Maximise your Skills Development scorecard before year-end

Is your skills development and training strategy on track for the financial year-end?

The Skills Development pillar under the Revised Codes of Good Practice (RCOGP) is a crucial component of the Broad-Based Black Economic Empowerment (B-BBEE) framework. It emphasizes the development of skills among previously disadvantaged individuals, particularly black South Africans, to address historical inequalities and enhance their employability, economic participation, and entrepreneurial potential.

Skills development has long been a priority for companies who aim to comply with BEE requirements and with just two month to go until the close of the year, companies with a December financial year-end are under pressure to ensure that all training initiatives are on track to maximise their B-BBEE scorecard. This crucial process includes reviewing your company’s skills development budget against training initiatives planned or undertaken before the financial year-end to ensure  strategic alignment to the B-BBEE scorecard.

Properly managing this process ensures compliance, drives meaningful transformation, and ultimately benefits the bottom line. Here's a breakdown of why this review process is critical:

1. Maximizing Skills Development Points on the BEE Scorecard

The skills development pillar is one of the most critical components of the BEE scorecard, not only in the investment of black employees and youth, but it also makes up a significant percentage of the total scorecard. By reviewing your skills development strategy at year-end, you  can ensure that sufficient budget and resources are allocated to maximize the points under this category, and improve your compliance level.

2. Addressing Under Utilisation of Budget

In our experience we have seen companies allocate a budget for skills development at the beginning of the financial year, but not fully utilise it. A review towards year-end allows the business to assess if the allocated budget has been effectively used. If not, there may still be time to invest in additional training programs or skills initiatives that can benefit both employees and the company’s skills development scorecard. Under-utilised budgets represent missed opportunities for both business growth and employee empowerment, so a review ensures every rand counts.

3. Aligning Skills Development with Business Objectives

While optimizing the BEE scorecard is crucial, it’s also essential that the skills development initiatives align with the company’s strategic goals. By reviewing the budget, a company can assess whether the training and skills development programs funded have contributed to employee development in ways that benefit both the individual and the business. If there is a misalignment, the budget review can help redirect future funds towards more impactful programs.

4. Leveraging Grants and Tax Rebates

The South African government offers various incentives to businesses that invest in skills development, including Sector Education and Training Authorities (SETA) grants and tax rebates. By reviewing the skills development budget before year-end, companies can ensure their spending is on track to maximize these opportunities. Strategic spending in this regard can help capture these benefits, further optimizing the company’s financial position.

5. Planning for Future Financial Years

Lastly, a review of the skills development strategy is a forward-looking exercise. By understanding how funds were spent and what outcomes were achieved, businesses can better plan for the next financial year. This includes setting aside appropriate funds, identifying gaps and new skills priorities, and ensuring that BEE objectives continue to be met in the future.

Regularly reviewing and optimizing the skills development budget before the financial year-end is not just a compliance exercise – it’s a strategic priority; one that ensures that the company not only maximizes its BEE score, but also builds a skilled and empowered workforce, thus remaining competitive in the market. In the long run, this contributes to both business success and the broader transformation goals of the country.

If you require assistance to close out your skills development strategy please contact us on enquiries@idm.ac to arrange a time to speak about how to optimise your position before the year end.