How to improve your B-BBEE Compliance Level in the world of COVID-19?

01 May 2020 12:31 By Angie Lanham-Love
Is there going to be a “holiday” due to the COVID-19 Lockdown?

I have been asked this question many times over the past weeks. I therefore decided to address the topic more formally, by sharing my professional BEE perspective. This communiqué contains my views on BEE compliance and what the BEE landscape will look like in the coming months.   


The reality is that Covid-19 will force many companies to look very carefully at their medium to long term spend strategies. BEE spend and compliance is only one of the areas that need to be addressed, along with staffing, revenue, growth, costs etc. One thing that I know for sure, is that planning is essential for us as a business community to move forward in these challenging times.   


BEE is an expensive exercise if not managed effectively and efficiently. There needs to be careful consideration as to how to maximize your level of compliance with the limited supply of available money to spend. There is a strong commercial element to BEE.  Your BEE spend must make commercial sense in terms of revenue/market share gained OR revenue/market share retained OR a combination of both.   


This is more true now than ever before.   


In my opinion, there will not be a “BEE holiday”. There can’t be. We cannot have companies with valid certificates, having been measured on the current stringent set of BEE criteria and then other companies, still to go through verification, measured on a less stringent set of criteria. It is neither fair nor possible to manage.  


The DTI would have to release two sets of new guidelines or gazettes going forward. If we look at the clarification notice issued just last week on how to measure skills absorption points – there is certainly no intent to relax any requirements (more details on this can be sent through to you on request). Moreover,to ensure that the BEE process continues during lock down, SANAS have issued rules and guidelines for ratings to be followed by Verification Agencies, during the lock down period, to ensure that BEE continues without a hiatus.   


Right now, most companies will lead their future BEE planning with: “we do not have the cash flow to maintain our current BEE level”. And I get that!    


But now more than ever, it is critical to maintain your BEE compliance level. Yes, I am proposing that you maintain or even improve your BEE level. Any astute BEE professional will advise you that maintaining your BEE credentials is critical, especially now, as this will be the key differentiator in winning /maintaining business going forward.    


It makes sense for all companies (including your customers) to target the more “cost-effective” procurement points now. It will reduce your cost of compliance.  In a BEE market where everyone is targeting procurement points, your BEE level of compliance is critical- as your level will positively (or negatively) affect the procurement points that your customers are after.    

My advice is to try and achieve as close to full points on the Procurement scorecard as you possibly can. Even a 3 or 4 point gain in procurement is 3 or 4 points less that you need to spend on the other elements, such as Skills Development or Enterprise Development.     


Remember that procurement is the driver of BEE – you have a BEE certificate because someone is buying something from you and they are asking for your BEE certificate and more importantly, procurement is the one element that DOES NOT COST YOU MONEY! 


I re-iterate that the advice of your BEE professional is more critical than ever right now. Your BEE strategy needs to be carefully plotted and planned. Choose Skills Development initiatives that allow you to take advantage of salary spend at all levels in the organisation, especially management levels. Select training initiatives that have a relatively smaller cash outlay and a larger salary portion. There are only a few of these training initiatives that cater for management levels out there. Our training academy has developed such a programme, with a blended learning approach, to assist our clients at this time.   


It is imperative that your BEE professional provides clear and properly considered advice on “savings“ of this nature. By implementing the correct approach, it is possible to achieve a reduction in the cost of compliance.    


Times are tough and planning is essential. If you do not have a BEE professional that is able to offer efficient and cost-effective guidelines and solutions – we can help you to navigate these uncharted waters.    


BIO:

I am Angie Lanham-Love, the MD of Lanham-Love Consulting and I have been involved in the BEE industry since 2004.  I have built up a wealth of experience across all elements and sectors of the BEE codes. Contact me on 083 3004167 or mail me at angie@lanham-love.co Alternatively visit our websites at: 

www.lanham-love.co

www.llcacademy.co.za