Absorption falls under the Skills Development Scorecard as indicated in paragraph 2.1.3 under Bonus Points “Number of ‘Black’ People absorbed by the Measured and Industry Entity at the end of the Internship, Learnership and Apprenticeship programme under paragraph 2.1.2.1.

Absorption recognition applies to Black people who, upon completion of a Learnership, Internship or Apprenticeship, secure a permanent contract at the entity or in the same industry.

Through Absorption, companies are able to secure those elusive 5 bonus points in order to get 25/20 points for their Skills Development Expenditure B-BBEE element on their scorecards!

The following boxes therefore need to be ticked for recognition of Absorption:

• A ‘Black’ person as defined; • Who does not have a current long-term contract of employment at the outset
• Is completing a Learnership, Apprenticeship or Internship via the Measured Entity; and
• Upon completion secures a permanent contract with either the Measured Entity or any entity within the industry.
• The absorption target is 5% of Total Employee Headcount. This implies the following:
  • The target for Absorption is confirmed as 5% of total headcount; and
  • The treatment of those employed on a Learnership with permanent employment.

The following examples clarify these concepts:

Example A:

Company X is rated according to the 2013 Amended Codes of Good Practice and has a total headcount of 100 employees (permanent and fixed-term), with 5 Unemployed Learners (included in total headcount). It wishes to obtain full bonus points for Absorption of Learners at the end of the Learnership programme.

In order for the entity to achieve any points for Absorption, the following criteria needs to be met:

1. Company X needed to be the Lead Employer (if hosted Learnership) and therefore employed the Learners and sponsored the Learnership programme;
2. All 5 Learners were absorbed;
3. The absorbed Learners needed to be classified as Black in terms of the definition of the B-BBEE Act and Codes;
4. The absorbed Learners needed to be permanently employed either by Company X or alternatively elsewhere with sufficient supporting documentation i.e. ID, fixed-term contract for period of Learnership programme, Permanent Employment Contract after completion;
5. The % absorbed Learners should be at least 5% of the total headcount as at date of measurement i.e. onsite verification.

Example B:

Where Company X elects to not achieve the full 5-points (such as budgetary constraints or in-line with an overall B-BBEE strategy which does not necessitate the full score) or where it missed the 5% target due to an increased headcount at the date of measurement, the percentage absorbed will qualify for the accompanying score. In this example, the entity’s headcount increased to 200 employees at the date of measurement and it still absorbed all 5 Learners.

In order for the entity to achieve the relevant reduced points for Absorption, the following criteria needs to be met:

1. Same as points 1-4 above;
2. The % Learners absorbed were 2.50% of headcount and Company X will therefore accordingly only qualify for 2.50 points.

Conclusion

Even though Absorption might look like a prickly pear, it certainly creates opportunities to create financial benefits for companies looking to maximise their Skills Development Expenditure. It can also be used to create ways to improve the plight of the unemployed Black youth!

If you are interested in finding out more about how this option could serve your needs, please connect to find out more about Skills College’s secret sauce for Absorption!