Paul Janisch

Consulting, opinions and speaking engagements and a few other topics that I know quite a lot about

If you are looking for a realistic perspective of empowerment in South Africa and southern Africa (including Namibia, Zambia, Zimbabwe and Botswana), I am able to provide that perspective at your AGM or any other presentation. It's relatively clear from this blog that I know what I'm talking about. Over the last 20 years I've gained a very thorough understanding of the following topics

• Government procurement
• Parastatal procurement
• BEE trends within Africa
• Impact of BEE legislation
• Multinationals and empowerment within Africa

And I am very happy to provide you with an overview of these topics.

In addition I have consulted to a wide number of public and private organisations throughout South Africa on

• Public Private Partnerships
• Listed shareholding analysis
• Tax advice on BEE initiatives and tax structures (through a partner)
• Opinions on empowerment commitments that may be contractually binding
• BEE plans for tenders
• Joint Venture BEE certificates
• General opinions (similar to this one)

Or if you need someone to come in and find those points within your organisation for your next verification please contact me and we can discuss what is required. You can email me or phone me on (+2783) 227-1375.

Has black economic empowerment run out of steam?

It might be more apt to say it has run out of road.  It’s obviously very topical because News24 invited five opinions on the subject.  Two of them (Gabriel Crause and Moletsi Mbeki) argue that it delivers nothing.  Duma Gqubule delivered his predictable diatribe about how much of the JSE is owned by black people.  His argument is repetitive and tiring.  He never looks beyond the determined shareholding of the various companies listed on the JSE.  I would imagine, and I think this is confirmed by his opinion piece, that his source of information is based on a sample of annual reports and BEE certificates.  This is a very poor method to actually determine any type of ownership.  He conveniently forgets about mandated investments like unit trusts and pension funds.  He also has not looked at the actual shareholders, in fairness this is a daunting task and cannot be done with any form of accuracy.  But if you are going to cast 5.8% aspersions then you need to make it absolutely clear how you came to this conclusion.  It’s flawed. I do, however agree with his conclusion that “we must rewrite the empowerment rules and bring an end to the voodoo system of accounting for black ownership.”  I never thought I would ever agree with him, I think he’s a bit of a hazbeen.

Predictably the black management forum concludes with “Instead of calling for the end of B-BBEE, the BBC advocates for the acceleration of its implementation in order to ensure that the majority play a meaningful role in the economy to safeguard our democracy.”  They also note that black people own 5% of the economy.  That is patently wrong and is probably only drawn from the same stats that Duma conjured up.

I think the most meaningful article was written by Lumkile Mondi.   In this article Professor Mondi puts forward a case that goes along the lines of “black man you are on your own”.  Instead of laying the blame in the usual places he distributes it between the economy and government policies.  I have to quote him

Nimrod Zalk in his doctoral thesis, titled "Things we lost in the FIRE [Finance, Insurance and Real Estate]", shows how the false promises by white business conglomerates to the Mandela government of black economic participation destroyed the industrial base of South Africa as they exited South Africa and how preferential procurement of HDSAs incentivised imports to the detriment of white-owned South African businesses destroying industrial capacity base and employment for many black workers.

It is the economic policy choices of the ANC and B-BBEE implementation that destroyed commuter rail services, road infrastructure, electricity supply, schools, libraries and many livelihoods as the economic growth slumped, employment collapsed, and poverty deepened.

The Covid-19 pandemic added to the misery. It is not surprising that many did not turn up at the polls on 29 May and those who voted supported other parties, resulting in the ANC losing its overwhelming majority in Parliament.

It was vote of no confidence on the policies of the ANC and their implementation. A vote for something new for a better life for all.

The whole article must be read.  It’s balanced and doesn’t throw stones unnecessarily.

This blog is full of discussions about how the implementation of BEE was left to those businesses that didn’t have enough ownership to not be compliant.  By setting the QSE threshold at R50m turnover in most codes they excluded a large number of black owned businesses from participating in the whole BEE process, something that the BEE strategy actively discourages.  This exclusion provided the leeway that some black-owned businesses needed to catapult themselves into the awarding of state contracts.  All it took was an affidavit and recently created company and off you went (in spite of the BEE codes wanting a bigger certificate for larger contracts).  We are however not alone.  There was a famous Covid PPE case in the UK which was a carbon copy of what our connected people are capable of doing.

PPE Medpro was one of the private companies awarded valuable contracts having been referred through this High Priority Lane by Baroness Michelle Mone. PPE Medpro was set up on (registered) 12 May 2020. It was awarded its first contract, worth £81 million, a month later on 12 June to supply 210 million face masks. The Department awarded a second contract a couple of weeks later on 26 June, worth £122 million for sterile surgical gowns.

The first codes were published in 2007, our good friend Rob Davies gave the initial codes no time to work and went about creating the new ones.  He knew that these revised codes were designed to allow black-owned businesses the necessary latitude to go about gaining government business almost exclusively.  His intention was to punish everybody else by setting targets and requirements that have now taken on the dimensions of an additional ANC tax.  Unfortunately for our bolshie, the clever lawyers in Bloem figured out a way to get around the ownership requirement using the modified flow through principle.  This was then closed off and was replaced by another type of ownership structure developed by the Pretoria Afrikaners.

Why have these get-arounds been so popular?  Simple, the cost of compliance is so high that companies will do anything to get those costs down.  For those whose turnover is over R50m, including black wholly-owned businesses, the problems (read costs) multiply.  Compliance is expensive.  No wonder skills development schemes started developing using tax breaks like the Employee Tax Incentive break.  It’s simply because companies could now comply and get a decent score.

I’m going to use a Duma-approved sensational figure.  The FirstRand Group’s staff cost during the 2023/4 year was R32,515,000,000.00 (I think this is R32bn).  If they want the 4 points you get for training unemployed people then that will cost them about R480m).  Where is the logic here?

I think our government should start having frank conversations with companies in South Africa.  Those companies that need to implement a full scorecard.  They should ask them whether this process is working.  Everyone of the large companies will say “We believe in transformation, we are proud of our BEE performance.”  They won’t tell you what they really think.  BEE compliance costs a fortune, whole departments have to be created to monitor and implement it.  It has created an industry.  Yes, it’s created employment, but it’s a major grudge purchase.  I have saved my clients amounts in the hundreds of millions of Rands over the last 20 years and they reluctantly pay me my meager fee.

Nothing – other than Duma going through your annual report and BEE reports concluding that you are untransformed.  His analyses have been quoted by anc politicians for years.  Because it’s a smoke screen.  It hides the fact that this government has stripped the country bare.  And on top of this they are an unequal partner in this process.  They have destroyed the education system.  You can’t employ people that the government has systematically neglected over the last 30 years.  And let’s not forget that the BEE codes are a legal requirement for government entities and departments.

Yes – BEE has failed and will continue to do so.  It’s a useful scapegoat for the government.  They won’t get rid of it and if they make it more stringent then I’ll figure out other ways to comply. 

Skills Development support for motorcycle delivery riders - press release for immediate release

The mushrooming motorcycle delivery business has changed our lives for the better. We are used to having people deliver almost everything that can be ordered online directly to our homes. As a consequence of this convenience the number of riders increases consistently with these motorcycles filling up our roads. The truth is that the barrier to entry in this industry is very low. There are no such requirements like a Professional driving permit (PrDP). All that is needed is a license and a serviceable motorbike. Nicknames like Kamikaze don’t do the brands that these motorcyclists represent any favour.
Without the formal training that public transport workers receive we cannot expect these riders to know all the aspects of their daily business activities. For instance, the might not understand the importance of customer service and time management as well as the management of their finances and how these tie into the maintenance of their motorcycles.
Recognising that these motorcyclists have embarked on a career of customer service in the guise of the delivery of goods, RISE BUSINESS CONTINUITY developed a programme that guides delivery drivers through all the aspects of their business. This goes from customer service to managing technology, basic motorcycle maintenance as well as basic business skills.
“The delivery service people are a vital part of our business and home lives.” Says RISE DIRECTOR Rudolf Rautenbach, “their industry is dynamic but the basics will always remain the same.” The RISE DELIVERY INTERNSHIP PROGRAMME aims to professionalise the industry. The course is delivered over a 12 month period in a series of videos that can be accessed at any time. Each month a new video is posted on our application. Once the programme is finished the rider will be given a certificate of completion.
“The programme is not specifically for the riders, although they benefit from it directly, it also has a distinct benefit for the retailer.” Says Rautenbach. “The motorcyclists are brand ambassadors, even if their vehicles are not branded by the retailer. If the rider’s bike is in a shabby state or they are rude to the customers this has a bearing on that brand.” To encourage the retailer’s support the retailer co-signs the final certificate.
“In some cases we’ve seen the retailer offer incentives for completion of the programme in the form of shopping or airtime vouchers.” Rautenbach observes. “It’s all about building a professional riding community.”
The gig economy has just arisen and it’s not had the time or the impetus to develop itself and look to become more professional. We feel that we are helping this process.”

Issued by RISE BUSINESS CONTINUITY. Mr Rautenbach can be contacted on 082 320 4067 or [email protected]

The curriculum is here. It's a first.  An online course that is sponsored by the company the rider rides for.  It doesn't cost much a month.  The key is that the rider gets a certificate that comes from RISE BUSINESS CONTINUITY and the sponsor.  If the sponsor wants BEE points for this, they will be added in at no charge.

 

 

 

What Neanderthals can tell us about graphite - introducing neanDNA (TM)

For those who don't know, the correct pronunciation is neanderTALL. 

Two articles have come to light.  The first one was written by Gabriel Crouse and was published in the Daily Maverick.  In the article Mr Crouse argues (not incorrectly) that the proposed 20,000 ill-qualified labour inspectors who will inspect, amongst other things, compliance with the Employment Equity Act.

Historical race inspectors?

[W]hat will these 20,000 people be asked to do? If a company says that its managers are all black, and an inspector comes along, by what standard will they check if that is true?

Comparing this to the apartheid method of race determination, Crause adds

“How will the inspectors know whether someone is telling the truth about their race?”

The answer is, they will not. There is no workable legal standard. The notion that any department can simply say “whatever your apartheid classification was, or would have been, that is what it is for us, too”, does not work, because in the apartheid system it was legally possible to reclassify – and thousands upon thousands of people did so.

I, ON THE OTHER HAND, HAVE A SOLUTION

Recent studies have found that homo sapiens did not wipe out Neanderthals, they in fact mated with them.   Scientists say that the genomes of most modern humans contain up to 4% Neanderthal DNA.  The same article notes

However, Neanderthals haven’t vanished completely. There could be one sitting in your chair right now, reading this article. Well, sort of. Many modern humans have some admixture of Neanderthal DNA, an indication that Homo sapiens and Homo neanderthalensis knew one another, also in the Biblical sense.

Neanderthal DNA is estimated to account for an average of 1% to 4% of the genomes of modern humans with ancestry outside sub-Saharan Africa. The share of Neanderthal DNA is highest among East Asians, intermediate among Europeans, and lowest in Southeast Asians.

Their genetic heritage is much smaller in sub-Saharan Africa: from none to 0.3%, depending on whom you ask. This indicates that the DNA exchange between both human species most likely occurred outside Africa, though there is some evidence of minimal remigration back into Africa: Ethiopians and other peoples in the Horn of Africa have around 1% Neanderthal-derived DNA.

If we follow this logic, then all African (most African) people in South Africa lack Neanderthal DNA.  To qualify this - most African people from Mali to the Cape Point have little or no Neanderthal DNA.

LAUNCHING neanDNA(TM) TEST KIT

This groundbreaking race inspection tool will assist all race inspectors to determine who is African and not African.  It comes in a portable backpack and all you need is a swab of saliva.  Put it into the test tube and you will detect the imposters within five minutes.

DISCLAIMER

The neanDNA Test kit will not be able to tell you whether the person is South African by birth.

Hurry - order yours today before the South African government depletes our stock of 20,004 kits.

 

 

There’s talk of fightback against Tau with his legal sector BEE code - Moneyweb article

This is a better version of my last post.  Moneyweb published it.  The word in the hallowed legal chambers is that it's getting a lot of attention.  The whole article is below because Moneyweb has a paywall.  It's a good news publication - please read it.

There’s talk of fightback against Tau with his legal sector BEE code

This could be the last time we are taken for fools (and litigation will show the extent to which the government bulldozes legislation through).

By Paul Janisch 2 Oct 2024  04:05 

‘Taunting the legal sector’ and ‘cocking a snook at business organisations like Busa’ – Minister of Trade, Industry and Competition Parks Tau. Image: GCIS

BeyondWords

There has been very little black economic empowerment (BEE) activity from the Department of Trade, Industry and Competition (dtic) since Rob Davies vacated his post as minister of the then Department of Trade and Industry in 2019. To most of us this was a case of no news is good news.

The good news came to an end when current minister Parks Tau gazetted the legal sector code in September.

Normally this is an unremarkable event; most of the time these codes are received, absorbed and implemented.

This time things are hopefully a little different. There is a backstory behind this code and its gazetting. The Draft Legal Sector Code closed for comments in March 2021.

The code lay dormant until just before the May 2024 elections.

The story goes that John Jeffery, then deputy minister of justice and constitutional development, asked the Big Five law firms whether they would litigate if the draft code was gazetted. This was answered in the affirmative. Jeffery consequently didn’t pull a National Health Insurance (NHI) on the legal sector.

It’s not clear why the Big Five law firms objected to the code, but I am willing to wager a small amount of money that it wasn’t about the transformation of the sector.

Gazetted

Tau has now gone ahead and gazetted the code, which is binding on all entities that operate in the legal sector. It’s very likely all legal firms will need to use this code for their next BEE certificate, so there’ll be no lead-in time for acclimatisation.

This is a very typical ANC stunt, specifically when it comes to empowerment legislation.

The ANC knows that empowerment is a very emotional concept and that it can push through codes and policies because those who have to implement them are unlikely to complain.

But just because the legislation deals with empowerment and transformation doesn’t mean it’s right. Those of us who derive a living from BEE advice know how badly thought-out almost every single BEE code is.

Bursaries for black students 

Davies left South Africa with a requirement for the provision of bursaries for black students at tertiary institutions. It’s obvious that he was trying to solve a ‘fees must fall’ problem.

But he set the targets too high, offered too few points, and didn’t get the South African Revenue Service (Sars) to provide some sort of tax break for compliance. As a result, these points are largely ignored because of the sheer expense of compliance.

I suspect something similar is at play with the Legal Code.

Wordplay

Tau’s press release states:

“This administration has committed itself to accelerating transformation, guided by the preamble of the Constitution of the Republic of South Africa which emphasises the need to correct the injustices of the past. This is captured in the statement of intent of the Government of National Unity (GNU) [author’s emphasis],” Tau said.

This is a smoke screen. He is suggesting that there is an endorsement from the GNU, tacit or express. This is not true.

The DA is not particularly impressed with BEE legislation and would quite happily change it for something more effective. No, this gazetting is the old ANC at play.

Simply put, it’s a shot across the legal fraternity’s bow.

And the legal fraternity cannot ignore it …

I offer a few reasons why a legal challenge would benefit our economy:

1. If John Jeffery asked the Big Five whether they would litigate, then the justice department must be aware of the issues that have been submitted. It is simply daring the legal sector to make the next move. By not reacting we become the pawns the ANC government has always treated us as.
2. Part of the litigation will show whether the dtic and the justice department paid any heed to the comments they received. It’s a known fact that this government (GNU or otherwise) does not pay much attention to comments on legislation. Litigation will show the extent to which the government bulldozes legislation through.
3. The BEE codes are designed to benefit those who least need the benefit. This is an article in itself. Litigation may show that the legal sector codes are exactly the same, where we have certain silks being briefed for cases that they have no intention of winning.
4. Not only is Tau taunting the legal sector, he’s also cocking a snook at business organisations like Business Unity South Africa (Busa) and Business Leadership South Africa (BLSA). Every week both organisations publish articles about the importance of business-friendly legislation and adherence to the rule of law.
5. There is a history of court cases that have been fought in the name of transformation. The B-BBEE Commission has found itself in court on a few occasions because its findings have been devoid of fact. On each occasion the court has found against it. Similarly, the South African National Accreditation System (Sanas) was taken to court by SERR Synergy, and didn’t bother to defend the action. Litigation is nothing new here.
6. Perhaps the most important reason why this code needs to be taken to court is because South African jurisprudence will benefit. Empowerment legislation, like every other piece of legislation in the country, is subject to the Constitution. Thus far there has been a fear to litigate because of the potential negative consequences that such litigation might invite. If anything, South African law needs certainty.

Empowerment-related legislation is a sort of sacred cow. We all suffer as a result.

I have scoured the deepest recesses of the internet to find a copy of the code. Nothing has appeared yet. Perhaps the minister is waiting for the legal papers before he decides to share the code with us.

We’ve been taken for fools for many years. This could be the last time.

Minister approves the Legal Sector Code - dti is just the same

Except this time the risks are potentially a lot higher.

Parks Tau is no better than bolshie bob or slaptjips, which means parks needs a nickname, I'll use parksandrecreation in the interim.  He's approved the Legal Sector Code in spite of the fact that the largest legal firms do not agree with it.

Here's a backstory for the reader.

There was a rumour going around that the dti was going to gazette the legal code before the elections.  John Jeffery (I forget what his position was but he's a waste of space anyway) asked the big four legal firms whether this would invite litigation.  The answer was "most likely".  But parks being an old anc deployee (so good his parents named him in the plural - I certainly hope they weren't thinking about the average park in South Africa when they named him), went ahead and gazetted it.  He's so committed to this process that he hasn't bothered to post it on the dtic's website.

It just smacks of the rod davies playbook.  I'll explain.

davies (bolshie bob to his enemies) was (I really don't know what he's up to now and I don't care) a zealot.  He was steeped in communist ideology and when you mix this with anc incompetence and fuck-you-ness you have an amazing cocktail of uselessness.  He was not interested in what the public thought of his BEE codes.  He paid just enough attention to the comments he received to demonstrate that he might have read them.  Have you noticed that his attempt to contain the fees must fall movement by adding bursaries into the skills development mix has failed.  Failed dismally because no one wants to support a politicised student and you get nothing from SARS for the contribution.  He was so hellbent on pushing this through that he attempted to scuttle the YES project by insisting that you get all the bursary points before you qualify for YES.  That's the level of deludedness we had to deal with.  The old anc.

And parksandrecreation is part of the old system.  He's trying to bamboozle us by saying

“This administration has committed itself to accelerating transformation, guided by the preamble of the Constitution of the Republic of South Africa which emphasises the need to correct the injustices of the past. This is captured in the statement of intent of the Government of National Unity (GNU),” Tau said.

This is safe because the DA is too busy fighting Cyril's arbitrariness to worry about arbitrary lawmaking.  In fact they'll leave BEE alone because they have other plans.  I would do the same.  The problem is that the institution running BEE is useless, in spite of a DA deputy minister.

I was speaking to a friend who knows about the big firms and he says they want to know why they should litigate as opposed to just accepting it.  They don't want to be seen as the whites who are scuppering transformation, however pushing through legislation that is unjust, unfair and absolutely unconstitutional (understand that no BEE code has been tested for constitutionality yet) in the name of transformation doesn't give you a licence to legislate.  Here are my reasons why the big four (and Sakeliga) need to take it on review.

1. If John Jeffery (whatever his name actually is) knew that it had problems that would raise the ire of the legal fraternity (not all of it) then those problems must go beyond the transformation aspect.  Those issues need to cleared in court
2. I suspect that there are certain procedural processes that have not been followed.  This must be interrogated.  I'm absolutely sure that bolshie never followed due process when it came to the codes
3. How are these codes going to accelerate transformation?  BEE has been an abysmal failure because it was never thought through properly.  It was then left to people like me to figure out every single shortcut and work around.  I can't find the code - it's just not anywhere where it should be.  I think that there is a crony aspect here where certain extremely incompetent advocates are going to benefit more than anyone else.
4. parksandrecreation is laying down a challenge to the likes of BUSA and BLSA.   Both of these organisations will save this country in the long term.  He wants to see what they are going to do.  If they blink here then he'll push his luck further
5. It's time that entities other than SAKELIGA stand up.  We've seen some very successful litigation against the BEE Commission - they've lost every case, and SANAS.  There is an appetite for decent legislation and fair processes.  Let this one go and they'll continue.  This is the proverbial shot across the GNU's bow.  It's fair and reasonable
6. How will South African jurisprudence benefit from this litigation?  Probably massively.  I've written before about how the government ignore comments.  If this process is not questioned and ventilated then they'll continue doing what they do. We will be worse off if they don't

 

Even if you spend the money we discussed in last week’s email and still don’t get to a level 8

We’ve been writing about the Property Practitioners Regulatory Authority (PPRA) and their irrational decision to only award or renew a Fidelity Fund Certificate (FFC) to a level 8 BEE contributor, over the last few weeks.

Last week we showed that a level 8 certificate could cost an estate agency whose turnover is R10m about R211,000 per year.  But spending the money doesn’t mean that you will actually get a level 8 certificate.  And it’s very clear that the PPRA, specifically Thato Ramaili have little or no understanding about the workings and pitfalls of BEE. 

BEE Compliance is ridiculously complex and expensive.

The Property BEE code is unnecessarily complex, we’ve simplified it for this email.  It states that if your turnover is in excess of R2.5m then you need to implement a full BEE scorecard to become compliant (unless of course your turnover is between R2.5m and R35m and you are at least 51% black owned – then you are automatically a level 2).  But if you don’t have at least 10.1% black ownership (the target is 25.1%) then you will drop a level.  This means that to get to a level 8 you in fact have to get to a level 7.  A level 8 is 40 points and a 7 is 55 points, that’s a substantial difference in points.  The table below is a summary of the scorecard.

ELEMENT	POINTS	COMMENT
Ownership	27	Target is 25.1%, but you would need a minimum of 10.1% to not drop a level. However 10.1% will give you about 12 points in total
Management Control	9	Requires black people at board level. The target is 50%
Employment Equity	11	Black representation at senior, middle and junior levels in the business. Target is 60%
Skills Development	17	Spend on the training of black people.  We showed last week that this is R180,000
Enterprise and Supplier Development	35	We look at the BEE scorecards of your suppliers and the money you’ve given to help black owned businesses become sustainable
Socio-Economic Development	2	Donations to black charities
Economic Development	4	The good news is that this is not applicable to Estate Agents
TOTAL	105

This is probably what a typical mid-size estate agency could look like

Element	Sub element	Likely points awarded
Ownership		0
Management Control		0
Employment Equity		3
Skills Development		17
Enterprise and Supplier Development	Procurement	10 (out of 25 points)
	Enterprise Development	5 (out of 5 points)
	Supplier Development	5 (out of 5 points)
Socio-Economic Development		4
TOTAL		44 points

That’s 11 points short of the 55 points you need because there is no ownership.

Or you could use the Ownershield system to get to level 2 at about 2/5ths of the total cost we discussed last week.

Free Property BEE Seminar – 13 June 2024

Ownershield is hosting a free one hour on-line seminar at 10:00 on Thursday the 13^th of June 2024 discussing compliance complexities and simpler, reversible solutions.  Please email us to book and feel free to invite as many people as you like, if necessary we will arrange a second seminar. We can accommodate 100 people at a time.

Why skills continuity and retaining corporate memory is so important

A recent article in a South African publication discussed how certain public officials fear losing their jobs after the conclusion of the 2024 South African general elections.   The article discussed how certain people had been employed by the most dominant party and this party was likely to lose its dominance.  This has not happened in South Africa for 30 years, most people felt that their jobs were secure.

The problem for the citizens in that province is that if new people in upper management are brought in to replace those political appointees they could  probably have no understanding how that provincial administration is supposed to work.  And because the outgoing administration hasn’t implement an Intraternship programme the employees under them will not know how to train the new appointees.   This has a major impact on the citizens of that province.  This is probably not the impact an incoming political party wants to have on their voters and rate payers at the outset.

Corporate continuity is not only important to government departments.  It is just as applicable to companies that have been subject to a merger or acquisition.  The new owner may want to rationalise jobs and will do so through a series of interviews that don’t actually discuss how that person understands the job that it is interviewing internal people for.  There is a lot more to interviewing a person who is hoping to retain their job after an acquisition.  Traditional interviewing techniques can never covering this.  But examining the records of the Intraternship programme will show how that person works in the team with the people below and above them, and most importantly how adaptable they have been when it comes to innovations proposed by the people in the same Intraternship programme.

Intraternships extend even further than that.  A shareholder may want to know that there is a culture of internal learning in the organisation that encourages innovations that lead to more cost effective delivery of that company’s mandate. 

This is the reason why RISE TRAINING AND DEVELOPMENT issue a  RISE CERTIFICATE OF CONTINUITY (RCC) at the completion of every Intraternship programme.  This offers shareholders and stakeholders assurance that if there any major changes in personnel the work can continue and that the new people will be up and running in a much shorter period of time, whether they occupy executive positions or lower.

A Free Seminar

The response to the emails we have sent out has been incredible with many people requesting a follow-up seminar.  We think this is a good idea and will be hosting a free online seminar on the 20^th of June 2024 at 10:00 Central African time.  If you would like to attend please click on the email link and let us know how many people would like to attend.  We’ll confirm your attendance.  We are restricted to 100 people but will arrange a second seminar if the demand is greater.

Click on the email link to confirm your attendance. 

Training the trainer to respond to innovation

All of us are natural trainers. It’s a talent we were born with. Not all of us are natural trainers when it comes to imparting information in the workplace. This is a learned process.

Imparting knowledge is a vital component of our learning existence. We do this at school when we write exams. As leaders of a sports’ team it’s imperative that we get messages across to the team with urgency and in such a way that the members of the team answer it.

The workplace is different. There are many agendas, egos and positions that needs to be considered. In the past it was simply a matter of transferring knowledge in a one to many fashion. This has all changed because of the pace of change and the multiple means of knowledge acquisition. For a trainer to be effective, that trainer needs to know that they are experts in their field but there are people around them that may have mastered a certain aspect of the job that the trainer and colleagues may not be aware of. This could be critical information that everyone in the seminar room could benefit from. In fact this two way transfer of knowledge must be encouraged and nurtured. It’s not unusual for the trainer to feel threatened by this expertise. Embracing this transfer leads to three desired outcomes.

• It introduces innovations in the workplace
• Creates a greater level of respect between colleagues
• Should lead to efficiencies in the workplace that may not have been considered in the past

We have found that the EXCHANGE method of training the trainer to be the best approach when it comes to developing and encouraging INNOVATIONS in the workplace.

EXCHANGE is made up eight components

Engage	Start out with an open mind by letting the people in the room that you are an expert but not an expert in everything
eXplore	Look for ways to train and to receive information
Challenge	Put concepts out to the room. Ask for ideas. Debate as to how these ideas can be incorporated in the workplace
Habits	We are looking to nurture new habits and to understand how existing habits can be improved. Habits can lead to complacency. But habits can be removed
Adapt	Adaptation is key. Some adaptations may take a while and require new technology. Most habits require a minor change in attitude
Normalise	Innovations must become a normal part of performing a task or job. Getting the buy-in of all the players requires normalisation
Grow	The trainer wants their team to grow in confidence and in turn they themselves will grow in confidence because everyone is benefiting from the process
ReinforcE	Reinforce these innovations over a 12 month process through seminars and training sessions. Each session looks to improve on the session before

Each person on this programme is regarded as an intern known as an INTRATERN. This is not casual on-the-job training, it is formalised programme that rewards each person with a certificate of accomplishment. Something that makes that person more useful in the workplace. It can be used for promotion purposes too.

To learn more go to Rise Training's website

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Emulation leads to innovation, this applies to the workplace as well

All of us are a product of emulation. We learn to perform almost every function by copying someone. We’ve been doing this since we were infants. By the same token everyone of us are in fact capable of training other people to perform functions that we are competent in. Training each other is one thing, improving on what we have learned from each other is how we excel.

Studies have shown that 82% of employees to be the most effective training methods. This is because there is already a trust relationship between those doing the training and those receiving the training. There is little doubt that those people who do the work are best equipped to teach people how to perform their functions. But that does not mean that the trainer is receptive to learning from their peers how to do their functions more effectively.

The key lies here in encouraging a free flow of skills transfer and then rewarding and recognising those who have gone through the process. This is done by way of Intraternships ™. Intraternships are a system of internal internships that teaches the trainer to invite innovations from those who are being trained, capturing those innovations and then changing workforce behaviour by adopting those innovations. An Intraternship does not replace formal training it merely reinforces practices within an organisation that could be bolstered by further training. Each person that undergoes this training is then recognised with an Intraternship certificate at the end of the 6-12 month period of learning. The certificate tells the world that not only is the employee skilled in their job but has demonstrated the necessary capability to adapt to the evolving workplace. This is all done at a fraction of the cost of conventional training.

Go to Rise Training to find out more

How much does a level 8 BEE certificate actually cost? PPRA content (Estate Agency dilemma)

Last week we demonstrated that if your turnover is between R2.5m and R35m and you have 51% black ownership then you all you need to do is sign an affidavit that shows that you have requisite ownership and you have a level 2 (100% ownership is a level 1, again with an affidavit).  This is more than acceptable to the PPRA.  PPRA’s legal manager and acting transformation manager, Deli Nkambule, explained that “the PPRA’s position is that it will not issue an FFC unless a compliant BEE certificate accompanies the application.

“The accepted level of compliance is 40 points or more (BEE Level 8). You will not be issued a BEE certificate if you score below 40 (making your BEE certificate non-compliant),” she said.

The reported quote shows a complete lack of understanding of the technical and financial considerations that are required just to get to a level 8.  We’ll discuss this in the next email. 

A BEE scorecard is made up 5 elements.   We’re only going to focus on those points that have a financial consideration to them.  The table below makes a few assumptions

• The cost of labour in a smaller estate agency is 60% of turnover. This is based on the 50/50 revenue split between the agent and the agency.  We’ve added on a further 10% for support staff
• The Net Profit After Tax (NPAT) in the last financial year is 5.62% of turnover. This figure comes from StatsSA.
• The estate agency’s revenue in this example was R10million in the last financial year.

The three elements that require a financial outlay are

1. Skills development (spend only on black people) – 3% of payroll (if the agency does not employ any black people then this will have to be spent on training of black people outside of the organisation)
2. Enterprise and supplier development (assisting black owned businesses to become sustainable) is 1% of NPAT each

• Socio-economic development (financial contributions to charities where the beneficiaries are at least 75% black) is a further 1% of NPAT

We have then added on a further R15,000 for the actual BEE certificate to be issued.

Turnover/Revenue	R10 000 000.00
NPAT	R536 000.00
Payroll	R6 000 000.00
Skills development spend on black people	R180 000.00
Supplier Development	R5 360.00
Enterprise Development	R5 360.00
Socio Economic Development	R5 360.00
Verification costs	R15 000.00
TOTAL	R211 080.00

This is an annual cost of compliance and the costs increase as the turnover increases. 

Next week we’ll show you that even if you do spend this money there is no guarantee that you will arrive at a level 8.

If you would like to know more about level 2 BEE compliance that will cost you a quarter of that amount take a look here.