institute
In an ever-changing environment, it is up to B-BBEE consultants to provide clients with sustainable transformation solutions. Most clients need to answer to shareholders who are looking for returns and the challenge is to provide these clients with solutions that push the boundaries of what is possible.
TSC is gazetted, it will be effective since there will be no transition period.
iyaya Skills Institute is therefore always looking for solutions that not only achieve the compliance levels required, but also do so at a lower cost than its competitors.
“There is no timeline for when changes will come into effect, but it is inevitable and therefore the Financial Sector should start gearing themselves and budgeting for the Bursary expenditure.”
The latest amendments that came into effect on the 31st of May 2019 affected the framework of the B-BBEE Codes including the Skills Development element, the Enterprise and Supplier Development element as well as the definitions of the Codes. These changes would affect any entity that gets a B-BBEE certificate on or after 1 December 2019. Interestingly, not all Sector Charters are affected by these changes until they are amended. These include QSE Codes, Tourism Sector Charter, Marketing/Advertising and Communication Sector, Information and Communication Technology Sector, Forestry Sector, Property Sector, Construction Sector, Financial Services Charter (FSC), AgriBEE, Mining Sector Charter and Defence Sector Codes. The Tourism Sector released the amendments for public comment on 27 September 2019. In the draft version, the Tourism Sector Charter (TSC) has also removed the option of using the modified flow-through principle when using an affidavit. The ability and the method used for the verification of Joint Venture was added to the TSC. When the
In this light, the Financial Sector Codes will need to align their charter too. There is no timeline for when the changes will come into effect, but it is inevitable and therefore the Financial Sector should start gearing themselves and budgeting for the Bursary expenditure. Siyaya engineers solutions that are satisfactory to the verification industry and customises these according to the client’s specification.
For the Skills Development element, the targeted expenditure on training programmes is now 4% of the leviable amount for one additional point. The Scholarships and Bursary expenditure has added 5 points at a cost of 3% of the leviable amount. Persons with disabilities have lost 1 point at the same required expenditure. Black people on Category B, C or D training have lost 5 points for 0.5% reduction in the headcount targets. One point is added to absorption tallying up to 26 points. The expenditure on internal and uncertified training has increased to 25%. Costs for Skills Development Facilitation and Training Managers does not apply to the Bursary expenditure required, however
“Interestingly, not all Sector Charters are affected by these changes until they are amended.”
10 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
the stipend for a Bursary candidate can now be counted. And lastly, all foreign training must be recognised by the South African Qualifications Authority (SAQA) in order for them to be used. In terms of the Preferential Procurement element, an additional point has been added to a Qualifying Small Enterprise (QSE). The example set by the general Codes has been followed with the points for 51% Black-owned entities increasing to 11 and the target increasing to 50%. It is rewarding to see the addition of the 2 Black designated group bonus points to the scorecard at 2% of the Total Measured Procurement Spend (TMPS). All suppliers that are 51% or more Black-owned receive a 1.2 factor to their expenditure. In addition, a large enterprise that is 51% Black-owned can receive points as a Qualifying Small Enterprise (QSE) and an Exempted Micro Enterprise (EME) for 5 years from the first date of procurement. Supplier and Enterprise Development has now included the calculation where the Net Profit After Tax (NPAT) or average target applies; unless the company does not make a profit the previous year or on average over the last five years; the Net Profit Margin is less than a quarter of the norm in the industry. If the turnover is to be used, the target will be set at 0.5% (Enterprise Development) or 3% (Supplier Development) x Indicative Profit Margin (NPAT/Turnover) x Turnover. Large enterprises that were assisted by the measured entity when they were EME’s or QSE’s have been included for Supplier and Enterprise Development as long as the beneficiaries make use of the flow-through principle and this assistance does not continue for more than 5 years. A Supplier Development beneficiary must form a part of the supply chain while an Enterprise Development candidate may not. Lastly, the amended Transport Sector Charter has not been gazetted to date, although it was issued for public comment almost three years ago (8 November 2016). Whilst there is much speculation as to why this Code has not been repealed, this sector is still being rated on the old Transport Sector Codes.
ADVERTISING / OUT OF HOME SOLUTIONS
governments and municipalities has unlocked pioneering technologies for citizens in Africa such as solar street lighting, automated traffic information systems, digital bus shelters, city information solutions, automated self-cleaning toilets, waste management and recycling innovations to make cities better.
URBAN SUSTAINABILITY FOR AFRICAN CITIES - a benchmark for global partnership. n 1964, Jean-Claude Decaux invented the advertising bus shelter. Fifty five years on, JCDecaux’s success still rests on its founding economic model; providing cities and transport companies with products and services financed by advertising space.
employees in eco-driving. The same goes for our street furniture; choosing materials responsibly, optimising the use of raw materials as resources during production, reducing generated waste, and reducing the amount of water that we use to clean these assets.
Achieving economic growth while respecting people and the environment is at the heart of our model.
The environments in which our street furniture is installed require extreme rigour in terms of safety for our teams as well as the people who frequent these transit sites. From working at heights, to road safety, and power safety, it is a priority of JCDecaux to continuously improve the working conditions of our teams and ensure the safety of all parties involved.
By giving local advertisers visibility, we are players in the local R36.6bn advertising market, stimulating economic growth. Royal Bafokeng Holdings, our strategic partner and 30% shareholder plays an active role in shaping the evolution of our business in Africa. Together we strive to operate as locally as possible, to be even closer to our partners, be they cities, transit authorities, or shopping malls. With a staff complement of 400 in 18 countries, only 4 are expatriates, underlining our commitment to transformation and belief in African talent. We contribute to local African economies by creating stable jobs in each country and strive to reduce inequality within and among countries. At JCDecaux, our concern for the environment is in everything we do. We have developed several methods to limit our energy consumption. For our new street furniture and roadside installations, we are systematically using LED lighting and, on our existing stock, we are going back and replacing older technologies. We are also seeking to reduce our fuel consumption by renewing our fleets of vehicles and training our
With Sub-Saharan Africa’s urban population doubling to 940 million in the next 25 years, JCDecaux is committed to making cities and human settlements more inclusive, safer, resilient and sustainable. Our investment, in partnership with
“With Sub-Saharan Af rica’s urban population doubling to 940 million in the next 25 years, JCDecaux is committed to making cities and human settlements more inclusive, safer, resilient and sustainable.” For over 50 years, we have supported small towns and major urban centres all around the world. Through our understanding of their concerns and our knowledge of their residents’ needs, we have become much more than the expert in outdoor advertising. Are also a trusted partner. Attentitive to the needs of cities and aware of the underlying trends, we are in constant dialogue with the countries in which we operate. That means we are able to share best practices all around the world.
“We are here to invest for the long-term, to grow local businesses in each market with local people, and to deliver excellent services to cities and excellent creative opportunities to our media partners.” Mark Cooper, CEO, JCDecaux Af rica
Building E, The Main Straight Office Park, 392 Main Road, Bryanston, Johannesburg, 2191 jcdecauxafrica.com | Contact 011 514 1400 | info@jcdecauxafrica.com
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 11
BUILDING & CONSTRUCTION / INFRASTRUCTURAL ENGINEERING
POWERING SOCIAL AND ECONOMIC GROWTH BY DEVELOPING SUSTAINABLE INFRASTRUCTURE igen is an African company invested in the future of Africa. Operating from seven local branch offices in South Africa, and from six regional offices in Botswana, Kenya, Ghana, Mauritius, Namibia and Tazania, the Group drives socioeconomic development through the provision of innovative, solutions-focused infrastructure in the agriculture, water, real estate, transportation, energy and health sectors across Africa. “Frankly, what we do boils down to ‘doing good while doing business” says Bigen CEO, Dr Snowy Khoza. “Wherever we build a railroad, a dam, a town or human settlement, a hospital or a port across Africa, we follow a strong policy of indigenisation and localisation, with a main focus on job creation, poverty alleviation, skills development and empowerment” Dr Khoza says. “We have seen how our business partnerships in many African countries have extensively benefitted all the stakeholders at multiple levels. The development impact of our infrastructure and engineering projects can be heard in the song of African women drawing water from a tap, from the laughter of successful entrepreneurs, and the rush of traffic along the roads that connects economies and cities. We see it in the smiles on faces of men, women and young people who return home from gainful employment on our projects.
We see it on dark nights when energy generation lights up towns and homes and hear it in the gush of water that brings life and wellness to communities. This is the sounds and sights of the impact Bigen has on the continent and this is how we Africa grow and realise its full potential.” Bigen understands that in this intensely competitive era of socio-economic and infrastructure development transformation, public and private enterprises alike need to partner with experienced and reliable service providers such as Bigen, who can offer synergistic benefits, joint value creation and practical solutions to address the continent’s economic challenges and support the achievement of its sustainable development goals by 2030. RECOGNITION AND AWARDS Bigen’s team of professionals has more than 200 years of combined knowledge and experience in creating development impact in the built environment. Over the years our efficient+ track record has been recognised with more than 50 prestigious industry awards which validate our good standing in the industry.
ABOUT BIGEN In recent years, after almost half-a-century of delivering customised infrastructure development solutions to clients all over the continent, the imperative of meeting Africa’s 2030 sustainable development goals highlighted the need to include and provide benefit for the communities on the periphery of Bigen’s projects. Recognising and responding to this imperative has embedded a social conscience into the essence of Bigen’s business, its purpose and how it works with and for the people of Africa. This inclusivity goes beyond commercial gain to addressing vulnerability, unemployment, exclusion and disempowerment. A philosophy of “doing good while doing business” is now ingrained in the Group’s corporate culture as a common purpose. As such Bigen’s projects have provided housing and related infrastructure to more than 50 000 families during the past year alone, access to basic health care for 1.2 million people, portable water to 1,5 million people, transport infrastructure to 30 communities, electricity to over 300 000 people and have created jobs for more than 40 000 people.
Bigen Africa Group Holdings Pretoria, South Africa | +27 (0) 12 842 8700 Bigen Global Ebene, Mauritius | +230 403 6000 md@bigenglobal.com | pretoria@bigengroup.com | www.bigengroup.com
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 13
THE GOOD, THE BAD AND THE UGLY - of business intelligence By Susan Andre, Managing Director, Alicornio Af rica
In modern business language, Business Intelligence is something of a misnomer. Does having access to more data or using the best technologies really make a business more intelligent? Also, we always hear bigger is better. Although it’s true that greater volumes of data and modern technologies do provide scope for richer analytics, it is not the only ingredient for a successful BI project. Spending big on acquiring the latest technologies might contribute to a superior environment well suited to dealing with large volumes of data. However, more data means more challenges in serving correct information to relevant business audiences.
“Spending big on acquiring the latest technologies might contribute to a superior environment well suited to dealing with large volumes of data. However, more data means more challenges in serving correct information to the relevant business audiences.”
THE BAD Data quality, security and data governance remains a huge concern and while technocrats will have us believe that the latest piece of technology will cure all information related pains, the reality is that no one size will fit all.
THE UGLY When Business Users struggle to obtain accurate information in the format they desire within the required timeframes, it is probably due to either ill-defined Business Requirements, poorly modelled DW schema or simply a lack of planning and knowledge. The solution? Bite-sized BI Implementation Whether it’s a brand new project or time to upgrade an existing data warehouse environment, it is best to take small steps towards achieving the big goal of becoming a data driven organization. Take caution against being hoodwinked by Cloud solutions, SaaS or other Big Data trends. The biggest contributing factor come from the business users being upfront and clear when defining their information requirements in conjunction with a skilled data warehouse project manager, who will orchestrate and scope deliverables based on business requirements -- addressing the objection of “no time to plan” efficiently.
Here are three smart ways to look at it:
FOR MORE INFORMATION:
THE GOOD
www.alicornio.co.za | info@alicornio.co.za Contact 011 513 4083
There are masses of data and incredible software solutions available.
14 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
CHANGE MANAGEMENT / CONSULTING & TRAINING
The Forgotten Part of BEE BEE implementation is a radical change in an organization. It affects changes in culture, attitudes, strategy and ultimately the bottom line. What organisations often fail to realise is that this is about changing individuals, throughout the organisation.
rosci® developed ADKAR® powerful models and tools that guide us in changing individuals. Created by Prosci’s founder Jeff Hiatt, ADKAR is a practical tool that supports individual and organizational change. ADKAR® is an acronym that refers to five elements that leaders need to build in their people for adopting change: • • • • •
Awareness of the need for change Desire to participate and support the change Knowledge on how to change Ability to implement required skills and behaviours Reinforcement to sustain the change
There is a sequence to this. Earlier elements should be built before building the next. While this appears logical - how could I desire change if I am not aware that I need to change - in practice this is not so. How many times have we seen an email on Monday asking people to attend training on Wednesday for the go-live of a change on
Friday? The organisation is building knowledge with little awareness and no desire to change, then expecting that the ability would instantly follow training, which rarely happens. Clearly, we cannot get the adoption or usage of the change at the rate we expect. If you consider that the organisation is really a group of individuals it follows that individual change is at the core of organizational change. Using ADKAR® in an organisational context provides the framework
and tools for managing personal transitions from the old way to the new. These tools focus conversations on what BEE means to me: Why do I need it? How will we get there? What is my role in adapting to it? If I am not yet there, this tool can help me diagnose what I need to change, or what corrective action must be taken to help me adopt this change. Achieving change, like BEE achievement, takes purposeful management of individual and organisational change.
ABOUT AND CHANGE Since 2007, and Change’s purpose is to help organisations and people change through the application of Prosci Training, Advisory and Consulting services. We guide teams through individual and organisational change applying a unique mix of experience, proven methods and research, with a personal touch. We offer global support through our nodes in South Africa, Italy, Turkey, Russia and the UK. We have many programs for all levels and roles in the organisation to plan, execute and deliver on changes. Explore the certification in the Prosci® Change Management Methodology with us.
14 Sylvia Pass, Linskfield, Johannesburg , 2190 info@andchange.com | Contact 011 485 2683 | www.andchange.com
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 15
DISABILITY - this misconceived terrain By Jacqueline De Mata, CEO, Joint Diversity Management Group
There is much misconception and preconception about disability. The general public has precious few reference points regarding what constitutes a disability unless it is visually apparent, or if they have personal interaction with a disability and thus don’t realise how prevalent it is in society.
t is estimated that there are well over 10 million people in South Africa living with disability - nearly 20% of our population. This demographic is comprised of those who are born with a disability, those that acquire a disability during their working age, and lastly, an aging baby boomer generation, 53% of whom will have a disability by the age of 65. About 2 million People With Disabilities (PWDs) in South Africa live in Gauteng, of which, it is estimated, a meagre 2% are employable. Employability in other provinces sits at about 3.5%. Despite PWDs constituting 20% of our population, they comprise less than 1% of the employed overall in South Africa. Less than 5% of people with disabilities have a matric, the basic requirement for entry-level employment in many instances. However, a generally unknown fact is that 80% of disability is acquired between the working ages of 18-64, rather than acquired at birth. In other words, people who are not born with a disability will acquire one after the age of 18, during their most productive years. The reasons why PWD are not considered as potential members of the national workforce are multi-layered and entangled – historic preconceptions invisibly anchor fear, myths and stereotypes within, giving rise to an almost wilful blindness where prejudice seeks refuge.
All these excuses create the attitudinal barriers PWDs face before they even get a foot in the door of a prospective workplace. To make matters worse, the disability sector does not have their own Act of Parliament making compliance essential and non-compliance punishable. There is no regulation of PWD employment, deployment or decent work in South Africa. No protection of their status in the same way that there is for Gender Diversity or indeed BBBEE. Yet, PWD’s comprise 20% of our population and at least 2% of the employable workforce.
“All these excuses create the attitudinal barriers PWDs face before they even get a foot in the door of a prospective workplace.” These statistics and on-ground-observations have certain implications in the actioning of recruitment and training of people with disability: •
•
“Reasonable accommodation is too expensive…” “It’s impossible to institute disciplinary action against PWDs…” “It’s too expensive for us to undertake structural changes to our building to comply with universal design…and for what? One person? “
16 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
•
The skilled employment pool of PWDs is much smaller than that of able-bodies, in stark contrast to the affirmative action, development and promotion implemented for other marginalised groups in our society. Any position ring-fenced for a PWD will inevitably have a longer closing cycle in the recruitment process because of extra layers of verification, the re-addressing of job specifications, discerning between essential and marginal functions, as well as considerations relating to reasonable accommodation. In many instances, an exact match may not be possible – specific and intentional training, within a developmental framework, offered by practitioners who are specialists in disability, is more likely to result in a return-on-investment on any Skill Development investment
•
•
made on-behalf of PWDs. That ROI will come but will certainly be more resource-intensive and inevitably take longer to realise. Having a mature and professional 3-5 year strategy is absolutely essential to succeed in becoming Disability Inclusive. Providing unemployed and unskilled People with Disabilities with the opportunity to bridge their skills gap through a development or learnership programme allows you to leverage the learned skills within the workplace through an internship, or an incubation period via the YES initiative. YES provides the time needed by both employer and employee to reveal actual potential and natural talents while at the same time giving insight into the goals and aspirations of the prospective long-term employee. The spirit of the relationship between the Employer and PWD needs to be seen by all as one of shared value creation, rather than pure compliance, and exploitation. Much time is spent by your internal teams, coaching, meeting deadlines and pushing PWDs to acceptable levels of work quality, which instils reliability and a professional workplace behaviour. Good working relationships are beneficial to all. It needs real commitment and a spirit of shared value and partnership between all parties.
This is the living act of inclusion giving-rise to the brand benefit to any participating company of being recognised as Disability Fair and Friendly.
FOR MORE INFORMATION CONTACT: jacqueline@jdmplacements.co.za | 072 607 0190
DEBT COLLECTIONS / COLLECTIONS & MANAGEMENT SOLUTIONS
VeriCred Credit Management Services is renowned for its reputation as a long term strategic partner, which delivers unparalleled results and renders a professional service to client and debtor alike.
eriCred makes use of the vast experience, knowledge and operational management of the VeriCred Group, which manages four different debt collection companies registered with the Council for Debt Collectors. VeriCred is a member of the ADRA (Association of Debt Recovery Agents).
ute to increasing cash flow on a monthly basis whilst also preventing accounts from moving into the older aging categories. We assist with implementation of policies and procedures in order to benefit our clients. Our processes are transparent and our clients have access to their information at all times.
INFORMATION TECHNOLOGY: • • •
VALUE ADDED SERVICES INCLUDE:
“For our key clients, we operate as strategic partners - not only assisting them with the recovery of outstanding accounts, but also as a partner that complements the value chain.”
Quality Assurance, Client Relations, Debt Review Accounts, Verify Deceased Accounts, Prescribed Accounts, Credit Bureau Data, Website Access, Data Analytics. EXCLUSIVE SERVICES OFFERED: Listing of debtors in a closed user group, legal services and client referral network. FOCUS AREAS: •
Even though we specialise in collecting large amounts, the collection of smaller handovers enjoys the same priority. For our key clients, we operate as strategic partners – not only assisting them with the recovery of outstanding accounts, but also as a partner that complements the value chain. This entails addressing internal inefficiencies and unsustainable practices, whilst maximising opportunities that exist in each business in handling of outstanding debtors books. Our vast experience in the debt collections industry coupled with input in internal processes and the development of a sustainable policy for our clients, ensure that our services contrib-
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Early handovers – this is key as it impacts directly on results yielded. Flexible communication methods based on debtor’s preference, i.e. WhatsApp and emails. Delivery of documents according to POPIA standards. Activation of debit orders to stop prescription. Acknowledgement of debt through voice recorded conversations.
•
We are able to process any type of handover format. We have a web portal where clients are able to upload their files if they do not have access to FTP protocols. We prioritise privacy and conduct our business accordingly by ensuring that all files which contain debtor information and account numbers are encrypted and access restricted via a zip file and password. Information confidentiality is ensured by means of SFTP servers which are aligned to POPIA requirements.
HOW DO WE COLLECT YOUR MONEY? We pride ourselves in the fact that we provide clients with an exceptional standard of service whilst leaving debtors with their dignity intact. Do not hesitate to contact us to make an appointment.
Let’s Connect, to Collect
VeriCred House 11 Goetz Street, Potchefstroom, 2531 info@vericred.co.za | Contact 018 294 1000 | www.vericred.co.za
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 17
Working Class to Suffer Under New Debt Relief Bill
By Neil Roets, CEO, Debt Rescue
The highly controversial debt relief bill has pushed hope into the arms of overindebted low-income earners and the unemployed. Nevertheless, consumers shouldn’t celebrate too soon. The bill may cause severe consequences for the working class… outh African’s have been struggling for a while to keep their heads above water. With rising unemployment rates, the continuous cost of living increasing and highly uncertain economic conditions, it’s no surprise that consumers have been using debt to make ends meet every month. Although debt counselling is a viable and highly successful option for struggling overindebted consumers, it cannot unfortunately cater to those who are unemployed. The debt relief bill was introduced to help relieve low earning and unemployed consumers with their unsecured debt. The debt relief bill has formally given power to the NCR to write off debt. It may be awhile before the implementation of this act can take place though, as the NCR is currently not equipped to deal with the processes it will have to cater for.
The bill was first briefed as a Debt Forgiveness program in 2016 and has since then been largely criticised by the Banking Association of South Africa and the Democratic Alliance.
Debt Rescue is one of the top debt counselling companies and has helped overindebted consumers all over South Africa get out of debt in an affordable manner for the past 11 years.
It appears that the new legislation is still highly misunderstood by consumers. With its sign off by president Cyril Rhamaphosa on the 13th of August, consumers everywhere are desperately hoping to get their debt written off. However, the new legislation will only take effect after all other measures have been exhausted. The new debt relief bill has created a false sense of hope for low earners.
Neil Roets, CEO of Debt Rescue comments that ‘The reality is, South Africans are highly over indebted. The way this act has been drafted will unfortunately cause more problems than actual relief.’ Lower earning, overindebted consumers may be privy to numerous unintended consequences as a result of the new bill.
Consumers who earn more than R7 500 per month and have unsecured debt above R50,000, will not be eligible. The bill will not be a beacon of light for the overindebted working class. Instead, it’s predicted to cause havoc for lower income groups when it comes to getting credit. And if they do, they will be heavily charged on interest and fees. In fact, several banks have already began changing their lending criteria so that many lower earning consumers will not have access to credit. This will cause a massive long-term implication with consumers resorting to unregulated credit providers to make ends meet.
“However, the new legislation will only take effect after all other measures have been exhausted. The new debt relief bill has created a false sense of hope for low earners.” 18 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
Neil Roets
DEBT RESCUE
EMPLOYEE FINANCIAL WELLNESS: Help your employees get out of debt There are currently 25.85 million credit-active South Africans and approximately 40% of them are struggling with debt. And this likely includes your staff.
mployee wellbeing is a vital part of a company’s success. It helps retain top talent and job performance. With so many consumers struggling to pay their bills every month, it’s only expected that the side-effects of having financial problems will leak into the workplace. People spend most of their time at work and their mental, physical and financial health will have a direct impact.
“Employers and HR management can make a significant difference to the lives of their over-indebted employees while increasing productivity and decreasing absenteeism.”
IS THERE A SOLUTION TO DEBT IN THE WORKPLACE?
Request your FREE digital booklet at: info@debtrescue.co.za
Financially stressed employees often don’t want their employers or co-workers to know that they are suffering financially. The first step is building employee awareness and opening the door for communication.
Please ensure you use the subject line “Employee Debt Awareness” to ensure we respond quickly.
There are various solutions available for over-indebted consumers. The most successful option available is debt review. Debt review will help your employees by reducing their monthly debt repayments while ensuring they can afford to live and their assets such as their home and car is protected. Debt Rescue has helped thousands of consumers become debt free since 2008. If you would like to build debt awareness in your company, we can provide you with a no cost to company customised digital booklet that you can share with your staff, allowing them to contact us discreetly.
Employers and HR management can make a significant difference to the lives of their over-indebted employees while increasing productivity and decreasing absenteeism. Promoting opportunities that will enable your team to engage in effective debt management is the first step towards financial wellness.
ABOUT DEBT RESCUE
WHAT SIGNS SHOULD YOU LOOK OUT FOR:
Debt Rescue assists consumers struggling with debt through the negotiation with Credit Providers for reduced payments and the restructuring of debts.
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Increased absenteeism due to stress related illnesses Productivity loss Increase in staff turnover due to staff seeking higher paying positions Garnishee orders Signs of potential company theft or fraud
We are dedicated to assisting our clients at every step of the way on their path to financial stability and operate across South Africa.
85 Friedman Road, Kempton Park P.O. Box 7241, Birchleigh, 1621 Contact 0861 123 644 | www.debtrescue.co.za
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 19
What Does a Low Carbon Policy Future Look Like? By Marcel Buckner, Business Development Manager, Eaton South Af rica
“We are undergoing an energy transition where a diverse technology ecosystem will lead to an improved energy market that fulfills the original intentions of carbon tax, and where consumers aren’t unduly compromised.” For carbon tax and environmental levies to have the desired impact of dramatically lowering the country’s reliance on carbon, a policy framework that enables private sector participation must also be adopted. This policy framework is required to allow new entrants to innovate and invest. Until recently, renewable energy was more expensive than sources like coal. Even with a strong carbon tax, thermal was more cost-effective per unit of generated electricity. Marcel Buckner
South Africa’s recently enacted carbon tax need not discourage new investment nor an added burden on already overstretched consumers. Marcel Buckner, Business Development Manager Sub Sahararn Africa at Eaton South Africa explains how the carbon tax, if coupled with policy and technological innovation, will lead to a cost-effective, reliable, and clean energy system. hen President Ramaphosa signed the carbon tax into law, the market responded with a sense of temporary relief, as the brunt of the cost will be deferred until the second phase of carbon taxes from 2023 until 2030. This reprieve is much needed. South Africa has some way to go before it significantly reduces overall carbon emissions. Today, less than a tenth of South Africa’s electricity is generated from renewables, and 91.2% of the country’s power comes from Eskom’s coal-powered stations.
20 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
However, the cost of renewable technologies has fallen to the point where investors find it more attractive to develop low-cost, flexible solutions, such as microgrids and smaller aggregated prosumer installations. These have a good return on investment when compared with traditional utility large scale power supply. We are undergoing an energy transition where a diverse technology ecosystem will lead to an improved energy market that fulfils the original intentions of a carbon tax, and where consumers aren’t unduly compromised. In this way, a carbon tax becomes an incentive for innovation, diversification and a competitive market rather than a punitive measure. Part of this transition will be to move to an effective and modern digitised grid, so the networks also needs to proactively focus on rapidly changing technology. Data and analytics hold the key to transforming businesses and will lay the groundwork for the Smart Grid of tomorrow, leveraging system intelligence to drive efficiency, reliability and productivity. This will in turn raise some new challenges. For instance, cyber security must be a key consideration for these new grids.
Ideally, carbon taxes should influence consumer behaviour, including responsible home use and fuel-efficient vehicles. Similarly, industrial entities and commercial buildings will upgrade to more energy efficient infrastructure while developers will naturally seek out low carbon options. We have reached the tipping point where renewables cost less than large generation. With proper policy and direction, we can keep costs down, create jobs and ensure reliable energy supply. This requires all stakeholders, including government, finance, and technology developers to work together and accelerate the energy transition. The carbon tax is not a burden - it is a signal that will lead to the fast-tracking of newer, flexible power generation and distribution methods to deliver a low carbon system that eases the burden on the state and empowers consumers while creating new jobs and economic growth in South Africa.
Eaton has been in Africa since 1927 with offices in South Africa, Kenya, Ivory Coast, Morocco and Nigeria, with 200k ft².of manufacturing space located in South Africa and Morocco. A certified BBBEE Level 1 contributor in South Africa, Eaton offers a broad portfolio supplemented by “made for Africa” products and solutions. Eaton has over 700 employees and numerous distributors across the region, allowing us the opportunity to help our customers grow and provide sustainable economic benefits to the communities in which we operate. For more information visit www.eaton.co.za
DOCUMENT STORAGE
THE FUTURE IS DIGITAL...
It’s Time to Future Proof Your Business - 8 Reasons Why You Should Digitise Your Business in fact less likely to get lost, damaged or stolen if they are digitally archived. Digital documents are also trackable so you will know exactly who has had access to sensitive information. You can also limit permissions for highly confidential data within your business. SUSTAINABLE Since the bulk of your paperwork can be stored and amended digitally you will find there is far less need for hard copy. Those documents that require hard copy can be stored offsite by your document management company. Moving away from paper documentation is better for the environment and can even boost your companies green or sustainability rating. CAN BE OUTSOURCED Live file solutions can be outsourced to professional companies that will securely, organise and store documentation to ensure streamlined productivity for your business. The benefit of outsourcing the process is that accountability rests on the shoulders of the external contractor so you don’t need to worry about your staff misplacing or damaging vital documents. ALWAYS AVAILABLE
INCREASES PRODUCTIVITY AND EFFICIENCY
You have access to online data at any time of the day or night. This around the clock availability means that you don’t have to be in the office or country to access essential documentation.
You save on looking for various documents, your documents are stored in an orderly and centralised digital space, marking a difference in productivity.
SAVES TIME
MAKES COLLABORATION EASIER
Online document management takes far less time to maintain, locate, update and securely destroy than hard copy. Searching through electronic documents for key information is also quicker and more efficient.
Collaboration between departments, which are traditionally siloed, is far easier. The business is able to interact internally without space and time constraints. SAFER
“Online document management takes far less time to maintain, locate, update and securely destroy than hard copy.”
OUR SERVICES • • • • • • • • •
So, you have heard about hackers and online data breaches but the biggest risk to your documentation is actually the elements. Documents are
• • •
EDMS/Onsite File Management RSWeb - Real Time Document Access Scanning & Electronic Retrieval Services Secure Offsite Document Storage Data Capture and Indexing Rapid Document Retrieval Vault and Confidential Storage Turtle Cases (Backup Tapes and other storage media) Combox - Onsite filing Solutions / Stationary Onsite File Room Management File Tracking System (FileRite) Document Destruction and Shredding
5 Krag Street, Selby, Johannesburg, 2001 Including locations in 9 Provinces + Namibia and UK info@tdw.co.za | 011 298 0700 | www.tdw.co.za
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 21
BUSINESS SCHOOLS
how business schools can prepare students for employability By Ahmed Shaikh, MD, Regent Business School
Business schools have an important role in preparing young people for the 21st-century workplace. It is no longer news that disruptive technologies will be the driving force behind the fourth industrial revolution. In fact, it sounds clichéd to even talk about how the world of work is in a state of flux, relentlessly interspersed with major disruptions, and that these developments are shifting business models in all sectors, increasing the pace of change in job destruction and job creation. The reality is that the estimate of global economic returns on this revolution is $16-trillion. Given the sluggish growth in the global economy and recent threats of trade wars among major economies, this projection is big news. However, given the scale of investment in programmes to prepare students for employability, “graduates will need sufficient skills to ‘de-risk’ new enterprise development initiatives in Africa”, as African Development Bank President Akinwumi Adesina said. A cursory glance at the history of global economic development shows us that these revolutions have always been accompanied by job losses, followed by a period of recovery. The challenge with the fourth industrial revolution is that the prognosis for job creation is bleak. The hollowing-out of the middle segment of the labour market presents the most serious threat. Research indicates that, on average, a third of the skills required to perform today’s jobs will be wholly new by 2020. Education and training systems, postschool education in particular, have been static and underinvested in for decades. They are considered largely inadequate for new labour market needs. Criticism that higher education is obsessed with disciplinary knowledge acquisition rather than preparing graduates to be ready to “plug in and play” in the workplace has become more acute in recent years. It is estimated that 75 million people globally are unemployed and that 50% of young people aren’t convinced their higher education has improved their chances of finding a job. A recent McKinsey report indicates that by 2020 there will be a shortfall of 85-million high-and middle-skilled workers.
22 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
Employers demand new standards for what graduates should be able to do, in being able to adapt and innovate in response to changing circumstances. The key shift in industry expectations is for graduates to move from “discipline-specific” expertise to a broad range of skills applicable in different work contexts. These competencies are hard to find among recent university graduates. This is where business schools can come in. They can be engaged in the development of innovative training and education in transferable skills. These can help bridge the gap between learning and work, and improve graduate job readiness, thus reducing the shortage of skills in the workplace and the frequent education-job mismatch. To meet these challenges, business education must be transformed in ways that will enable students to acquire the creative thinking, flexible problem-solving, collaboration and innovation skills they need to be successful in work and life. Currently, schools are affected by a larger system that often reinforces the status quo instead of encouraging innovation and change. Business and management qualifications should provide a range of contexts, ensuring that graduates leave not only with theoretical knowledge, but also the ability to apply it across a range of situations. Most education systems are based on models put in place over a century ago. Fragmented attempts at reform and modernisation have failed, in most cases, to address the growing gap between conventional education systems and the demands of modern life and new labour markets.
work-readiness, helping them envision a variety of career paths and equipping them with the relevant skills and competencies. Digital skills alone are not enough. Students must understand what to do with them, and the new curriculum will help learners apply and innovate with technology so they can play an active role in shaping the tools of the future. In addition, the curriculum will focus on skills such as critical thinking, adaptive intelligence, creativity and innovation, problem-solving, collaborative intelligence, communication and creativity. These capabilities encompass the knowledge, skills and behaviours that, together with curriculum content, will help students to live and work successfully in the 21st century. Business schools are obliged to meet students’ expectations. The management education system must provide compelling learning experiences that connect all students to adulthood, as well as domestic and global labour markets based upon a convergence of academic, technical and employability skills. Economies are entering a period in which artificial intelligence (AI) has the potential to overcome physical limitations and open up new sources of value and growth. As business schools and other higher education institutions think about how to prepare graduates for “plug in and play”, we must do so not with the idea that transformative technologies and AI are simply productivity enhancers; rather, we must see them as tools that can transform our thinking about how growth is created.
Klaus Schwab, executive chair of the World Economic Forum, constantly reminds us that the fourth industrial revolution will be far more comprehensive than any previous industrial revolution, because of the speed of society’s acceptance and implementation of its concepts, as well as the meaningful changes that will occur on a societal and individual level. At Regent, we have created a laboratory to develop employability skills to prepare students for
Ahmed Shaikh
EDUCATION / BUSINESS SCHOOL
TRANSFORMATIONAL LEARNING THAT’S ADAPTABLE, INNOVATIVE AND RELEVANT e are living in a time of accelerated change and disruption in which society faces increasing pressure to evolve its systems and processes to meeting the demand of the the 21st century and beyond.
“Consequently the main tasks of educational institutions will be the development of new curricula that better match the demands of digital era job market.” Within this perspective education is the most sophisticated social technology of societal transformation and yet it is still a widely underutilised pathway for co-creating and contributing to sustainable regenerative and thriving futures. Paradoxically our educational ecosystems are still designed for the world of yesterday. The
recent Hay Global Skills Index notes that the growing skills mismatch remains one of the key problems of the global job markets. Consequently the main tasks of educational institutions will be the development of new curricula that better match the demands of digital era job market. To prepare learners for success, the notion of education has to change at scale. Students will need to adapt and be innovative in response to new demands and changing circumstances, in being able to command and expand the power of technology to create new knowledge. A new Pan-African platform of higher education institutions, Honoris United Universities, is acutely aware of these new demands on higher education and has thus adopted a philosophy of ‘education for impact’ at the core of its cur-
riculum development and student experience strategies. REGENT BUSINESS SCHOOL a member of this platform has established two Innovation hubs at its campuses: the iLead Lab and the Honoris Collective Lab. These creative spaces offer the latest exponential technologies and learning experiences which students and community members can use to help carry out their ideas and create innovative enterprises. With courses such as robotics, coding, 3D design and printing students can produce anything from drones to robots using open-source technologies and rapid prototyping tools like 3-D printers and other manufacturing techniques.
study@regent.ac.za | Contact 031 304 4626 | www.regent.ac.za
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 23
EDUCATION / EXECUTIVE EDUCATION
FACILITIES MANAGEMENT / ENGINEERING
CHARMAINE MABUZA - A PERFECT MATCH FOR THE NATIONAL LOTTERY The co-owner of Zamani Holdings, the parent company under which ITHUBA operates is a veteran business leader who has always had the best interests of South Africans at heart. In the 1990s, Charmaine Mabuza was already breaking boundaries, along with her close business associates, she was challenging the narrative that questioned the capability of women to lead, particularly black-women. She became one of the first Director Board Members of Women Investment Portfolio Holdings Limited (WIPHOLD); the first black women-owned company to list on the JSE with a net asset value of R1.2 billion.
Charmaine Mabuza has always been a catalyst for change, for a better South Africa and Africa.
The philosophy of Zamani’s leadership has always encompassed a people-first approach. In 1999, Zamani Holdings established the Eric and Charmaine Mabuza Scholarship Foundation which afforded the youth from disadvantaged backgrounds an opportunity to access tertiary institutions. Zamani asked for no payment in return except that the beneficiaries pay it forward by affording at least one other person the same opportunity to education. The Foundation, through this initiative, continues to change the lives of many young South Africans and their families. The Eric and Charmaine Mabuza Scholarship Foundation was the beginning of a significant difference that Zamani Holdings would make in the lives of South Africans. In 2013, Zamani identified an instrument through which they could serve the nation, and formed ITHUBA Holdings as a special purpose vehicle to bid for the license to operate the South African National Lottery. At this point, Charmaine Mabuza was already a seasoned business leader who had built a solid reputation for herself, as well as a powerful business network. It was her intelligent approach and sincere desire to further contribute actively and positively to the South African socio-economic status that ensured ITHUBA’s victory. As of 2015, ITHUBA started operating as the lawfully appointed third operator of the South African National Lottery. Armed with the license to operate the National Lottery and a desire to bring about change, ITHUBA wasted no time in addressing crucial issues affecting South African communities, a lot of which revolved around
Charmaine Mabuza, Group CEO of Zamani Group
24 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
the lack of equality in opportunities. Among other important things, ITHUBA started by increasing the economic participation of previously disadvantaged black South Africans and addressing socio-economic disparities which still exist amongst most sectors of our population; and where poverty remains the biggest challenge. This was done by installing additional National Lottery terminals in these communities, so that they could have an opportunity to enrich themselves by playing the National Lottery games, as well as through the significant commission that the informal and formal retail owners would receive. The installation of terminals and branding were at no cost to the retail owners.
“ITHUBA’s execution has always proved that it fully understands its mandate, to successfully raise funds that will be utilised to support good causes and bridge the socio-economic gaps that exist in South Af rica. This mandate found its perfect match in Charmaine Mabuza.” ITHUBA’s execution has always proved that it fully understands its mandate, to successfully raise funds that will be utilised to support good causes and bridge the socio-economic gaps that exist in South Africa. This mandate found its perfect match in Charmaine Mabuza. ITHUBA, in collaboration with Zamani Holdings, developed a broad, yet impactful Corporate Social Investment (CSI) strategy, which includes:
EDUCATION / EXECUTIVE EDUCATION
THE MABUZA VILLAGE HOUSING PROJECT
The Mabuza Village Housing Project, where the company built in excess of 10 houses for employees with over 10 years of service to the company.
YOUTH EMPLOYMENT INTIATIVE
A youth employment initiative which placed 11 young people in various departments in the company on a 12month internship programme. Out of the 11 interns, the company absorbed 4 interns into their workforce. ITHUBA continues to support their alumni interns through employment opportunities with their business partners and associates, in order to contribute positively in battling the scourge of youth unemployment. Following the success of the 2018/19 Internship Programme, applications for the 2019/20 intake were opened on 23 October. ITHUBA looks forward to make an impact in the lives of the next intake of the 13 interns.
WOMEN EMPOWERMENT
A women empowerment Retailer Development Programme that identified 65 female National Lottery retailers to develop, train and upskill in order to improve their business skills.
A MEDIA INITIATIVE
A media initiative to raise awareness and instill a sense of responsibility around preventing violence against women, especially femicide.
YOUTH ENTERPRISE DEVELOPMENT
A Youth Enterprise Development Programme designed for aspiring entrepreneurs who have a business idea or have registered a small business, and need to take it to the next level of commercialisation. This formal programme is aimed at providing developmental support for the entrepreneurs, honing in on 5 critical areas: Business guidance focusing on strategy development, finance, marketing, sales and personal development; Access to infrastructure and back office support to help ease the financial burden of growing a new business; Entrepreneurial learning; Access to business specialists and Access to finance. ITHUBA also intends to integrate these entrepreneurs into their procurement ecosystem.
“For Charmaine Mabuza, socio-economic challenges are not the only battle she has had to f ight. Mabuza has never been immune to the trials faced by women in business, especially Black women. She is a leader of a successful, innovative company that operates within the gaming industry.”
For Charmaine Mabuza, socio-economic challenges are not the only battle she has had to fight. Mabuza has never been immune to the trials faced by women in business, especially Black women. She is a leader of a successful, innovative company that operates within the gaming industry. Only 20% of women in gaming are in leadership roles and even fewer are in ownership positions, within the companies they lead, making Mabuza a true outlier. Today, ITHUBA continues to be challenged by those who believe a black owned company cannot possibly be solely capable of transforming the National Lottery the way that ITHUBA has done for the South African Lottery. She continues to be challenged by those who do not believe in the leadership of women and those who prefer a monopolized industry that is capitalized by white males. Still, Charmaine Mabuza continues to rise above all these challenges. She remains undeterred, leading ITHUBA to operate the National Lottery in a just, fair and ethical manner. ITHUBA’s excellence has been applauded beyond the borders of Africa. In 2017, the South African National Lot-
“Today, ITHUBA continues to be challenged by those who believe a black owned company cannot possibly be solely capable of transforming the National Lottery the way that ITHUBA has done for the South Af rican Lottery.”
tery was acknowledged as one of the top global performers by the World Lottery Association, with a 9.2% increase in sales at the time. This was achieved as a result of ITHUBA’s strategic approach to operating an economically, socially and gender inclusive Lottery. Mabuza is an epitome of strength and resilience, a true example to women in business, especially women in the Gaming industry.
“She continues to be challenged by those who do not believe in the leadership of women and those who prefer a monopolized industry that is capitalized by white males.”
www.nationallottery.com | Contact 0860 456 886
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 25
Skills Development
in the emerging Fourth Industrial Revolution By Melissa van Aswegen, ETQA Manager at The Skills Development Corporation
hat does the future look like for innovative leaders in the business sphere? Robotics, Internet of Things (IoT) and Artificial Intelligence are gradually easing their way into the skills development space in South Africa.
of the most exciting that we can expect is fully digitalised products for mobile and interactive learning - all of which will increase the accessibility of potential students in the more remote areas. That being said, we can soon expect to introduce dynamic learning interfaces which will deliver real time feedback to students and endorse full qualifications instantaneously.
More than ever, we need to be prepared to equip our workplaces and pave the way for advancement.
“We can soon expect to introduce dynamic learning interfaces which will deliver real time feedback to students and endorse full qualifications instantaneously.� New 4IR technologies are transforming the way we live and work. From high-tech strategies initiated in Germany to the advancement of many service-driven industries across the world. If South Africa is to be fully on board, we need to start at the grassroots level; education being the ticket to a new generation of forward-thinking individuals. 26 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
However, 4IR does present some challenges for the skills development industry, such as cyber-crimes and privacy infringements, since gaining access to these tech savvy platforms will also attract online perpetrators and malicious intrusions. Among the biggest may be the perceived loss of the human touch. Automated technologies can never be a substitute for interpersonal critique and judgement, and this factor will be lost.
Melissa van Aswegen
Undoubtedly, there are significant transformation opportunities at the feet of skills development, which need careful examination of both the risks and rewards. 4IR technologies will ascertain many advancements in the educational industry. Perhaps some
We need to ask ourselves how we can embrace this technology to improve the learning experience and still encourage job opportunities. Thankfully for most subject areas, Artificial Intelligence will never be able to substitute the teacher within the classroom. With 4IR in our midst, we find ourselves entering an exciting era in education. Let us embrace this ground-breaking movement and be part of the revolutionary transformation of the skills development landscape of South Africa.
ENGINEERING / FACILITIES MANAGEMENT
Multidisciplinary Engineering Consultancy Since its establishment in 2000, Mekan Engineering Services has grown from a Mechanical Consulting Engineering practice to a national multidisciplinary organisation with Clients in all business sectors.
BUSINESS SECTORS & PROJECT TYPES
ogether with our national footprint and engineering expertise our service offering includes Facilities Management as well as Project Management, which enables us to provide Clients with an integrated approach to satisfy all needs.
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“As a 100% level 1 BBBEE company we believe in developing and empowering our staff to ensure continued service excellence.” As a 100% level 1 BBBEE company we believe in developing and empowering our staff to ensure continued service excellence. Our Engineers, Project and Facility Managers are experts in their fields and registered with the various professional bodies that guide their chosen profession and ethics. We aim to provide clients with sustainable and cost-effective solutions both in terms of integrating our various services as well as innovative engineering solutions in the fields of energy and water efficiency. In our continued focus on maintaining and build-
ing on our service levels we are compliant with ISO 9001:2015 and other industry standards which enables us to guarantee consistency and continued improvement in our service offering. MEKAN SERVICES OFFERING • • • • • • •
Mechanical & Wet Services Engineering Fire Services Engineering Electrical & Electronic Engineering Civil & Structural Engineering Mining Engineering Project and Programme Management Facilities Management & Maintenance
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Public • Residential/Housing • Electrical Reticulation • Engineering Maintenance • Facilities Management & • Maintenance • Offices • Compliance inspections • Healthcare • Education Municipal • Electrical Reticulation Private • Retail/Commercial • Residential • Industrial • Electrical Reticulation • Engineering Maintenance • Facilities Management • & Maintenance • Offices • Compliance inspections Mining
HEAD OFFICE: MEKAN House, 9 Phillip Engelbrecht Street, Meyersdal info@mekanes.co.za | 011 867 1974 | www.mekangroup.co.za
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 27
UNDER PRESSURE - pressure as 2020 EE reports deadline looms By Nthabiseng Phoshoko, Commercial Director, LFP Group
Nthabiseng Phoshoko
Employment Equity (EE) report submissions are now open and will run from 1 September 2019 to 15 January 2020. Penalties relating to failure to comply or late submissions may see fines ranging from 2 – 10% of a company’s turnover. his mandatory submission is relevant to all companies with a headcount of 50 employees or more and to those with an annual turnover above the required threshold (varies per industry). LFP Group’s Commercial Director, Nthabiseng Phoshoko, says that the EE report is in accordance with Section 21 of the EE Act. “It reflects a company’s progress in achieving transformation by empowering its workforce.” The purpose of the Employment Equity Act, No. 55 of 1998 is to achieve reasonable progress towards employment equity in the workplace. Known as ‘indirect empowerment’, EE provides equal opportunities and ensures a wholly represented workforce. “It forms a critical part of your B-BBEE scorecard as it places focus on previously disadvantaged citizens and eradicates discrimination at all levels,” Nthabiseng explains.
30 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
EE forms part of Management Control on the B-BBEE scorecard which accounts for 17% (or 19 points) of the scorecard. “Government has been clear on its mandate for transformation and the implementation of an EE strategy is a long-term commitment by the private sector to transformation,”
sign and implement an employment Equity plan. “There is no rigid format for an EE plan. The Act allows you to customise your plan based on your company’s needs.”
The EE Act aligns the private sector to the public sector. “It’s a reflection of a company’s progress in achieving its objectives and it showcases a holistic, inclusive strategy.”
“The EE committee should align closely to a trusted external advisor to ensure 100% compliance.”
Non-compliance is not an option, says Nthabiseng, as there has been a significant increase in the Department of Labour’s efforts to reduce non-compliance. “More audits and enquiries are taking place than ever before, and this trend will continue into 2020”
Nthabiseng concludes by saying that the EE committee should align closely to a trusted external advisor to ensure 100% compliance. “Failure is not an option, by partnering with an industry leader you receive trusted advice and reap the benefits of a well-executed EE plan.”
Each company elects an EE committee to de-
For most companies, people are the most important resource; and even in the workplace of the future, the right people are the key to innovation and excellence. What are the skills that count the most for employers? And it is simple to employ people that match these skills?
Nearly two-thirds of businesses regard problem-solving as an important skill; more than half want critical thinking in their employees. Less vital are digital, sales and business administration skills.
Problem solving
Attention to detail
Critical thinking
Hiring the Right Skills
Talent and Small Businesses
Problem solving and critical thinking are two of the most important skills in prospective hires, according to employers.
HR and hiring are signif icant challenges for medium and larger organizations; but startup and micro businesses are much less focused on f inding the right people and skills. Less than half of businesses of 1 of 9 people are concerned about hiring or talent.
However, more than a third of business struggle to f ind and recruit people with these same abilities.
Source: https://www.fuse-insights.com/2017/11/13/scoping-the-skills-gap/
Unlocking Real Economic Transformation in South Africa - through enterprise development By Nathi Khumalo, CEO, Traverse Advisory
“Unfortunately, there are those that view Enterprise Development as a tick-box exercise where they can simply throw money in hopes that B-BBEE will go away, and not really concerned about the actual impact made or return on investment it can realise.”
Part of South Africa’s dark history is the exclusion of black, Indian and coloured people from meaningfully participating in the country’s economy. This has had a lasting effect on the racial divide between rich and poor. n a bid to redress this, the ANC led government first implemented black economic empowerment policies in 2003 as a pragmatic growth strategy to realise the country’s full potential by bringing the black majority into the economic mainstream. Entering the BBE industry as a young consultant in 2008, I quickly realised that the biggest misconception about the policy is that it was created for black people to take from white people, which is, of course, plain wrong. Instead, it was implemented to promote economic transformation, support labour-intensive growth and create a globally competitive economy. The biggest Achilles’ heel to South Africa achieving this growth sustainably has been the constant combination of low growth and rising unemployment. The SME sector is touted as the kryptonite for this low growth as large corporates continue to restructure and scale down.
32 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
Small to medium-sized businesses currently employ close to half of South Africa’s workforce, and contribute to more than 20% of GDP. They also pay around 6% in corporate taxes. It’s also been touted that by 2030, SMEs will be responsible for creating 90% of jobs in the country. A key element on the BEE-scorecard looking to boost entrepreneurship and SME development is Enterprise Development.
that B-BBEE will go away, and not really concerned about the actual impact made or return on investment it can realise. Despite over R26 billion spent on enterprise development a year, three out of four businesses fail within the first few years and just 10% will be around for more than a decade.
ED requires corporates to invest 1% of net profit after tax on developing SMEs with the logic the contributions would help enable SMEs and expose them to new market opportunities.
At Traverse Advisory, we believe Enterprise Development is a valuable component on the B-BBEE scorecard, that if done correctly by corporate and listed companies, can embolden the country on its sustainable economic transformation journey.
There are various options available for corporates to develop a ED strategy, including supporting SMEs with preferential credit terms and pricing structures, mentorship and business skills training.
Our products and services are geared for JSE-listed companies as we believe that through their Enterprise and Supplier Development funds, high impact black businesses can be nurtured and thrive.
Initiatives including grants and loans, investing in beneficiary entities, guarantees or security and providing access to capital are other avenues corporates can take in their enterprise development strategy.
What we need to do as an industry is to stop speaking B-BBEE but speak economic transformation, which starts with us changing the minds of corporate leaders to see the value in supporting and growing small to medium sized businesses - a potentially lucrative tax-base for our economy.
Unfortunately, there are those that view Enterprise Development as a tick-box exercise where they can simply throw money in hopes
ENTERPRISE DEVELOPMENT
“We pride ourselves in providing innovative and sustainable transformation solutions to help drive South Af rica’s real and cost effective economic growth.” Nathi Khumalo, CEO, Traverse Advisory
UNDERSTANDING B-BBEE - for business & economic growth The objectives of the B-BBEE act is to promote economic transformation in order to enable meaningful participation of black people in the economy by achieving substantial change in the racial composition of ownership structures, increasing the participation of all communities in the mainstream economy, giving effect to government policy aimed at reducing inequality, defeating poverty and creating employment. SOLUTIONS WE OFFER
• •
Legal and regulatory compliance Recruitment consulting policies & procedures
BUSINESS COMPETITIVE INTELLIGENCE CONSULTING • • • • •
Top tear competitors B-BBEE status B-BBEE certification validation Competitor B-BBEE certificate analysis Scorecard key performance areas Advisory on strategy
OWNERSHIP STRUCTURES • • • • • • •
Equity equivalent programs for multinationals Direct equity B-BBEE ownership transaction Vendor financed or third party financed structures Employee share scheme ownership programme (ESOP) Sales of assets Broad-based ownership participation schemes (BBOPS) Admin and management
HUMAN RESOURCE COMPLIANCE • • • •
Employment equity consulting and reporting Employment equity plan development EE committee establishment EE Training
• • • •
B-BBEE short & Long Term strategy development Identification of key personnel Strategy implementation and monitoring Quarterly reporting
ENTERPRISE SOLUTIONS & BUSINESS ALIGNMENT • • • • • • • •
Procurement advisory Enterprise development advisory SME beneficiary identification SME project planning and development Supplier development management SME incubation Enterprise & supplier development fund management SME support
BUSINESS CONTINUITY MANAGEMENT CONSULTING • • •
Buy in from executive management B-BBEE committee engagement B-BBEE strategy mapping & budgeting
ABOUT TRAVERSE ADVISORY Traverse Advisory is a 51% black owned company with a level 2 B-BBEE status. We are led by young professionals with over 20 years combined experience in business strategy and B-BBEE consulting. Our sole purpose is to assist our clients’ drive innovative and sustainable transformation strategies by providing all-inclusive and expert B-BBEE/Business Strategy services to all sectors of the South African economy as well as continentally.
152 Bryanston Drive, Bryanston, 2021 info@traverseadv.co.za | Contact 011 789 4966 | www.traverseadv.co.za
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 33
When hiring a new employee it is important not to throw them in the deep end. Each company has a unique culture, rules and expectations of employees. A smooth, structured onboarding process ensures that a new hire fully understands what is expected of them and how to navigate in their new environment.
A WARM WELCOME First impressions matter. Your current staff play a huge role in making a new hire feel welcomed and comfortable in their new environment. Inform your staff of the new member and what their role will be, this allows staff to be equipped to help in any way they can and welcome them into the off ice.
PREPARING THE WORKSPACE
PLAN A TEAM LUNCH Create a time and space for the new employee to share a meal with their immediate team. A meal breaks down barriers and allows everyone to f reely get to know one another when work is not in the way. Feeling valued by the company and the team in this way makes the transition period smoother.
FOLLOW-UP
The tools of the trade need to be in place and ready for use before the new hire enters the building. It makes for a much smoother transition when everything needed is accessible. It allows the new hire to learn right away.
TRAINING TIME The f irst week or two should solely be dedicated to training. Training makes sure that the new employee becomes familiar with how things work in the company and what is expected of them in the new role. Training will create more understand of the position for the new hire, and help management understand the capabilities of the new employee.
Building a relationship with the new employee is important. Follow-up on them to make sure that they are not only comfortable in their new role but also their new environment. Sources: www.https://www.trinet.com/insights/7-steps-to-an-effective-employee-onboarding-process
Do you want to help solve South Africa's high unemployment rate, by supporting financial excellence in SMMEs?
Adopt an SMME. About SAICA Enterprise Development SAICA Enterprise Development offers financial excellence to SMMEs. We believe that creating financially savvy SMMEs will help businesses grow sustainably, access funding successfully and ultimately employ more people. We have a group of SMMEs that are in need of development. We offer them financial coaching and boot camps on various subjects through our partnership with all designations of SAICA. By partnering with us, you adopt an SMME and pay for their development.
-Create customised programmes that make business sense; -Develop financial excellence in entrepreneurs that leads to tangible economic impact. Your contribution will play a significant role in allowing us to continue to provide these SMMEs with much needed financial acumen. Let your Enterprise and Supplier Development contribution be part of the bigger picture. Be a stakeholder in economic growth- Adopt an SMME.
Contact Sibusiso Nkosi 011 479 0617 sibusison@saicaed.co.za SAICA Offices, 17 Fricker Road, Illovo, JHB. Give us a follow on: LinkedIn – SAICA Enterprise Development Twitter - @SaicaEnterprise
We aim to: -Potentially match you with an SMME that can fit into your supply chain; -Develop financial excellence in SMMEs; -Deliver excellent B-BBEE solutions www.saica.co.za/enterprisedevelopment aligned to client expectations;
ABOUT US
90% of SMMEs that received finance coaching say it has improved their effectiveness and ability to achieve their business objectives.
Over 270 ED interactions in 2018 (including SMME's on the Accounting and Back Office Support)
62 Accounting Graduates impacted
Socio-Economic Development to Bolster Your Business. By BEE Connex
In a developing country, SED is a worthy element on the B-BBEE scorecard. As the fifth element on the scorecard, SED makes up 5% of the scorecard and acts as an incentivised ‘CSI initiative’ element. istorically, businesses have given back to charity via CSI drives but this particular scorecard element rewards businesses for complying with legislation when doing so. SED is designed to include non-participants in the economy in a sustainable manner. Contributions can be both monetary or non-monetary and should benefit groups, communities or individuals where at least 75% of the beneficiaries are classified as black. It’s important to note that this form of giving back does not encourage hand-outs.
For a generic entity, their SED contribution target equates to 1% contribution of their Net Profit After Tax (NPAT). In addition to this, requirements may vary per sector (i.e. construction, mining). PROMOTING A SUSTAINABLE, INCLUSIVE ECONOMY
COMPLYING WITH SED
When giving back under SED, it’s crucial to note that contributions should return a sustainable benefit to its beneficiaries. Companies need to provide the beneficiary with tools (or means) to enable them. Rather than simply handing over money, your company should stipulate what the money should be used for to ensure that it makes a long-term difference.
Working with an experienced service provider under SED is important to ensure 100% compliance and recognition. A record of the following items must be kept for the verification process:
Building renovations, schooling and training are examples of sustainable contributions that will add value to beneficiaries in the long term.
• • • •
The date of your company’s contribution A thank you letter/ acknowledgement letter by the beneficiary A B-BBEE certificate or information by the beneficiary proving that 75% or more of the recipients are black Proof of monetary or non-monetary contributions to beneficiaries
36 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
South Africa currently grapples various challenges and SED is a means to eradicate unemployment, poverty, crime, unsustainable business practices and a lack of education. Rather than waiting for the public sector to step in, this is the perfect platform for all private sector participants to contribute meaningfully.
“Rather than waiting for the public sector to step in, this is the perfect platform for all private sector participants to contribute meaningfully.”
THE BENEFITS RECAPPED
Finally, SED positions your business as a good corporate citizen and connects you to like-minded businesses.
B-BBEE was first established in 2003 to encourage an all-inclusive society, and SED should not be overlooked. While its weighting is the least of the five scorecard elements, SED essentially takes what every business is already doing (giving back) and rewards them for doing so.
Contact BEE-Connex to get in touch with a perfectly paired SED service provider to ensure 100% compliance!
ENTERPRISE DEVELOPMENT / SKILLS DEVELOPMENT & ENTERPRISE DEVELOPMENT
FUTURE BUSINESS LEADERS
TSIBA SHOWS WHAT’S POSSIBLE WHEN BUSINESS EDUCATION INVESTS IN PEOPLE TSIBA is a unique social enterprise that has invested successfully in ambitious humans since 2004. We are passionate about the transformative impact of education as a catalyst to unblock the best of what humans can be.
The core subjects which underpin excellent business education are necessary and provided in full at TSIBA. But they are not sufficient. TSIBA goes beyond by placing attitude, leadership and entrepreneurship as credit bearing subjects at the heart of all of our curricula. All graduates of TSIBA have deeply explored the questions of what is my work, what is success, and how do I add value. These are the questions we all must answer. The answers build each of our own unique stories and they build our citizenship. When this is achieved the outcomes are profound, especially in the communities where TSIBA proudly has its roots. TSIBA includes a Business School and an Ignition Academy working collectively to return highly sought after graduates and successful small business enterprises.
towards their tuition at relative levels of affordability. TSIBA Business School’s undergraduate students pay only what they can afford, removing financial barriers to tertiary education. TSIBA BUSINESS SCHOOL qualifications have Financial Sector Conduct Authority (FSCA) recognition. TSIBA BUSINESS SCHOOL is a member of the United Nations (UN) Principles for Responsible Management Education (PRME). PROGRAMMES @ TSIBA BUSINESS SCHOOL:
The Business School aims to provide its students with a world-class and rewarding business education. This is supported by generous tuition scholarships which enable students to contribute
ABOUT TSIBA IGNITION ACADEMY TSIBA IGNITION ACADEMY is an ideal partner for solutions within the skills development and enterprise supplier development arenas. The Academy delivers high quality and customisable solutions to enhance the Skills Development and Enterprise and Supplier Development BEE scorecard elements for organisations across all business sectors. These high-impact interventions close skills gaps, encourage professional development and drive meaningful supply chain transformation. PROGRAMMES @ TSIBA IGNITION ACADEMY: QUALIFICATIONS • •
Higher Certificate in Business Administration (SAQA ID 84186) Bachelor of Business Administration (SAQA ID 61469) Post Graduate Diploma in Small Enterprise Consulting (SAQA ID 90822)
•
TSIBA Education NPC is registered with the Department of Higher Education (DHET) as a Private Higher Education Institution (PHEI) under the Higher Education Act of 1997.
• • •
• • •
ABOUT TSIBA BUSINESS SCHOOL TSIBA Business School (registered with the DHET as TSIBA Education NPC) is an accredited not-forprofit higher education institution offering undergraduate and postgraduate business qualifications.
TSIBA Education is accredited by the Council on Higher Education (CHE) to offer higher education qualifications and also by the Quality Council for Trades and Occupations (QCTO) to offer qualifications in the trades and occupations band on the National Qualifications Framework (NQF). DHET Registration number 2007/HE08/001. Services SETA Accreditation number 3919.
•
Services SETA accreditation number: 3919 Further Education & Training Certificate: Business Administration Services SAQA ID: 61595 NQF 4 Further Education and Training Certificate: New Venture Creation SAQA ID: 66249 NQF 4 National Certificate: General Management SAQA ID: 60269 NQF 5
SUPPLIER AND ENTERPRISE DEVELOPMENT PROGRAMMES Business Igniter Programme Business Essential for Entrepreneurs Next Level Growth
CAPE TOWN: 307 Forest Drive Extension, Pinelands, Cape Town JOHANNESBURG: The Mills, Newtown, Johannesburg
www.tsiba.ac.za | Contact 021 532 2750
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 37
Trends, Tips and the Future of Enterprise Supplier Development By BEE Connex
“Today’s procurment process goes beyond simply sourcing goods from suppliers; supporting a BEE-compliant business speaks volumes about your values and positions you as a responsible citizen.” nterprise Supplier Development (ESD) combines preferential procurement, supplier development (or supplier diversity) and enterprise development programmes under the banner of B-BBEE. There are two reasons why ESD exists. Firstly, it incentizes businesses to spend money and gain points by supporting compliant business ventures. Secondly, it develops black-owned companies (both big and small) and paves the way for more employment and empowerment opportunities.
• •
•
SAB, whose ESD programmes aim to create a diversified and inclusive supply chain Woolworths’ Enterprise Supplier Development programme primarily supports emerging SMEs in Woolworths’ supply chain. According to their website, the aim is to lift the barrier of entry into their supply chain for small, medium, black and black women-owned enterprises Telkom launched its own ESD programme, Telkom’s FutureMakers, in 2015. The programme supports strategic start-ups and existing small businesses as well as other entrepreneurial ventures aligned to the technology sector and the Telkom value chain Sasol’s Enterprise Supplier Development programmes work to develop the SME sector and diversify their supplier pool
BRIDGING THE GAP BETWEEN CORPORATES AND SMES
•
ESD is an attractive part of the B-BBEE scorecard and is one of the simplest ways to accumulate B-BBEE points. It accounts for 40% of the overall scorecard and, not only does it empower blackowned businesses, it creates for sustainable business operations in South Africa.
THE DIFFERENCE BETWEEN SUPPLIER DEVELOPMENT AND ENTERPRISE SUPPLIER DEVELOPMENT
Today’s procurement process goes beyond simply sourcing goods from suppliers; supporting a B-BBEE-compliant business speaks volumes about your values and positions you as a responsible citizen. CORPORATES WHO MAKE A DIFFERENCE SME South Africa recognised several corporate ESD programmes in an article published in 2018. Some of them included: 38 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
Supplier Development is also referred to as Supplier Diversity and is understood to be contributions and support given to qualifying beneficiaries which already form part of the measured entity’s supply chain. Enterprise Development contributions is similar to the above, except that the beneficiaries do not form part of the company’s existing supply chain. The objective is to assist and develop a potential supplier to eventually form part of the measure entity’s supply chain.
It’s important to note that the tender process has changed significantly over the years with B-BBEE levels now forming a crucial part of the selection process. ESD IN 2020 With a host of amendments to the B-BBEE Charter soon to come into effect, trading has never been more attractive and ESD contributions can take on many forms. While some are still cynical about B-BBEE, ESD is not based on the value of a contract given to a black business but rather the contributions towards technical help, the transfer of knowledge and skills, operating cash flow, loans and/ or investments. One of the biggest proposed changes to come into effect by 01 December 2019 under this scorecard element is procurement spend with 51% black owned businesses. Here, points have increased from 9 to 11 and the target from 40 – 50%. Another notable change is that the multiplier of 1.2 (for first time suppliers) is removed and replaced by a 1.2 recognition boost for purchasing from 51% black owned or black woman owned suppliers. These qualifications are achieved using the flow-through principle. Visit http://www.bee-connex.co.za/ to get connected with a savvy supplier for your ESD requirements!
The Masisizane Fund (NPC) is an initiative of Old Mutual
South Africa, established in 2007 following the closure of the Unclaimed Shares Trust. The mandate of the Fund is to contribute meaningfully to employment creation, poverty eradication and reduction of inequality,
economic growth and the attraction of investment.
This is achieved through the promotion of support to small, micro and medium enterprises.
The fund’s focus is on enterprises that are 51% or
A Business Accelerator Program has been estab-
more owned by previously disadvantaged individu-
lished where potential clients receive targeted skills
al(s) giving priority to rural and peri-urban/township
training and support to grow into a business eligible
areas. Masisizane gives preference to businesses
to receive financial support.
that are owned by youths, people with disabilities or are owned by (51% or more) women and targets
Submit the following documents for an initial
productive and labour absorbing sectors.
screening by the relevant provincial office:
The Fund’s success is driven by a focused approach on high impact industry sectors, coupled with a comprehensive SMME finance solution that •includes business support. The Fund provides loan •finance in the following sectors: •• Agro-processing
• Franchising • Supply Chain/Manufacturing
ombds 05.2019 L13055.03
The Fund provides non-financial value adding post investment services including capacity development, business management and technical support, financial
education,
market
development
and
product/service quality standards and compliance.
Follow us on:
Masisizane Fund |
@MasisizaneFund |
Masisizane Fund
• Comprehensive business plan with market analysis and projections;
• For established businesses – past financials (pref-
erably 3 years) and latest management accounts;
• For start-up businesses – financial projections; • Tax clearance certificate; • Off take agreements and/or letters of intent; • Signed consent for a credit check. Contact details:
Head Office: 011 217 1746
For more information and where to find us visit www.masisizane.co.za
ENTERPRISE DEVELOPMENT - beyond the BEE scorecard
By Stephanie Roodt, Director Enterprise Development & Training, TrioPlus Development
Enterprise Development (ED) comes in all shapes and sizes. But, no matter how it’s implemented, its primary purpose seems to be the 1% NPAT spend compliance per financial year to achieve maximum B-BBEE scorecard points. ompliance. That’s a serious word that, by itself, drives companies towards making sure that the implied 1% is spent. But compliance is a very different concept to what Enterprise Development should be measured on: the positive impact on the enterprise and entrepreneur; and, more importantly, the intended long-term sustainability of the enterprises that engage in development programmes under the ED purview. Using the phases of business development (concept, start-up, credible, sustainable, and mature), we should be concerned when enterprise development programmes are limited to those where positive impact towards sustainability is just a quick jump away. These are the so called “low-hanging” fruit in the ED ecosystem, and focussing development on these enterprises excludes a whole set of entrepreneurs whose brilliant ideas have not yet graduated into a start-up operation; often due to a variety of factors, not all of which are within their control.
40 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
If, as SEDA expects, SMEs are to contribute 50% of the country’s GDP by 2030, we have to look beyond the easy, obvious enterprises to assist, and facilitate the development of businesses that do not exist yet. So how do we facilitate long-term sustainability in businesses entering the ED ecosystem at concept phase? The answer to that lies in the timeframes we attach to ED initiatives. Naturally, taking a business from concept to sustainability does not happen overnight, and it cannot happen without the entrepreneur developing their own skills as their business moves from one phase to the next.
In addition to fostering long-term relationships with these enterprises, we have to understand that their needs are different to those businesses that are moving from start-up, or credible, towards sustainability. In this sense, access to seed capital is often the game-changer. It is a kick start to businesses that may have existed already if it wasn’t for lack of access to even the smallest amount of capital. As responsible corporate citizens, our drive for Enterprise Development should be long lasting impact, the transformation of people’s lives and the improvement of economic activity in the communities these businesses serve. It should be the start of a lasting developmental relationship to prove that there is life, and commitment, beyond the scorecard.
“If, as SEDA expects, SMEs are to contribute 50% of the country’s GDP by 2030, we have to look beyond the easy, obvious enterprises to assist, and facilitate the development of businesses that do not exist yet.”
ENTERPRISE DEVELOPMENT / ENTERPRISE DEVELOPMENT TRAINING
FOCUSING ON PERSONAL & BUSINESS GROWTH - through our DRIVE Developmental Programmes
customized to the different stages of business development. We have strived to compile a set of products that are SAQA aligned to empower entrepreneurs from all walks of life. The Entrepreneurial DRIVE Programme was established and is an acronym used for a series of structured Development Routes for Ideas, Ventures and Entrepreneurs to guide South African SMME’s on their entrepreneurial journey. TrioPlus Development is a Consultancy company specializing in Rural Enterprise & Supplier Development with a strong focus on personal & business growth through developmental programmes. TrioPlus Development was founded in 2012 as a merger between three strategically aligned business consulting companies to address the ongoing SMME development needs within South Africa. Our developmental programmes have been implemented across South Africa for the last 8 years to clients such as Anglo American Zimele, Kumba Iron Ore, Assmang Iron Ore, Independent Power Producers, De Beers Group, Sappi Southern Africa and several other institutions. TrioPlus has provided SMME Development, Training and Mentorship-related service in a variety of sectors including Construction, Forestry, Service, Retail, Agriculture, Mining Support Service and Hospitality. These programmes bring together extensive business experience and more than a decade of grassroots implementation to offer products
Each product includes a combination of tools that, collectively, provide the entrepreneur the best opportunity to develop their ideas, skills and improve on their business operations, guiding both owner and business towards growth. Each of the programmes have standardised, well-defined outcomes that will allow our clients to measure and report on impact. TrioPlus believes that a well planned and executed Enterprise & Supplier Development Programmes are directly proportional to the growth of local Preferential Procurement of an institutional supply chain. To achieve substantial preferential procurement, businesses are guided to understand the requirements to access corporate supply chains and deliver services that are aligned to different end-user needs.
TrioPlus understands the holistic ongoing support required to establish the correct approach, entrepreneurial mindset and credible business value offering required to be sustainable. Our goal is to support each entrepreneur that enters our programs to reach their potential and achieve a greater level of credibility and eventually sustainability.
“To achieve substantial preferential procurement, businesses are guided to understand the requirements to access corporate supply chains and deliver services that are aligned to different end-user needs.” The success of our development programmes is measurable in the entrepreneur’s personal development together with the meaningful increase of business revenue, market share, employment opportunities and net asset value. Contact us to find out more about our DRIVE Developmental Programmes.
Head Office: 053 833 2036 rt@trioplus.co.za | Contact 071 363 4103 | www.trioplus.co.za
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 41
Tackling Unemployment Through the YES Movement what, where, how? By LFP Group
“Now is the time for implementation! Talking is over!” hese were the words of President Cyril Ramaphosa at the State of the Nation Address in June this year. The President touched on several hot-button issues in his address but kept coming back to what he and other experts have deemed essentially a national crisis - youth unemployment. Youth unemployment rates in South Africa were at an unprecedented high of 55.2% in the first quarter of 2019, according to Trading Economics. This issue has been on the National Agenda since the 1990s but youth unemployment rates have remained consistently high since the country’s transition to democracy in 1994.
“The country must reduce the current levels of youth unemployment with the provision of broader opportunities directly targeted at young people.”
“If left unchanged,” says Group CEO for LFP Group, Louis Pulzone, “the situation is expected to lead to increasing social tension and unrest in the country as well as an overwhelming sense of despondence and disengagement from the youth labour market.” As a result, the country must reduce the current levels of youth unemployment with the provision of broader opportunities directly targeted at young people, as a matter of urgency.
During his SONA address, President Ramaphosa stated that government will be implementing a comprehensive plan to create no less than two million jobs within the next decade. “We are already working with the private sector to create pathways into work for young people through scaling up existing pathway management networks,” he said. One such pathway is the Youth Unemployment Services (YES) initiative, launched last year to help more than one million young participants of technical and vocational programmes find paid, work-based experience. “While it may seem like a buzzword, YES was created to do big things”. Offering incentives to companies who choose to hire young employees is a practical solution to the issue found by researchers from the University of Cape Town. UCT has said that employers are “risk averse when it comes to 42 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
hiring young people.” Researchers also found the recruitment process used to connect potential employers and young job-seekers to be largely inefficient. Participation in the YES programme offers attractive incentives to prospective employers. If the qualifying criteria and pre-conditions for participation are met, entities can increase their overall B-BBEE status by up to two levels at the completion of YES-specific programmes. “All costs incurred on the YES initiative can be claimed towards your Skills Development spend as informal training spend, effective increasing your 25% informal training cap to 50%.” Louis explains. However, it is important to acknowledge that there are risks involved in companies aligning themselves to the YES Initiative. It is critical that interested parties have the technical experience and knowledge necessary to implement YES, and this can sometimes only be achieved with the external services of a BEE-facilitation provider. “YES employees cannot simply be seen as a benefit on a scorecard, a percentage must be fully absorbed into the company at the end of the 12 month fixed period, and must be adequately trained prior to ensure that they are productive and knowledgeable”. INTERESTED IN SEEING IF YOU QUALIFY FOR THE YES INTIATIVE?
• • • •
YES employment opportunities are specifically new positions that must be categorised as ‘Fixed term’ or ‘Temporary employment’ for a minimum of a 12 month period Youth employees must be African and between the ages of 18 and 35 Your YES B-BBEE Benefits will be based on the financial year in which your verification takes place Meet 40% sub-minimum on each of your priority elements, or alternatively score at least 50% of the points available across your entity’s 3 priority elements (Ownership, ESD and SD)
Regardless of whether your company has capacity for new hires, you can still give the gift of education and by aligning this to the YES initiative your company reaps additional youth subsidies and rebates. “LFP Group has aligned our initiatives to the YES Program for maximum incentives. When implementing the YES initiative, it is advisable to consult with an expert for sound advisory.” “We support youth empowerment wholeheartedly and are dedicated to helping eradicate youth unemployment through our compliant service offering,” concludes Louis.
ENTERPRISE DEVELOPMENT / SKILLS DEVELOPMENT
enterprises, each of our clients has achieved a 100% pass rate in their verification audits.
AGENTS OF TRANSFORMATION
LFP Group is a proud sponsor of Miss South Africa 2019, the Vodacom Blue Bulls, the DHL Stormers and the Cell C Sharks. We are a Level 1 B-BBEE: Generic Company status and 30% Black Women Owned status. By partnering with us, you can claim up to 135% towards your procurement recognition which is enhanced to 162% as a new supplier.
At LFP Group, we strive to change perceptions and evoke positive conversations around BEE compliance in South Africa; that’s why they call us Agents of Transformation.
ather than viewing BEE compliance as a ‘tick box exercise’, we see it as the much-needed catalyst for change and growth in our country. By incorporating BEE into your company’s big picture thinking, you reap financial benefits whilst making a change in the lives of those who need it most. LFP Group is made up of: LFP Training, Placements, Outsourced Procurement, Payroll, B-BBEE Consulting Services, B-BBEE Verification, LFP Campus, a BEE Management Tool and BEEConnex. Based on this comprehensive portfolio we offer SETA accredited learnerships, B-BBEE consulting services, recruitment services, permanent placements, outsourced payroll solutions, YES program implementation, a BEE Management Tool and BEE-Connex. Our company has helped companies around the country to make a difference in the lives of those who can’t do so for themselves. When you join LFP, you join a family. As such, we promise you dedicated service, reliability and a legally compliant, transparent service offering. From large financial institutions to medium-sized
LFP team members to back your business
NATIONWIDE FOOTPRINT AND SATELLITE OFFICES IN SELECT KEY AREAS.
“Our company has helped companies around the country to make a difference in the lives of those who can’t do so for themselves.”
ABOUT THE LFP GROUP LFP Group delivers integrated transformation strategies for the sustainable growth of your business. As catalysts in the industry, LFP Group takes a strategic, long-term approach to your company’s compliance by offering a complete transformation solution designed to cover all aspects of your B-BBEE scorecard. Let our skilled team of Sales Strategists walk the long-term journey of transformation with you!
RANDBURG: LFP House, 96 Oxford Street, Ferndale; LFP Head Office, Cnr Aimee & Rabie Road, Fontainebleau; LFP New Campus, Bridge on Bond, Cnr Bond Street and Braam Fischer Road KWAZULU-NATAL: 1 Langford Road, Westville, Durban, 3629 CAPE TOWN: Sunbel Building, 6th Floor, 3 Old Paarl Road, Bellville Contact (011) 791 1602 / (011) 791 0763 | info@lfpgroup.co.za
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 43
EVENTS PRODUCTION
GROWING THE ENTERTAINMENT MARKET ACROSS SOUTH AFRICA Kathabo Media is an all in one event production company, with the widest range of production services available under one roof. Backed by a team of the most creative minds in the industry, we do inter alia corporate events, multifaceted concerts, exhibitions as well as corporate golf days.
We use state of the art equipment such as sound, lighting, video, staging, costuming, decor, tents, etc., which aids our team to produce events that pass on great savings to our clients. Our speciality is in event planning, exhibitions , corporate golf days , branding and marketing. Kathabo Group has a staff compliment of 64 permanent employees, 80% of which are females and 20% males. “Our Team of experts can start with a crumb of an idea and make into a phenomenal experience” OUR SERVICES • • • • • • •
Turn-key event management Corporate golf days Exhibitions Brand activations Road shows Team building Hospitality management
OUR MISSION
“Our team of experts can start with a crumb on an idea and make it into a phenomenal experience.” athabo Media has capitalized on the growing entertainment market across South Africa, through the production and promotion of high-quality entertainment. Located in the Free State, Bloemfontein, the company has 11 years’ experience in the event and management industry, creating and managing its own branded network of events, golf days and exhibitions. We work collaboratively with like minds in the industry to create links and legacies for events managements.
To ease the tension that comes with organising an event for our client and making the eventing process more seamless, thus ultimately providing our client with peace of mind. OUR VISION To be highly recognized and recommended as the best event agency in the eyes of our clients. Quality, Professional, Accurate & Integrity
we believe that providing a diversified range of production services makes us a more well-rounded team which “sees the bigger picture”. We have full comprehension of how each element of complex production interacts with the other, i.e. technically, logistically and aesthetically. A mix of talent, experience and drive affords our team an ability to always deliver expected results. We invest in dedicated people, internationally renowned equipment, ingenuity, creativity and a service delivery policy, all on which we take pride. Our unique feature is our continuous strive to stay abreast with the latest technological developments and to refine or initiate marketing trends that render outstanding results for our clients.
ABOUT KATHABO MEDIA We have a hard-working, loyal, and enthusiastic team of competent staff. Each and every staff member has their own specialist areas; however our staff are multiskilled and are able to work across the board. In fact, Kathabo Group believes that providing a range of production services makes us a more well-rounded team who “see the big picture”. We understand how each element of complex production interacts with the other – technically, logistically and aesthetically. Talented, experienced and driven, this team will deliver results for Kathabo Media. We invest in dedicated people, internationally renowned equipment, ingenuity, creativity and a service delivery policy in which we take pride. What makes us unique is that we continually strive to stay abreast with the latest technological developments and to refine or initiate marketing trends that render outstanding results for our clients.
OUR PEOPLE We believe people are the vital part of our business. Our team comprises of hard-working, loyal, enthusiastic and competent staff members. These individuals have their own specialist areas, to top it all off, they are multiskilled which enables them to work across the board. In fact,
Our company has adequate equipment, knowledgeable and dedicated staff to provide your event with the highest customized quality production.
17 Milner Road, Waverley, Bloemfontein info@kathabo.co.za | Contact 051 430 8050 | www.kathabo.co.za
44 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
ABOUT MARU CONSULTING
100% Black Owned Professional Firm - Level 1 EME 51% Black Woman Youth Owned
95% Full-time Employed Black Youth
70% of our office are township, rural based (Eastern Cape, Western Cap, KZN and Gauteng)
We have diverse skills, Financial Experts, Forensics Consultants and Energy Experts We are very much committed in Social Economic Development
OUR APPROACH IN CLIENT SERVICE
OUR SERVICE OFFERING We strive to ensure we provide a best value for money on our professional services, it is with this premise that our operational business units are structured as follows:
• • •
Internal Control Assurance Probity Services Risk Management
• • • •
MaRu Management Consulting (Pty) Ltd has a strong government and private sector experience, our main key services are on Assurance Services; Internal Audit; Forensic & Risks Managment; Business Management; Strategy Development and Implementation; Forensics and Information Technology, and more importantly, we are committed to adding value and sustainable development to our clients within our area of expertise. Our team consists of competent and experienced personnel with the requisite skills, knowledge and capacity to provide you with tailor made quality professional services. We take the business to our clients with the seriousness it deserves, and we regard them as partners. As professional advisors, we strive for results not activity.
Responsiveness
Annual Financial Statement Reporting Monthly Bookkeeping Tax Submission Secretarial Services
Internal Audit & Risk Management Services
Enterprise Management Services
• • •
• • • •
Reliability We always have to be reliable to our clients, from our level of knowledge and insights through to our ability to deliver on time and exceed expectations. Our brand promise is delivered across all levels to promote reliability to our brand.
We are always responsible for our clients’ needs as this is a viewed as the core of our client service. We understand the client’s brief and the intended impact of our service. We are agile and capable of responding to unanticipated circumstances, additional client needs, or tighter deadlines.
Assurance We provide assurance in what we say, in what we do, and in the opinion we provide.
Tangibles Asset Planning Asset Finance Management Asset Care Services
Assets Management
Personnel Resource Secondment Project Management Project Facilitation Training and Development
Resource Planning & Project Management
Our people are trained to provide tangibles to ensure that all they bring to the client’s attention proven facts supported by tangible results.
Empathy We are always empathetic to our client’s needs and are able to provide impact where it is intended the most and within the expected time.
OUR INDUSTRY EXPERIENCE Local Government | State Owned Entities | Rail Industry | Electricity | Education | Manufacturing | Information Technology | Transportation | Housing | Development Corporations | Business Trusts | Charitable Institutions, Churches and NGO | SMME’s
OUR CONTACT DETAILS OUR OFFICES: Cape Town - Western Cape | Germiston - Gauteng | Matatiele - Eastern Cape | Umzimkhuli - KwaZulu Natal CONTACT: Office Number: 087 148 9565 | Email Address: info@maruconsulting.co.za | Website: www.maruconsulting.co.za
DON’T SETTLE
- for a retirement income that you can’t afford By Deane Moore, CEO, JUST
“In South Africa, most people reaching retirement have insufficient savings to consider aspirations. Their priority is to focus on maximising their incomes for life to cover their basic lifetime needs.” how much income to draw from these savings each year. Income is not guaranteed, but the Financial Sector Conduct Authority has published a table to show what proportion of his/her assets a member can draw at each age to have a 90% probability of sustaining their income for life (increasing with inflation each year).
Upon reaching retirement, it is vital for retirees to consider an annuity strategy that takes into account their level of income, inflation and investment risks, as well as income protection for beneficiaries if the main member passes away. enerally, a retiree has two categories of needs, namely basic lifetime needs and lifetime aspirations. Basic needs consist of a monthly income for life for the retiree and his/her spouse, which grows with inflation, to pay for essential expenses such as food, medical, accommodation, water, electricity, telephone, transport and insurance. Aspirations include flexible income for other expenses, tax planning, or to leave as a legacy for beneficiaries. In South Africa, most people reaching retirement have insufficient savings to consider aspirations. Their priority is to focus on maximising their incomes for life to cover their basic lifetime needs. There are two retirement options for providing a sustainable income for life, where this is expected to grow with inflation: a living annuity or a guaranteed life annuity. In a living annuity, retirees need to decide how to invest any pension fund retirement savings and
46 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
A with-profit annuity is a type of guaranteed life annuity that provides retirees with a guaranteed income for life that is targeted to grow with inflation each year. The table below compares the income from a guaranteed life annuity and a living annuity on a consistent set of assumptions.
In a living annuity, when the main member passes away, his/her beneficiaries will receive any capital that is left in the living annuity. In a guaranteed life annuity, retirees can opt for income to continue for the remainder of their
spouse’s lifetime and until beneficiaries are no longer dependent. This is a death benefit that is specifically focused on the ongoing needs of beneficiaries to fund essential expenses. In surveys carried out by Just, over 85% of retired people said they would prefer a secure, guaranteed income for life against investing a pool of assets and deciding how much to draw each year. Deane Moore is the CEO of Just in South Africa. He is a qualified actuary with 28 years’ experience. Deane developed Metropolitan’s original with-profit annuity product and South Africa’s first inflation-linked annuity product. He has extensive local and international experience in corporate development and strategy, marketing, and investment services. Deane has held senior positions at PricewaterhouseCoopers, Friends Provident (UK) and MMI Group. Visit justsa.co.za for more information.
GUARENTEED LIFETIME INCOME1
LIVING ANNUITY2
AGE
MALE
FEMALE
MALE
FEMALE
55
6.0%
4.5%
4.5%
4.0%
60
6.5%
5.5%
5.0%
4.5%
65
8.0%
6.5%
5.5%
5.0%
70
9.5%
8.0%
5.5%
5.0%
75
12.0%
10.0%
6.0%
5.5%
80
15.5%
12.5%
7.0%
6.0%
85
20.0%
16.5%
8.0%
7.0%
1. The guaranteed life annuity rates are for the Just Lifetime Income (HiGro) with profit annuity. 2. The maximum sustainable living annuity drawdown rates published for consultation by the Financial Sector Conduct Authority in 2018 in their Draft Conduct Standard for Living Annuities in a Default Annuity Strategy. If individuals withdraw income at these rates, they have a 90% chance of being able to sustain their income for at least as long as their average life expectancy i.e. their income will keep up with inflation until their expected death.
HUMAN RESOURCES / PAYROLL & HUMAN RESOURCES SOFTWARE
A LEADING PAYROLL SOFTWARE SYSTEM IN SOUTH AFRICA SINCE 1989 PayDay Software Systems is a leading professional Payroll and Human Capital Software Company that adds value to businesses via the application of a client-orientated and user empowerment approach, transforming strategic processes into value-added functions. We offer a broad range of home-grown, fully integrated Payroll, Human Capital and Time & Attendance software as well as related consulting and training services. Our support consultants, are the pillars that help keep our clients standing firm by providing product related and technical support for all PayDay’s Software modules.
PayDay Visual - An enhanced Employee Self-Service application. PayDay Visible - A mobile app based Time and Attendance system.
and exceed their expectations by offering solutions that are tailor-made to fit their specific business needs.
ON-PREMISE HYBRID OFFERING
Since our inception in 1989,
Includes PayDay Prime deployed on premise for access via the traditional desktop route in addition to accessing the system through the browser.
PayDay has always been on the f rontier of cutting edge technology, using only the best technological resources and support available, and as a result are able to provide a hybrid of offerings both cloud-based
Trusted by more than 3500 corporate businesses across Africa and 48% of local government within South Africa, you can be sure that PayDay Software Systems will lead your business in the right direction.
and on-premise.
We want our clients to uncover the very BEST of their PayDay Software that’s why our training courses are planned and developed strategically to help users fully understand and use the software to its full potential.
CLOUD TRANSFORMATION
At present PayDay caters for more than 40 tax countries, making us an industry leader in meeting the diverse and unique challenges presented by companies throughout the African Continent. We understand market trends and the value of business relationships and therefore continuously strive to understand our clients requirements
PayDay Virtual - An online Payroll and Human Capital Software Solution.
Through cloud transformation PayDay can host and maintain the system, offering businesses and its employees an enjoyable, stress-free cloud experience. Our cloud based solutions include: Nigel Bird CEO, PayDay Software Systems
382 Rossouw Street, Murrayfield, Pretoria www.payday.co.za | Contact 012 803 7730
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 47
TEAMING FOR HIGH VALUE NEGOTIATORS
By Adri Albertyn, Managing Director, Maurice Kerrigan Af rica
This reality check provided exact results, which were particularly useful in re-aligning team members to functions where they felt more purposeful. Most notably, the most senior person decided to take on a different tactical role while another team member took on the role of lead negotiator. Of course, the roles were practised, using the team’s tactics and extensive preparation.
“This reality check provided exact results, which were particularly useful in re-aligning team members to functions where they felt more purposeful.” After many meetings and side-meetings over an 8-week period, our team reported back that the final agreement was being drafted, in their favour and with additional value for them. They also felt that the relationship with the client had improved and they looked forward to working on new initiatives with the client. A small alignment shift had made such a huge impact in interpersonal connections.
Years ago one Saturday morning, a group of people met to devise their negotiation strategy for the renewal of a contract valued at nearly R750 million per annum. hey had worked with the client for 10 years already, so they were extremely knowledgeable and had various well crafted tactics on how to approach this scenario. However, what they were uncertain about was the interpersonal aspect – this team believed that the client was too used to them, that they were too familiar. There had been no complaints about their product and services, but since these were very similar throughout the industry, the client was looking for a differentiator by considering contracting an overseas-based competitor. The team felt quite despondent as the outcome seemed inevitable. However, there was reason for hope. In addition to their strengths and that they had worked well together, they were all well-informed about the client’s needs, which is a key element 48 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
in any complex negotiation process. Their product had not failed the client once during the previous 5-year contract, and that was difficult to ignore. As a result, we considered the every detail of this diverse team, as even slightly misaligned people can detract from accomplishing the best results possible. We implemented a meticulous reality check to ensure that each team member was confident that their way of thinking and feeling plays a useful role in the team. In this particular instance, the team realised they had not always made the best use of each team member. Typically, people are assigned roles based on their qualifications, level, or perceptions of them. In this instance, the most qualified and senior individual always took on the role of the lead negotiator, as expected, and the rest of the team fell into their places in the same tradition.
All the team members are now familiar with how to position themselves to be the best they can be, whether they are the lead negotiator, an administrator, or tactical observer, and how to use it to their team’s advantage during protracted and high value negotiations. The results they are achieving speak for themselves. The reality check applied is a sophisticated assessment that makes peak performance in a team sustainable in any context.
Maurice Kerrigan Africa is a leading corporate training company offering unique tailored interventions that deliver results every time. Contact us today for a discussion on your development needs. 011 794 1251 info@mauricekerrigan.com www.mauricekerrigan.com
HUMAN RESOURCES / RECRUITMENT & PLACEMENTS
its clients operate. It is also a matter of how well it understands the internal management, culture, psyche and resourcing requirements of a client company.
ATTAINING EXCELLENCE IN THE FIELD OF PERSONNEL RECRUITMENT & PLACEMENT Mmatseleng Consulting is a fully South African company with 100% HDI and gender shareholding. With over 10 years of existence, it was established with the purpose of providing specialized recruitment services while meeting our client’s expectations and beyond.
We are not talking about an “offthe-shelf” recruitment solution, we pay close attention to the management styles and business culture of our clients, and the dynamics and people that underpin their operations.
“We are not talking about an ‘off-the-shelf’ recruitment solution, we pay close attention to the management styles and business culture of our clients, and the dynamics and people that underpin their operations.” For us, no two enterprises are the same, and by understanding what drives our clients’ success, it enables us on how best to staff them for success in the markets in which they operate, Mmatseleng Consulting is able to match the right individuals with the right organisations. Furthermore, because not all clients have the same human resource challenges, we do not offer stock-standard recruitment programmes, but much more flexible and carefully tailored programmes that are designed to meet the differing needs of our clients. As a recruitment company, we believe in providing “hands on” recruitment services and tailored recruitment process to satisfy our clients staffing needs. We are strategically located in Gauteng, right in the heartland of South African commerce, which makes it ideally suited for obtaining the most suited candidates from the most concentrated workforce in the country.
We therefore ensure that only candidates who meets organizational culture, ethics and business objectives are referred to our clients. We look at the soft skills and culture fit as from HR perspective this makes perfect sense because its always easier to teach technical skills and provide on the job training for skills gaps than try & change personality traits and culture. OUR SERVICES CAPABILITIES AND CAPACITY Mmatseleng Consulting offers experience and expertise in obtaining and placing suitable candidates in, inte ralia, the following fields: • • • • • • • • • •
All of this adds up to the required knowledge which allows Mmatseleng Consulting to deliver excellent service. Mmatseleng Consulting believes this is not generally available to clients of executive search companies. Whether a client is in need of retained search (local and international), the recruitment of teams of specialised people, market research, confidential candidate representation, and/or inhouse training sessions on recruitment related issues, Mmatseleng Consulting has the in-depth experience, collective expertise and tried-andtrue methodology to deliver. WE OFFER: • • • • • • • •
Retained Search Recruitment of Specialised Skills/Teams Market Research Confidential Candidate Representation Interview Coaching and Preparation Recruitment Training Psychometric Assessments Reputation Management
Manufacturing FMCG Engineering Mining ICT Legal Pharmaceutical Law Enforcement Agriculture Medical
We pay close attention to the management styles and business culture of our clients, and the dynamics and people that underpin their operations. It’s not just a matter of how well a consultancy understands the external markets and business environments in which
280 Oak Avenue, Randburg www.mmatseleng.co.za | recruitment@mmatseleng.co.za Contact 010 035 3686 | 061 434 7552
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 49
The Jurisprudence of Remote Piloted Aircraft Systems is South Africa ready?
By Elijah Ramonyai, Director Litigation-Koikanyang Inc
The drone incident at Gatwick Airport in December 2018 has somewhat disrupted the aviation industry in the UK. n estimated 1000 flights were cancelled and over 140 000 passengers were affected. The frustration experienced by government, business and ordinary citizens proved to be an uncomfortable, if hypothetical question to South Africa: would we be ready to handle such a disruption? The use of Remote Piloted Aircraft Systems (RPAS), or drones as commonly known, is increasing worldwide and can no longer be ignored if we seek to not repeat the Gatwick incident. In South Africa, the RPAS are regulated by South African Civil Aviation Authority (SACAA). Legally, drones may be operated for commercial, corporate, non-profit and private operation. Let’s look at private operations, as this is one area that is difficult to manage and enforce. Private Operations means the use of drones is for an individual’s personal use, where there is no commercial outcome, interest or gain. These operations can only be conducted in restricted visual line of sight referred to as class 1A or 1B RPA. Normally, class 1A and/or class 1B RPA is 400 metres height above the surface and cannot weigh more than 7 kgs. Unlike commercial and corporate operations, private operations are not subjected to most of the regulatory rules or compliances. For example, there is no letter of approval required before operation, there is no need for the drone to be fitted with altimetry
50 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
system capable of displaying to the operator the altitude and height and there is no need for the drone to be issued with a certificate related to personnel licensing, maintenance and logbook requirements. However, there are important restrictions that must be observed by private operators when operating their drones. The pilot must observe all statutory requirements relating to liability, privacy and any other laws enforceable by any other authorities. Other notable restrictions include the following: • • • •
“Unlike commercial and corporate operations, private operations are not subjected to most of the regulatory rules or compliances.”
Cannot be operated in a 10km radius of an airfield May be used during daylight in weather conditions which is clear Not operated at a place of landing or take-off on a public road Not operated within 50m or closer from any person or group of persons, any property without permission from the property owner
For private operators, they can be subject to either civil or criminal prosecution if they don’t comply with the above restrictions or if their actions infringe on privacy rights or lead to injury or death. The most daunting challenge is do we have the capacity as a country to enforce these restrictions - is our aviation industry capable of managing potential disruptions, and will the judicial system be ready?
Elijah Ramonyai
LEGAL / LEGAL AUDIT
KOIKANYANG INCORPORATED CELEBRATING 10 YEARS Koikanyang Incorporated was founded in 2009 by Chopologe Koikanyang and has since established itself as one of the leading commercial and property law firms.
he firm has experience in various complex projects which require a multi-disciplinary legal team to work efficiently. Our team has a unique understanding of business and law and as such we bring to every legal issue an understanding of business and commercial principles.
Olckers Chopologe Koikanyang 24 years practicing experience. BProc, LLB -University of Western Cape. LLM: International Business Law- University of Cumbria, UK
OUR VALUES INTEGRITY We attend every matter with integrity, honesty and respect for our clients. INNOVATION Always seek new and creative ways to put our clients and employees a step ahead. ACCOUNTABILITY Subscribe to a philosophy of transparency and accountability in all our business dealings. ADAPTABILITY To be a flexible and dynamic firm, able to and willing to adapt to the evolving needs of our clients, employees and the legal sector.
The firm is on an exciting growth trajectory with the objective of becoming the most preferred legal service provider and an employer of choice for aspiring legal practitioners.
“The f irm is on an exciting growth trajectory with the objective of becoming the most preferred legal service provider and an employer of choice for aspiring legal practitioners.”
ious Commercial Agreements Engineering /Construction Contracts and litigation
Privatisation / Restructuring / Legislation • • • • • • • • • • • •
Compiling data room for the purpose of Due Diligence investigation Drafting PPP Agreements and review of financial agreements Review of Organisational Structure and Regulatory Framework Mining, Natural Resources and Energy Law Advice on all aspects of Mineral Resources Law Applications of mining rights and permits Conversion of rights and permits Advice on Oil and Gas Law and legislation relating to liquid fuels Drafting of all relevant contract in the mineral resources, natural resources and energy sectors Insolvency, Business Rescue Practise & Debt Collection Cross-border insolvency Business rescue related litigation and opinions
OUR SERVICES
PROPERTY LAW DIVISION
The Firm has three main departments; Corporate Commercial, Property, and Litigation. The firm also draws on the expertise of key consultants in matters where additional specialists’ skills are required.
Conveyancing (Transfers and bond registrations) including:
CORPORATE AND COMMERCIAL DIVISION Commercial and Corporate Law (General) •
DIVERSITY We embrace the diversity and distinct needs of our clients and employees and ensure that the decisions we make respect and support these differences.
•
• • •
Transactions related to logistics, facilities and transport (including rail, road and maritime) Management buy-outs Mergers, Acquisitions and Joint Ventures Negotiation, Review and Drafting of Var-
• • • •
Township developments and opening of township registers Beneficiary verification in respect of the Housing Subsidy System Sectional title schemes All matters relating to estate law and estate planning
LITIGATION DIVISION •
Conducting High Court and Magistrate’s Court Commercial and Civil Litigation, including mediation and arbitration
EFFICIENCY Clients enjoy cost related efficiencies.
Business Address: No1 North Avenue Riviera-Rosebank 2196 JHB Branch Office: No. 13 Proctor Avenue Golf view Mafikeng 2745 info@ock.co.za | Contact 011 883 2065 | www.ock.co.za
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 51
MANAGEMENT CONSULTING
Empowering Institutions That Enable Africa’s Development We are Ntiyiso Consulting, fast growing management consulting firm in South Africa, whose purpose is to empower institutions that enable Africa’s development.
he firm was founded and led by three highly motivated partners from science background with a combined business and consulting experience of over 50 years. Africa’s public institutions are besieged with performance problems which hinder the continent’s development. These institutions are facing complexity and capacity problems to deliver on their mandates, be it revenue realization, service delivery and or developmental goals. The current solutions in the market are traditional consulting practices of delivering strategies through slides decks and minimal implementation support. This is hardly adequate to solve these problems. Institutions need a partner who will walk the journey with them. In response to the above, Ntiyiso Consulting offers three value propositions, viz. Revenue Management, Business Transformation and Industrialisation Consulting. In Revenue Consulting, we improve cash positions of large and
medium sized municipalities that are struggling with complexity and diversity of services that result in suboptimal levels of income. In Business Transformation Consulting, we turnaround or improve the revenue, profitability or social mandate performance of large and medium public entities struggling with complexity and meeting performance targets. In Industrialization Consulting, we unlock economic opportunities on behalf of communities and regions struggling with unemployment and lack of economic opportunities. Our client base is cities, smaller municipalities and state-owned entities in South Africa, with great potential to expand into the rest of the continent. This market is predominately serviced by traditional management consulting firms who deliver strategies through slide decks with
minimal implementation support. This is hardly adequate for institutions who require a partner who will walk the journey with them. Our competitive advantage lies in how we package our services. We provide end-to-end tailormade solutions that are evidence based and delivered hands-on rather than just delivering slides to a client. We also built into our solutions agility and flexibility as opposed to being rigid. Finally, our African background as a firm allows us to bring into our solutions and interactions with clients, cultural affinity – which adds into the quality of our offering. In addition to the above, Ntiyiso Consulting has just completed the Seed Business Transformation Programme, a programme by the University of Stanford Graduate School of Business. The programme not only gears the business for upscaling, but also contributed in the sharpening of our value proposition in the market. Our growth strategy going forward is anchored on investment into new but complementary products such as fintech and drone services while exploiting further growth of the existing product lines by taking them into new markets.
Building 3, Stanford Office Park, 12 Bauhinia Street, Highveld Technopark, Centurion, South Africa info@ntiyisoconsulting.co.za | Contact 012 940 5435
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 53
Afrox Kick-Starts Black-owned Start-ups By Johann Cilliers, Head of Communications, Af rox, The Linde Group, Region Af rica
How does a business improve its Broad-Based Black Economic Empowerment (B-BBEE) rating six levels in just a few years? The basic answer is commitment, but that isn’t very helpful if you’re wondering where to start. ne can throw money at it, give away shares, support community-based projects or invest in educational or skills-based training. But for most of us, especially in these hard economic times, we don’t have the luxury of additional budgets to really make an impact. Plus, are these areas the focus of the current B-BBEE regulations? The starting point is to clearly understand where you sit in relation to what the regulations set out to achieve. More often than not, especially for medium sized enterprises, the answer lies with procurement. How do these suppliers fit with your company’s ethos, approach to safety and ethics, governance? Will they prove to be reliable? Can they maintain quality? Is it fronting or a truly black empowered business?
curement? In terms of a company like Afrox, it was a case of thinking laterally. For instance, we have drivers in our employment who are fully qualified, familiar and fully compliant with our safety standards, code of ethics, know our products and our customers. Why not set them up in their own transport businesses? Not only does this approach secure our B-BBEE points by enabling start-up black enterprises, but it has a positive impact on the budget; lowering employment costs, eliminating direct transport maintenance and insurance overheads and allows the company to focus on its core business. If, like Afrox, you also have Government contracts whereby a percentage has to be spent on empowering black businesses, this approach meets that requirement well.
BEE has been a feature of business in South Africa for over two decades, and most of us have answered the above questions in relation to our existing black suppliers. In fact, most of us are maxed out on this front.
Plus, as these black transport businesses grow and expand with your operations, they have a pool of suitable recruits from within your distribution area.
So, where can we squeeze more value from pro-
But distribution is only one aspect that can prove beneficial to achieving a Level 2 from a Level 8
54 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
rating, as was the case with Afrox. Another is growing market share, achieving volumes, by targeting South Africa’s informal township economies. For example, Handigas (instead of wood, paraffin or charcoal) is making remarkable inroads in townships – thanks to lateral thinking on how to support the growth of small black businesses. You may also consider teaming up with bodies like LEAP, which provides a variety of services that support entrepreneurs looking to ensure their businesses become feasible working solutions. But to answer the original question of how a company improves its rating substantially and quickly, there really is not one single solution. Afrox chose to support the rise of small enterprises. Perhaps that’s the way to identify what’s best for you – focus on those core areas of the B-BBEE regulations where you can add value to your rating and extract real value for your business at the same time.
MINING
SPECIALIST MINING SERVICE PROVIDERS
“It is no longer good enough to ‘sell what we mine’. At Ukwazi we ‘mine what we sell.”
Ukwazi, which means “to know” in Zulu, is one of the largest specialist mining service providers in Africa. The company offers independent advisory, technical systems integration and operational contract mining services to a range of clients, across multiple markets and geographies, spanning 27 countries on five continents.
sector; in partnership with its clients, technical partners and stakeholders.
ABOUT UKWAZI Ukwazi is a South African based mining services provider committed to transparent and effective transformation within the industry, in partnership with clients and technical partners.
Ukwazi’s services ensure for ongoing industry growth, skills development and capacity building - impacting people and communities across the value chain.
As a level 2 BEE contributor, Ukwazi firmly believes in effective transformation, sustainable growth and shared value within the resources
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we do mining
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Head Office: Unit DSF01, 2nd Floor, Block D, Southdowns Office Park 22 Karee Street, Southdowns, Centurion, 0157 Contact 012 665 2154 | info@ukwazi.com
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BONUS
Skills Development Expenditure on Black People
Expenditure on Bursaries for Black Students at Higher Education Institutions
Skills Development Expenditure on Black People with Disabilities
Skills Development Expenditure on Black People participating in Learnerships.
Number of Black People Absorbed
6
4
4
6
5
Points and target reduced
New indicator relating to bursaries for tertiary education
Unchanged
Points reduced and restriction to Cat B, C & D with no distinction between employed or unemployed
Limited to Cat B, C & D learners only
3.5%
2.5%
0.3%
5%
100%
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 55
HUMAN RESOURCES / PAYROLL SOFTWARE
CRS delivers the A-Z of HR as easy as 1-2-3
Businesses are turning to outsourced service providers to help them manage human capital management (HCM) compliance and unlock the value of their people investment. CRS Technologies’ A-Z of HR services helps to simplify this process.
he HR function in business is becoming increasingly complex. Legislative and regulatory requirements are only some of the facets falling within the broader HCM function. There is also the need to understand various technology systems, changes in labour law, on-site and off-site administration, as well as recruitment. Even though some might view HR departments as only focused on managing leave and other administrative matters, it is more complex than that. The HR department may not generate revenue, but it is critical to operations through its contribution to expenditure savings, which encompasses effective employee recruitment and hiring, learning and development, and performance management. Obviously, not all businesses possess all the skill sets necessary to address every HR requirement or do so consistently. This is where experienced service providers are essential. CRS’s full spectrum of HR services, which includes legislative compliance, is geared to lowering the risk associated with human capital and maximising return on investment. Its A-Z of HR services is an alphabetic listing of every service available through the company.
56 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
CRS takes a holistic approach to HR, empowering managers with cost-effective solutions and services that enhance the efficiency of this environment, making it an asset that continuously adds value to the entire organisation. The A-Z encompasses everything from audits of contracts and policies to zero tolerance policies and procedures. It also includes Employment Equity Act compliance, industrial relations specialisations, labour legislation advice, qualification verification, recruitment services and retrenchments, among others. Not only is this A-Z a novel way of communicating exactly what we do for the market, it is also a practical guide for anyone looking for a specific service. And because it is an outsourced offering, clients can supplement, complement, or even replace their HR administrative processes, thus optimising the balance between internal control and delegation while reducing expenditure. By leveraging the services of our HR experts, companies can enhance, clarify and enforce policies and procedures to improve employee job satisfaction and performance.
HR & Payroll Solutions
ABOUT CRS TECHNOLOGIES CRS Technologies is a leading provider of solutions and services to the growing human resources (HR) and human capital management (HCM) industries. Following its establishment in 1985, the Johannesburg-based company quickly found its niche in the HR, people management and payroll sector and soon matured into the specialist of choice for blue chip organisations and SMMEs throughout Africa. Today CRS is acknowledged as the most proficient HR and payroll solutions company on the continent, underpinned by solutions and services that help create workplaces of engaged and committed employees. Our approach to market is about maximising value between employer and employee, integrated with innovative technology that optimises people and grows businesses.
Centric House, Mellis Court, Mellis Road, Rivonia, 2191 info@crs.co.za | Contact 011 259 4700 | www.crs.co.za
PROPERTY
Property Sector Charter Council strives for lasting transformation in the property sector through impactful solutions “A combined targeted Skills Development fund that will uplift and develop talented and determined learners to further their studies in the property sector, whilst impacting the sector in a meaningful and sustainable way.� In June 2019, CEO of the PSCC, Portia Tau-Sekati, presented the findings of the 2019 State of Transformation Report which revealed skills development as a key intervention to address major transformational challenges in the property sector. The PSCC, therefore, aims to enhance transformation by using the unique and knowledge characteristics to actively promote and deepen meaningful participation. The PSCC has formed a foundation where the various skills development challenges within the property sector can be addressed in a structured and holistic manner.
The Property Sector Charter Council (PSCC) has had a busy year in 2019. It has seen the appointment of a new PSCC chairman, new Minister of Public Works and Infrastructure, the State of Transformation Report 2019 release, and several new initiatives.
ne of the most exciting of its projects is the launch of the Property Sector Skills Development Foundation, a platform which aims to enhance the overall level of skills in the industry. The Broad-Based Black Economic Empowerment (B-BBEE) Act of 2003 gives the establishment of all sector charter councils. Its aim is to enable meaningful participation of the previously disadvantaged in the mainstream of the South African economy, specifically in one of the 11 sector codes that exists, the Property Sector Charter Code.
A combined targeted Skills Development fund that will uplift and develop talented and determined learners to further their studies in the property sector, whilst impacting the sector in a meaningful and sustainable way.
The Property Sector Skills Development Foundation is a platform where not only skills development becomes a solution but also a creation of
job linking opportunities for talented graduates sponsored through the foundation to change skewed patterns of ownership and control. The project is one which PSCC chairman, Dr. Sedise Moseneke, has highlighted as critical for transformation going forward as it will pull in the various efforts of the property sector and consolidate them to leverage on the power of collaboration within the sector. The most rewarding benefit for companies in the property sector is making a real difference support and contribution to the Property Sector Skills Development Foundation. This support will result in receiving full points towards the relevant Skills Development Line item of the B-BBEE. To get more details on how you cancontribute to the Property Sector Skills Development Foundation contact the PSCC PSCC on +27 11 880 9918
ABOUT PSCC Property Sector Charter Council is a transformation charter as contemplated in the Broad-Based Black Economic Empowerment Act (No 53 of 2003) and the dti Codes of Good Practice on B-BBEE and lays the basis for the development of a code of good practice for the property sector, as envisioned in Section 9(1) of the B-BBEE Act.
Block A, 1st Floor, Cullinan Place Office Park, Cullinan Close, Morningside, Sandton www.propertycharter.org.za | www.propertycharter.org.za
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 57
Corporate Training Centres to keep on the books, or not?
By Sean Jones, Managing Director, Artisan Training Institute (ATI)
There are both financial and social reasons why running in-house technical training centres should be strongly considered. In this article, Sean Jones, managing director of the Artisan Training Institute (ATI) unpacks the cost implications of keeping corporate training centres alive in a sluggish economy.
Table 2 highlights the drastic effect of the variable cost per month working at 50% of capacity. The nature of the cost structure drives the variable costs per learner to R24,095 versus R14,482. TABLE 3 - BREAK-EVEN
Over the past 12 years managing ATI as a private training provider, I’ve observed how changing market dynamics affect the different approaches corporate companies take towards technical training. The decision whether to insource or outsource technical training need to be reflected on with a long-term view of the institutional relevance of the training centres. Unless business has no access to quality training providers, there is no commercial rationale for building corporate-owned training centres. Financially, companies must question the utility of ongoing fixed costs which represent a weak balance sheet, versus making technical skills training a variable cost. It’s also prudent to understand in which sectors they operate; training or their core focus of mining or engineering, for example? Consider these three scenarios: • • •
A corporate training running at full capacity A corporate training centre running at 50% capacity A breakeven scenario
Annual costs
Variable costs
R1,256,231
Fixed costs (excl Depr & Fin costs)
R12,383,270
TOTAL
R13,639,501
In-house cost (learner/month)
Variable costs
R628,115
Fixed costs (excl Depr & Fin costs)
R12,383,270
TOTAL
R13,011,386
R1,080,358
Fixed costs (excl Depr & Fin costs)
R12,383,270
TOTAL
R13,463,629
R14,496
R14,482
The calculations show that a private provider’s variable cost to a company remains constant, which means capacity building costs are predictable regardless of market conditions. The graph below summarises the three scenarios and illustrates the predictable variable costs per learner instead of huge swings in operating costs per learner. Monthly training cost per learner
R14 496 R14 482
86% In-sourced
R14,482
In-house cost (learner/month)
Outsourced to training provider
R24,095
R14,482
The calculations presented in tables 1-3 and graphed summary are based on a typical training facility offering six basic trades. The estimated CAPEX to set up a facility is R35-million (excluding land and buildings) catering for a maximum capacity of 90 learners per month. Our calculations exclude these capital costs. Operating capital (OPEX) calculations exclude depreciation and finance costs.
58 | FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20
Outsourced to training provider
To achieve a break-even variable cost, a technical training centre must run at 86% capacity, which is difficult to achieve during market slumps.
50%
R12,629
In-house cost (learner/month)
R12 629
R14 482
Outsourced to training provider
TABLE 2 - HALF CAPACITY Annual costs
Variable costs
R14 482
Although the variable cost per learner for running an in-house facility is R12,629 versus R14,482 for an outsourced facility, in the unlikely representation where a training centre runs at full capacity, this monthly variable cost advantage is not sustainable. Most corporate training centres in South Africa today are operating far below 50% of their capacity.
OPEX @ 50%
Annual costs
R24 095
TABLE 1 - FULL CAPACITY OPEX @ 100%
OPEX @ 86%
100% Out-sourced
In-house centres certainly play a significant role in skills development. However, when revenues are constrained, corporates begin to view these same centres as burdensome, triggering retrenchments and downscaling or outsourcing and selling them off. In my view, very few corporate training facilities manage to achieve sustainable throughput to justify their long-term institutional relevance and that’s why we see wide-scale retrenchments, coupled with training facilities that lie mostly dormant. ATI holds enormous respect for industry’s long-term commitment to training. The mining and engineering sectors have been beacons of technical competence for decades. However, companies need to carefully consider the deployment of capital in technical training initiatives to prevent the establishment of additional non-productive assets. We’re also proposing a critical stocktake of existing facilities, assessing whether keeping them on the books are in the best interests of business and labour.
SKILLS DEVELOPMENT / BUSINESS SKILLS TRAINING
“I can’t get a job without experience. I can’t get experience without a job.” Visit www.yes4youth.co.za to gain up to 2 levels on your B-BBEE scorecard.
WHY YES IN SA TODAY? YES is a business-driven initiative which is breaking new ground by pioneering a partnership with government and labour, in collectively tackling a national plan to build economic pathways for black youth. The adage says, “if you’re in a hole stop digging”. With the overwhelming economic and social challenges we face as country, it is time to try a new approach. YES gives you an opportunity, to join with other businesses in pooling resources and collaborating to create thousands of jobs across the country. Play your part in a grand plan to operate outside your individual business silo in order to achieve broad and scaled impact. As business leaders, your concerns about South Africa appear validated. After all, there’s no escaping the glaring reality of the numbers; unemployment, crime, low GDP growth – all of which paint a bleak picture.
R1 BILLION+ injected into local economies
Tasked with the responsibility of steering your organisation through the volatile business landscape, it’s understandable to narrow your focus to the immediate, most pressing organisational problem of stimulating growth while cutting costs. After all, no meaningful societal change can happen overnight, nor does it fall within your business mandate. Continuing with a system of exclusivity, entrenches the problem we see. Over one third of youth are locked out of pathways to participating in building their future.
ABOUT YES • •
•
By creating innovative opportunities for youth to work with YES, we build a future where all South Africans can play a part and contribute on our economic and social journey. There is a choice, you can become caught up in the barrage of a consistently negative narrative that makes its way into the media, board rooms and corridors across the country. Or, you could become part of a good news story sweeping from the metros and reaching into rural Mpumalanga and KwaZulu-Natal.
Provides one-year paid employment opportunities with technological and learning support Participants are provided with a YES smartphone that serves as a learning tool, as well as a monitoring and evaluation platform to share experiences and peer learnings. It furthermore connects youth to digital networks and builds technological literacy Community-based ecosystem – “The YES community hub model” – creates an enabling and supportive environment for small businesses, stimulates local innovation and generates a positive economic spillover for communities
TO DATE:
• • •
YES has created over 21 000 new work opportunities YES has created over 21 000 new taxpayers 36+ Corporates have achieved B-BBEE Level Ups with YES R1 billion+ will be injected into salaries & local economies through these 21 000 jobs
South African leaders have understood that we must look to the long game and the big game, our youth are the future economic powerhouse.
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SAY YES.
SIGN-UP TO LEVEL UP. HELP CREATE YOUTH EMPLOYMENT TO GROW THE ECONOMY.
2 Arnold Road, Rosebank, Johannesburg www.yes4youth.co.za | Contact 087 330 0084 | collaborate@yes4youth.co.za
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 59
A Afrox .............................................................................................. 2, 3 Afrox Kick-starts Black-owned Start-ups ......................................................... 54 Alicornio Africa The Good, the Bad and the Ugly of Business Intelligence ........................................................ 14 And Change .................................................................................. 15 Artisan Training Institute Corporate Training Centres to Keep on the Books, or Not? ................................................ 58
B BEE Connex Socio-Economic Development to Bolster Your Business ............................................................. 36 Trends, Tips and the Future ............................................... 38 BEE Manager ............................................................................... 12 Bigen Africa Services ............................................................. 13
C CRS ..................................................................................................... 56
D Debt Rescue ................................................................................. 19 Working Class to Suffer Under New Debt Relief Bill .................................................................. 18
E EATON Africa What Does a Low Carbon Policy Future Looks Like? .................................................................................... 20
F Fetola ....................................................................................... 64, 65 Flight Centre Business Travel .......................................... 61
H Hamba Nathi Travel & Events .......................................... 63
TRAVEL / EXCLUSIVITY TRAVEL AGENCY
“FCBT offers its clients several flexible payment choices to make sure their cash flow is not impacted as a result of their travel needs. Over the past few years, we have seen the demand from our clients for travel on credit rise. A 30-day payment option can offer SMEs much-needed breathing space when it comes to the payment of their travel requirements.” says Andrew Grunewald.
THREE WAYS TO TAKE BACK CONTROL OF YOUR CORPORATE TRAVEL EXPENSES With business travel rated one of the five biggest expenses for a business of any size, it is hardly surprising that cost-control remains a high priority for travel managers and business owners today.
Global business travel spending reached US$1.33-trillion in 2017 and is projected to grow exponentially in the years to come according to the Global Business Travel Association (GBTA). What should be worrying you as a business owner more is that employee overspending can eat up to 30% of your total travel and expense (T&E) budget at a typical organisation. How can travel managers take back control of their travel expenses, curb overspending while at the same time keeping their road warriors happy? Andrew Grunewald, Brand Leader for Flight Centre Business Travel (FCBT) shares valuable advice: BACK-TO-BASICS: MAKE SURE YOUR TRAVEL POLICY IS CLEAR AND CONCISE Are your employees unsure which airlines or hotels they are allowed to book? Do they know which category of car rental is allowed? Are they in the know as to what the company considers to be acceptable travel expenses? If your travel policy is gathering dust at the bottom of the drawer, it might be time to go back to basics and review this important document. Without a clear and concise company travel policy in place, there are no guidelines on entertainment allowances, changing or cancelling flights, or what travel classes may be booked. Employees will for example not know the rules surrounding whether or not they can book a more expensive but more flexible ticket because they’re likely to change it. Having a travel policy in place not only provides boundaries and clarity, it also ensures the traveller’s wellbeing while on the road.
LIMIT OVER-SPENDING BY USING A BILLBACK FACILITY With employee overspending representing up to a third of the T&E budget, it is important to nip this habit in the bud. An unnecessary upgrade here, a few drinks from hotel mini bar there… These seemingly harmless expenditures can sabotage a company’s travel budget. By combining a billback facility with a virtual credit card, companies can limit excessive expenditures. Billback is a service provided by a Travel Management Company (TMC) like Flight Centre Business Travel, which covers all travel costs, consolidates them and then bills them back to the company. It is possible for companies to determine a total authorised amount on the billback instruction, which will limit what travellers are able to spend on their virtual card. Any excess expenditures will have to be settled directly by the traveller with the hotel at checkout. EXPLORE INTEREST-FREE CREDIT FACILITIES Why put your business’ cash flow under pressure if you don’t have to? Opting for an interest-free credit account is a straightforward way to help the company save money. Instead of a company receiving receipts, and invoices and expenses from all angles, the finance department will be issued with one, consolidated invoice that indicates the total travel spend.
ABOUT FLIGHT CENTRE BUSINESS TRAVEL Flight Centre Business Travel (FCBT) is the specialist business travel solution for Flight Centre. As one of the few Travel Management Companies with a BBBEE Level 1 rating, we provide our customers throughout South Africa with outstanding service and exceptional value, delivered by our expert travel managers. As part of the Flight Centre Travel Group, it’s the recipient of the coveted Deloitte Platinum Employer Seal for 2 consecutive years and operates in 6 locations locally and 4 worldwide. FCBT take the load off you by providing specialist service through a dedicated travel manager who is available 24/7, and free after-hours assistance to handle any last-minute changes or in case of an emergency. With over 20 years of travel expertise, we have the global power to negotiate excellent rates for your flights, accommodation and car hire requirements. We cater for any growing SME business and with that in mind, we offer flexible payment options like 30-day interest-free accounts, travel lodge cards and billbacks.
Block 8 Pendoring Office Park, 299 Pendoring Road, Blackheath, 2195 Contact 0877 40 51 61 | www.flightcentrebusinesstravel.co.za
FINANCIAL MAIL ESSENTIALS - ABC of BEE 2019/20 | 61
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P
Ithuba Holdings .............................................. 24, 25
Payday Software Systems ................................ 47 Petroleum Agency SA .......................................... 7 Property Charter Council ................................. 57
J JAW Design ............................................................... 52 JC Decaux ..................................................................... 11 JDM Empowered Placements Disability - The Misconceived Terrain ......... 16 JUST Retirement Don’t Settle for a Retirement Income That You Can’t Afford ....................... 46
K Kathabo Group ....................................................... 44 Koikanyang Incorporated ................................. 51 The Jurisprudence of Remote Piloted Aircraft Systems ..................................... 50
L LFP Group ...................................................... 1, 28, 29 Under Pressure - Pressure As 2020 EE Reports Deadline Looms ............................ 30 LFP Training ............................................................. 43 Tackling Unemployment Through The YES Movement ........................... 42
M Maru Management Consulting ................... 45 Masiszane Fund ...................................................... 39 Maurice Kerrigan Teaming For High Value Negotiators ...... 48 Mekan Engineering Services ......................... 27 Mmatseleng Consulting .................................. 49
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R Regent Business School ................................... 23 How Business Schools Can Prepare Students for Employability ............................... 22
S South African Institute of Chartered Accountants ..................................... 35 Siyaya Skills Institute .............................................. 5 The Effects of the Latest Amendments to the Codes ..................................................................... 10 Skills Development Corporation Skills Development in the Emerging Fourth Industrial Revolution ........................... 26
T The Document Warehouse .............................. 21 Traverse Advisory ................................................... 33 Unlocking Real Economic Transformation in South Africa Through Enterprise Development .................................... 32 TrioPlus Development ........................................ 41 Enterprise Development - Beyond the BEE Scorecard ......................................................... 40 TSIBA .............................................................................. 37
U Ukwazi ........................................................................... 55
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Nedbank ......................................................................... 9 Ntiyiso Consulting ................................................. 53
VeriCred Credit Management Services ... 17
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Y
Old Mutual ................................................................. 66
Yes4Youth .................................................................... 59
100% BLACK WOMAN OWNED LEVEL 1 BBBEE AVAILABLE 24/7, 365 DAYS
We book flights, cruises, cars, shuttle services, hotels, conferences & events. Bloemfontein
East London
Johannesburg
Kimberley
051 447 4552 072 495 7731 (after hours) info@hambanathi.co.za www.hambanathi.co.za
043 492 0411 072 503 8190 (after hours) res3@hambanathi.co.za www.hambanathi.co.za
010 492 3688 076 537 7096 (after hours) 063 694 7995 (after hours) admin2@hambanathi.co.za www.hambanathi.co.za
053 831 3982 079 056 8655 (after hours) reservations@hambanathi.co.za www.hambanathi.co.za
MAXIMISING THE SUCCESS OF BUSINESS INCUBATORS AND ESD PROGRAMMES
“Every Rand spent on enterprise and supplier development needs to yield a tangible return – to the business, to corporate stakeholders and to the nation.” Catherine Wijnberg, Fetola CEO
Contact us: +27 21 761 5255/ 086 111 1690
info@fetola.co.za
www.fetola.co.za
Incubator Services: • Diagnostic services: Review of established incubators; improved efficiency & success • Capacity building: Practical training for incubator managers • Incubator establishment & consulting support, including tools & templates • ESD programme design and implementation
YOUR INVESTMENT HELPS US HELP THE PLANET
Great things are possible when you contribute to the continent’s future with us. Giving Africa and its people the great future they deserve takes an investment partnership like no other. That’s why we’ve invested R32.7 billion of your money and ours into sustainable, green energy projects all over the continent. With your sustained support, we can keep creating a better future for all. Read more at oldmutual.co.za
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