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Leading the way in BBBEE – Level 3 Announcement

Tsebo Outsourcing Group are proud to announce they are the first large corporate to be rated a level three BBBEE contributor, according to the Department of Trade and Industry’s (dti) new scorecard. One of South Africa’s leading black-owned hospitality services and facilities management company, the Group has long been a leader in transformation by promoting BEE as part of their business strategy, as opposed to a parallel reporting or compliance requirement.

CEO Clive Smith says what the new rating means is Tsebo Outsourcing Group achieved a broad-based BEE procurement recognition level of 110%, enabling customers to claim R1.10 BEE spend for every R1.00 spent with the Group directly or any of its divisions.

“We are one of, if not the only corporate, with more than 30% shareholding held by black women and over 50% black owned corporate company in South Africa, allowing our clients to claim 100% of the points allocated for procurement from black owned and black women owned organisations. This means our clients are able to claim a full five additional points on the scorecard.”

Smith stresses this achievement has not happened over night, but over decades and remains a priority of the leadership team. “Together with buy-in from management, employees, shareholders and suppliers – this attitude has lead to the success of our BEE implementation as a critical strategic imperative.”

The rating agency divulged that they have seen very few companies who have embedded programmes such as Tsebo Outsourcing Group. Recognised by The dti for their commitment and groundbreaking work, Tsebo has been approached to benchmark other companies.

The Group introduced affirmative action in 1981 and by 1996 was being recognised by the Black Management Forum as the most progressive unlisted company in the country. In 2005, it was given an AA Empowerdex rating, one of the first large corporates to attain the double A status.

The Group found the key to ensuring sustainability was to relook at the motivation for addressing BEE. Smith explains: “The BEE model fundamentally addresses how you do business, who you do business with and who benefits from the business that you do. Realistic targets need to be set that are achievable and take cognisance of industry and economic prohibitors.”

“Our affirmative action programme is firmly entrenched, which demonstrates that the success of BEE is not based purely on shareholding but rather on integration within the entire organisation. Tsebo does not believe in empowering an elite few in the boardroom and in pure equity ownership. The Group is committed to uplifting as many people throughout the organisation as possible.”

Of the Group’s nearly 8000 employees, 90% are black and of this, almost 35% are in management positions. The Group places great emphasis on the completion and fulfilment of its Skills Development and Employment Equity plans. They have been successful in the implementation of the National Qualifications Framework, encompassing outcome-based training and facilitation learnerships and competency-based assessments.

Smith says Fedics, their catering division, offers an active training programme in place through the Fedics Institute for Hospitality Studies (IHS). The IHS is accredited by THETA (Tourism and Hospitality Education and Training Authority) and all the training material and programmes are aligned to National Qualifications.

“In addition to the basic skills training, the IHS also offers management training programmes to ensure that skills obtained are maintained and developed in the future. We are a company that prides ourselves on always looking ahead and setting new goals.”

“In addition to the basic skills training, the IHS also offers management training programmes to ensure that skills obtained are maintained and developed in the future. We are a company that prides ourselves on always looking ahead and setting new goals.”

Smith believes there is still an enormous amount of misunderstanding and lack of education surrounding BEE. Whilst The dti codes are finalised, education and understanding still need to remain a top priority.

“In an ‘ideal’ world, a company’s employee profile represents the demographics of the country. As employees are promoted they ultimately address the management requirements and through longevity take up share options or participate at ownership level. This said, for large multi-billion rand organisations, the organic growth route would take an inordinate amount of time so the ‘less risky’ option is to do the traditional deals with seasoned business professionals who have experience and exposure fundamental to business success.”

Tsebo Outsoucing Group have found to increase this pool of partners, companies need to really understand their need for a BEE partner and the motivator for concluding a deal, and then take time to research, debate, engage and commit prior to signing on the dotted line.

Smith says it is crucially important that BEE should not detract from good business and the value-add needs to be determined for the BEE partner to enhance the business. “Once this is identified the partner can be sourced. This would result in a broader search, and a higher commitment to sourcing, developing and partnering with the right BEE partner for sustainable empowerment.”

A further indicator of their commitment to staff and clients, Fedics was the first in the industry to focus on nutritionally enhanced food products in the workplace, to boost immune systems and thereby have a positive impact on general wellness. “We re-engineered all our client recipes and menus to proactively address nutritional intake with particular attention to a balanced diet for improving immune systems, which will benefit all employees and especially those who are HIV-positive.”

Tsebo Outsourcing Group is a company committed to change, and has been both a pioneer and a role model in the industry. Smith concludes by saying he believes the sustainability and future growth of South Africa, together with the future of the industry, are directly linked to black empowerment.

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