Paul Janisch

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.