BEE compliance in ICT, MAC sectors improves
Both upped ownership, according to the Sanlam Transformation Gauge report, but the absence of strategy in the former and skills retention in the latter pose problems
The council focusing on information and communication technology (ICT) empowerment has entered into partnerships it hopes will improve transformation compliance and ensure sustainable initiatives.
The sector, whose targets are onerous compared with other industries, improved its BEE scorecard this year, but still lacks in areas, especially socioeconomic development.
The ICT Sector Code is one of the most challenging to comply with given its higher targets on ownership, enterprise development and socioeconomic development, says the Sanlam Transformation Gauge, adding that the number of points required for compliance is higher than the generic codes.
The council has adopted a partnership approach to support the implementation of the ICT Sector Code and promote compliance beyond it to ensure transformation initiatives are sustainable and impactful, BBBEE ICT Sector Council chair Andile Tlhoaele said the report.
The charter council has partnered with the South African National Accreditation System to ensure companies submit annual reports to improve reporting. It recently signed a memorandum of understanding with telecoms regulator Icasa to ensure companies applying for licences are consistently adjudicated, the report stated.
This year, the sector increased ownership, management and control, and attained 91% in skills development, it said.
The biggest obstacle to transformation in the sector is the absence of a sector transformation strategy based on the 2005 charter to support the implementation of the ICT Sector Code, as well as the delay in gazetting the proposed draft amended ICT Sector Code 2020, despite it being submitted to the department of trade, industry & competition, said Tlhoaele.
The sector scored 88% on black ownership, with listed companies outperforming unlisted entities. The management control pillar of the ICT scorecard has traditionally been the weakest. This year it improved to 61.48% of target, from 53.9%, the report said.
However, the sector is also grappling with employment equity laws that are a mismatch with its scorecard.
“The challenge for the ICT sector is that the employment equity sectoral targets for the ICT sector are extremely onerous,” Shernon Davis, a director at Transcend Corporate Advisors, a BEE consultancy firm, stated in the report.
The sector is competing for talent, not just in South Africa, but globally. “In a sector where it is already challenging to retain talent and appoint staff with the required skill, the sectoral targets reduce the available talent pool even further.”
She said legislation governing ICT and requirements around skills programmes “does not change quickly enough to match the rapid pace at which the ICT industry changes. Still, ICT’s skills development target shot up to 91.48% of target this year from 80.5% last year.”
Davids said for employees in this sector to remain relevant, they need to continually invest in skills programmes.
In the marketing, advertising and communications (MAC) sectors, Lerato Ratsoma, MD at Empowerdex, said there were overall improvements in BEE scorecards, though in most cases the industry has not reached the 2021 levels. “Indications are that this should be better next year,” she said.
According to the 2023 Sanlam Transformation Gauge, the MAC sector remains on level 4. Management control stands at 51% of target, from 45% in 2022. Ownership improved to 87.5% of the target, from 73% last year. Skills development was 89%.
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