Gauteng Business News

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BEE: BEE Remains Vital to Success in Current Business Environment


Recent Gauteng Business News

South African private business owners still regard BEE as vitally important to business success, with 64% believing it is an important factor in winning new business. This figure has remained relatively constant throughout the years, with 61% affirming this fact in 2010 and 63% in 2009.

This is according to global audit, tax and business advisor Grant Thornton’s 2011 International Business Report (IBR) which surveys over 11 000 Privately Held Business (PHB) owners across 39 economies and measures executives’ perceptions on factors that influence profitability and growth.

Tony Balshaw, managing partner at Grant Thornton East London says: “The view that BEE is important to winning new business is held most strongly in Kwa-Zulu Natal (66%), followed by Gauteng (64%), Western Cape (62%) and Eastern Cape (61%).”

Strategic importance of BEE scorecard elements When asked to rate the importance of each element of the B-BBEE scorecard to their business, skills development (55%), employment equity (49%) and management (44%) were ranked the highest.

“Employment equity is increasingly seen as an important element of the B-BBEE scorecard for business, with 49% of business owners singling out this element in the 2011 survey, as opposed to 39% in 2010,” says Balshaw.

The elements of ownership (43%), socio-economic development (38%), followed closely behind, with preferential procurement (38%) and enterprise development (33%) being cited as the least important factor in the B-BBEE scorecard, in terms of private business practice.

In order to achieve corporate BEE targets, South African business owners believe that developing people internally (81%) and fast tracking key employees (58%) are the most beneficial strategies to implement. “With the recent developments in terms of a weakening rand and a potential double dip recession on the way, this strategy is likely to prevail,” says Balshaw.

“Significantly more companies are considering focused recruitment as important to achieving BEE targets – up to 46% in this year’s survey from 36% in 2010,” notes Balshaw.

Developing people internally is a strategy most popular in Gauteng and the Western Cape, with 81% and 84% of business owners in these regions following this strategy respectively.

Only 47% of respondents in the Western Cape believe in fast-tracking key employees as a successful strategy, against 67% in Kwa-Zulu Natal and 59% in Gauteng.

Other strategies business executives turn to in order to improve their BEE scorecard standings include socio-economic development initiatives, with 60% of respondents highlighting this as a strategic initiative, says Balshaw.

“Procurement policies are a powerful tactic too, with 53% of business owners in South Africa agreeing that procurement from suppliers with certified procurement recognition levels plays a vital role in ensuring businesses achieve targets set by the codes,” Balshaw concludes.

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