If you fail to plan, you plan to fail

With the 2024 financial year-end now behind us and 2025/26 already well underway, is your business falling back into the skills development complacency trap that costs South African companies millions in lost opportunities every year?

The Hard Truth About Skills Development

Even though skills development is one of the most rewarding elements of the BBBEE scorecard, many businesses approach it with poor planning. The reality is stark:

Failing to plan = planning to fail

If the business does not achieve at least 40% of the targets in the Skills Development area, it loses one B-BBEE level.
WSP/ATR submissions are due by April 30th for companies with R500,000+ payroll or 50+ employees. Think of your WSP-ATR submission as the roadmap for employee skills development and key to unlocking the Skills Development component of the BBBEE Scorecard.
Up to 20 points are at stake on your BBBEE scorecard – equivalent to two full levels

It’s right about this point that many HR executives hit the panic button when they realise their skills development spend and efforts over the last year, as well as their plans for the coming year, fall woefully short of what’s needed to maintain and improve their BBBEE score, as well as their competitiveness in the market.

What is the WSP & ATR?

WSP (Workplace Skills Plan): Identifies the skills your workforce needs and outlines your training strategy for the coming financial year.
ATR (Annual Training Report): A record of all skills development initiatives completed in the current financial year, and which is crucial for claiming BBBEE points. In other words, it measures your training progress against the previous year’s WSP, making it a key indicator of skills development within your company.

The Opportunity Cost is Huge!

Here’s what’s at stake if you fail to plan:

BBBEE Level Downgrade: Your business can earn up to 20 points for the Skills Development element on the B-BBEE scorecard – that’s two levels. The loss of the 20 skills development points by not submitting your WSP-ATR on time will see your BBBEE level drop by two levels – your level 2 gets demoted to level 4 – with serious repercussions for your current and future business opportunities especially in the government, corporate and public sectors.
Lost Grants: You’ll forfeit your mandatory grant which is 20% of your SDL spend to SARS – as well as any discretionary grants. This means losing invaluable opportunities to improve the skills of your own employees and your business competitiveness suffers as a result.

Tender Rejections: Many tenders require a WSP submission as a pre-qualifying criterion. No WSP? No chance of winning tenders.
No Retrospective Claims: Any financial benefits of the training undertaken are permanently lost to you, as you cannot account for them retroactively or recoup any of the levies in the following financial year. The doors are closed in terms of the BBBEE scorecard points you could have claimed.
Salaries of employed learnerships could have counted towards annual skills spend: By embarking on employed learnerships, your business could allocate the salaries of its employees placed on formal learnerships towards its annual skills spend target – for example a monthly salary of R20k would see R240 000 allocated against skills spend for the 12 months. In addition to this, the cost of every learnership – between R80 000 to R120 000 – can be deducted from its taxable income, which is a significant additional tax benefit.

BUT you cannot attempt a quick fix by registering a rushed learnership programme to make up for the lost skills development spend over the past few months. There is no benefit for the current year as the learnerships will not be implemented and completed before the financial year-end – which means none of the spend will fall within the current financial year. See the previous point on no retrospective claims.

This Isn’t a Sprint – It’s a 365-Day Strategy Marathon

The most successful companies understand that strategic skills development requires:

Year-round planning aligned with business objectives
Systematic implementation of both employed and unemployed learnerships and skills programmes
Continuous monitoring and progress tracking
Strategic combination of different development initiatives
Proper documentation and reporting throughout the process with a trusted and accredited training provider

Transform Your Approach Today

Stop viewing skills development as a compliance burden and start leveraging it as a powerful driver of: