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The role of demographics in BEE
16 October 2019
 
“From our recent BEE verification I’ve come to understand that demographics have quite a role to play when it comes to your planning for a good BEE scorecard. However, I’m not quite sure exactly where it comes into play and how you need to plan for this. Can you shed some light on how I must consider demographics in our BEE planning?”

Demographics can be defined as statistical data relating to the population and particular groups within it. While the DTI BEE Codes of Good Practice (“BEE Codes”) refer to demographics this is not specifically defined. Demographics also only come into play under the Generic scorecard while Qualifying Small Enterprises (QSEs) and Exempt Micro Enterprises (EMEs) are unaffected. 

In respect of the Generic scorecard, demographics are used to determine the points allocated for the different race and gender groups under certain elements. If an element, for example, states that there are two points available if 60% of Senior Management are black then having one Indian male and one Indian female as the only two Senior Managers would seem to meet that criteria and you would expect to score the two points. This is not the case, however, as these points are awarded according to the demographic representation. So, because Indian people only make up a small percentage of our country’s demographics the business would only be awarded a small percentage of the points.

The demographic targets are however only applicable to the Management and Skills Development Elements and then further only to certain sub-categories within these elements. Where demographics do play a role Economically Active Population (EAP) statistics are used to determine the targets. EAP includes all people between the ages of 15 and 64 who are either employed or seeking employment. The EAP statistics are tracked by Stats SA and published on a quarterly basis.

There was previously some uncertainty regarding the use of national demographics versus regional demographics but this has now been clarified. Where a business has a national footprint, for example it has offices in more than one province, the national demographics will apply but where the business only has one office and does business only in that particular province then the regional demographics will apply.  

It is vital when planning for a BEE verification that the EAP targets are kept in mind as the Skills Development element in particular will be affected by these targets. If the calculation is done manually there are more than 50 individual calculations that may be required in order to determine an accurate score which makes planning for a BEE verification a complex process. It is also important to note that when using the EAP statistics from Stats SA they also need to be adjusted to account for the fact that white people are excluded from the BEE calculation. This adds a further level of complexity to the calculation and it is therefore advisable to seek the assistance of a BEE advisor to help with the calculations and BEE planning needed to account effectively for EAP in your scorecard if you are a generic company.