Agencies that do not transform themselves quickly and get up-to-speed with the new B-BBEE (Broad Based Black Economic Empowerment) codes will most certainly lose out to agencies that ensure they are compliant by October 2014,’’ says Johanna McDowell, managing director of the Independent Agency Search and Selection Company (IAS).
It’s how you use your score card to get the biggest slice of a growing market cake. “And that’s the route that agencies have to take to stay competitive in business,” explains McDowell.
The biggest problem facing agencies is that the seven pillars have been reduced to five, eliminating choices previously available to them. “Whatever your B-BBEE rating was, it has automatically changed. Agencies have until October 2014 to restructure their scorecards if they want to remain a strong business entity, McDowell says.
“Many agencies have a turnover of less than R50 million and therefore are categorised as ‘Qualifying Small Enterprises’ (QSE’s). They now have to re-think their scorecard and structure because they will not be able to pick and choose which pillars suit them – all QSE’s will be rated on all five pillars,” advises McDowell.
The five pillars are B-BBEE ownership, management control and employment equity (the two have been bundled together), skills development, enterprise and supplier development and socio-economic development.
It is important to be aware that the codes previously included 2 elements: management control and employment equity. Both elements have been consolidated into a single element, but with substantially the same indicators. Previously management control and employment equity were worth 29 points combined. The new combined element is only worth 19 points.
The B-BBEE ownership pillar has not changed with minimum targets remaining the same. But the Advertising Industry along with the Department of Trade and Industry (dti) may reform the targets as part of their own Marketing, Advertising and Communication (MAC) Charter. It is recommended that agencies bear this in mind when they restructure their scorecards.
‘’If you don’t comply, there is no doubt you will lose out on business opportunities. Some agencies have reached Level 1 on the old system, and a few are dragging their feet at Level 5. ‘’If agencies seize the new opportunities afforded by the amended codes, they will be able to become even more competitive in an ever-more crowded market place,’’ she says.
IAS will run a Masterclass regarding the new codes and the advertising industry in early 2014.
IMAGE: Wikimedia Creative Commons
Want to continue this conversation on The Media Online platforms? Comment on Twitter @MediaTMO or on our Facebook page. Send us your suggestions, comments, contributions or tip-offs via e-mail to firstname.lastname@example.org.