Understanding the 2024 sectoral targets

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Frik Boonzaaier | Senior Consultant | Human Capital Transformation | The BEE Chamber | mail me |


On 1 February 2024, new Draft Regulations were released, containing new Draft Sectoral Targets, and unpacking what businesses need to consider when setting goals.

The public now has 90 days from release to comment on the draft. These targets, instrumental in advancing the goals of economic transformation, introduce significant changes while maintaining the overarching emphasis on the Economically Active Population (EAP) as the primary measure of success.

The two key changes from the 2023 to the 2024 Draft Sectoral Targets are:

  • Unified sectoral targets

In a departure from the previous approach, the Draft Regulations consolidate sectoral targets into two categories: “Designated Groups” and gender (including White Females), therefore no longer indicating individual racial targets for Africans, Coloureds and Indians.

  • Elimination of Regional Sectoral Targets

The 2024 regulations do away with Regional Sectoral Targets, streamlining the focus on representation aligned to national targets only.

A strategic approach is recommended

In the release, the Department of Employment and Labour indicated that the targets were formulated based on data from the 2022 EE Report profiles, B-BBEE Sector Codes, and sector dynamics obtained from written submissions during consultations.

In terms of incorporating the amended regulations, when a business decides to set its targets, I recommend a strategic approach. The proposed 5-year Sectoral Targets serve as minimum benchmarks toward achieving equitable representation within each occupational level.

Employers must therefore consider the sectoral targets as interim goals towards EAP alignment. Employers should also not set higher targets for those groups whose representation has already exceeded their EAP in a particular occupational level.

Likewise, the evaluation of compliance from the Department of Employment and Labour’s perspective will still consider the alignment of different designated groups within each occupational level in relation to the National and Regional EAP. In this way, adherence to sectoral targets becomes a critical factor in determining the pace at which a sector will achieve overall EAP alignment.

The EAP remains paramount, emphasising that companies aiming for EAP alignment will naturally meet the lower Sectoral and BEE Management Control Targets.

Dimensions and clarity to compliance

The alignment methodology of the latter remains unchanged, e.g. with the 60% alignment target for senior management based on full EAP.

Inclusion of the Department of Employment and Labour, and Solidarity Agreement in the Draft Regulations adds further dimensions and clarity to compliance assessment, e.g. the concepts of ensuring alignment with inherent job requirements, employment of suitably qualified individuals, the role of skills and experience, as well as the justifiable grounds for not meeting targets.

Where some may argue that the targets are not realistic, I believe the proposed sectoral targets are feasible, offering opportunities for improved BEE ratings and increased ability to attract and retain business.

The risks are real, as non-compliance may result in the absence of an Employment Equity Compliance Certificate, restricting businesses from government dealings, as well as the risk of a fine being imposed. Therefore, governance and operational alignment with EAP are critical to preventing regression.

In conclusion

Stringent policies, encompassing all Human Resources (HR), practices, and ongoing monitoring are key measures to ensure continued progress.

The Draft Sectoral Numerical Targets represent a significant shift in South Africa’s Employment Equity landscape. Businesses that proactively engage with these targets stand to gain both in terms of compliance and enhanced business opportunities. Success therefore hinges on a strategic and adaptive approach, with continuous monitoring and alignment with the broader economic transformation goals.


 



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