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On 28 August 2018, the department of Trade and Industry published the Youth Employment Service (YES) Initiative as Notice 502 under Gazette #41866. The programme was launched by President Cyril Ramaphosa on 27 March 2018, as an addition to the Broad-Based Black Economic Empowerment (B-BBEE) Act.

Download the Youth Employment Service Initiative – a programme designed to address the country’s youth unemployment crisis.

To provide guidance on questions like “What now?”, “How does this affect B-BBEE scoring?” and “What does it mean for business?”, Signa Advisors are presenting a series of workshops on the following dates: 27 September in Johannesburg, 4 October in Cape Town, 11 October in Durban. To join us for any of these workshops, please email info@signa.co.za for further information.

An overview of YES

The statistics are shocking: 52% of youths between the ages of 15 – 24 and 33% of youths between the ages of 25 – 34 are unemployed. The initiative aims to reduce the unemployment rate to secure the country’s economic prosperity.

The YES programme places the needs of young people at the centre of inclusive economic growth by providing specific opportunities to youths. The programme aims to create more than one million paid internships over the next three years, for mainly black South Africans between the ages of 18 and 35.

Other employment opportunities will be created by:

  • Corporate work experience: Companies can create one-year paid positions in addition to the current employment numbers.
  • SMME host placements: Companies that don’t have capacity for additional employers can sponsor the salary for a one-year placement in SMEs.
  • SMME development: Youths are empowered to start and grow their own business, with support from YES in the form of training, seed funding and value-chain integration.

The rationale behind YES is to provide young people with corporate work experience to improve the prospects of finding employment, and to empower them through training and funding to start and grow their own businesses.

Murray Chabant, CEO of Signa Group, says, “Research has shown that one year of work experience, together with a CV and employment letter, will increase threefold the chance of a person being permanently employed. This programme creates a formalised platform for companies to invest in and contribute to solving the country’s unemployment crisis.”

Government is recognising companies’ efforts to comply with the YES programme, by providingadditional incentives. Companies employing black youth between the ages of 18 and 29 will qualify for the Employment Tax Incentive (ETI).

This latest gazette amends B-BBEE legislation to provide for an enhancement of up to 2 Levels for companies that meet or exceed YES targets for youth employment and comply with registration and absorption criteria.

  • Achieve YES target + 2.5% absorption of the youth: 1 Level
  • Achieve 1.5 x YES target + 5% absorption of the youth: 1 Level + 3 bonus points o Achieve 2 x YES target + 5% absorption of the youth: 2 Levels

It should be noted that this gazette does not change Priority Element compliance requirements, whereby missing a 40% sub-minimum requirement results in the loss of a B-BBEE Level. But an entity can now regain that level under the YES initiative and achieve a further level by greater YES performance. Informal Skills Development expenditure for YES employees will be recognised and companies will be able to claim up to 50% of their Skills Development Spend as Informal Training against the Skills Development scorecard.

“It is clear from this initiative that government is actively creating solutions to the country’s unemployment challenge. Programmes such as YES are critical to secure the country’s economic prosperity,” Chabant says.

This new development will create a significant opportunity for B-BBEE consultants to assist their clients maximise the opportunity to improve their B-BBEE Level and to assist them in sponsoring new jobs in external organisations.

Download the Youth Employment Service Initiative for measuring Broad-Based Black Economic Empowerment as gazetted on 28 August 2018.

Want to know more? Join one of our workshops: 27 September in Johannesburg, 4 October in Cape Town, 11 October in Durban. To register, please email info@signa.co.za for further information.