With the ability to add up to two full levels on your B-BBEE scorecard, the Youth Employment Service (YES) B-BBEE incentive is one of the most popular when it comes to those doing scorecard planning. However, Measured Entities have to think hard about how they implement the programme as it can materially impact other parts of the business including Management Control, Skills Development and Employment Equity.
Here we unpack this concept in further detail.
How does the YES incentive work?
Gazetted in 2018, YES has become the cornerstone of a number of organisations B-BBEE strategies – particularly those who struggle with the ownership elements of their B-BBEE scorecards.
The incentive allows organisations to get additive recognition on their B-BBEE scorecards through the creation of youth jobs for those defined as black South Africans.
An organisation will use the higher of 3 calculations to determine a YES target that will give them either:
- 1 level-up on the B-BBEE scorecard
- 1 level + 3 bonus points
- 2 levels-up on their B-BBEE scorecard
The incentive has become one of the most popular in South Africa with nearly 2000 organisations participating and creating over 200 000 jobs for young South Africans since 2018.
Do I need to be the employer of the youth to get YES recognition?
One of the great benefits of running a YES programme is that the Measured Entity does not need to be the employer on record for B-BBEE recognition. Provided the Measured Entity can show a direct link to the related youth and the youth are correctly uploaded against the Measured Entities YES profile [on the YES system] and you can show a flow of funds to the employed youth, this will suffice for B-BBEE recognition.
From a cost perspective, this can be relevant for a couple of reasons:
- As the employer, you are often expected to invest in technology, office space as well as the time component of supervising the youth employees
- If you are operating in a regulated industry where your terms of employment are governed by bargaining councils, you may be expected to employ youth at a significantly higher rate than if the funded youth are not on your payroll
This becomes particularly relevant in the context of Employment Equity Developments
With recent amendments to the Employment Equity legislation, organisations with more than 50 employees need to submit Employment Equity reports.
Many mid-size businesses are actively trying to stay below the radar with 50 employees but are pushed close to the limits when they include YES youth into their overall headcounts. By expanding the programme to include
YES and the legal sector
There is an interesting recent development involving the YES incentive and the legal sector which is likely to come under scrutiny. Following recent amendments to the Legal sector B-BBEE codes, the Legal Sector Codes (LSC) are now compelling law firms utilising YES to employ lawyers or more specifically “young attorneys who completed their articles but are unemployed thereafter”
Many participating law firms have historically placed their externally hosted youth in organisations including SMEs and ECD centres.
While there has been no formal change to the YES legislation, this creates an interesting new challenge and cost element for law firms.
If you are a law firm who are grappling with this, we have an exciting project with capacity to place up to 200 youth into the legal value chain.
Going beyond the basics when it comes to the YES B-BBEE incentive
When looking to integrate YES into your B-BBEE and impact strategies, there is always a natural cost-benefit analysis – particularly as your cohorts get larger and your investment more significant.
While many employers will focus on keeping their costs low and adopting a “compliance-first” mindset. More forward-thinking organisations have alternative perspectives which might include:
- Paying higher base-line salaries
- Training and mentoring
- Additional skills development of the youth – including Artificial Intelligence and micro-certifications
- Targeted absorption pathways
Our team has extensive experience in implementing YES programmes and we are happy to work with you to structure the appropriate programme.
Are you ready to outsource your YES programme?
At Decusatio Human Capital Solutions, we have one of the most experienced implementing teams when it comes to YES programmes. With over 7 years experience and hundreds of youth placed, we can assist you to not only place youth, but ensure impactful outcomes.
Should you wish to engage with our team on supporting an outsourced YES programme, please do not hesitate to reach out to us.