What is Y.E.S?

Born out of the CEO initiative from 2016, President Cyril Ramaphosa launched the Y.E.S programme last year in partnership with government, business, labour and civil society aimed at providing more than one million young black South Africans (between the ages of 18 and 35) paid work experience over the next three years.

This can occur through corporate work experience, where businesses that participate in the programme create one-year paid positions for the youth or through small business development, where young people are empowered through training and funding to start and grow their own businesses.

YES is applying fresh thinking to create new work opportunities; giving youth a chance to establish a future, becoming self-directed and restoring their dignity.

How does it work?

The Y.E.S Initiative focuses its efforts on the three areas where employment creation efforts are likely to have the greatest benefits and most immediate impacts:

  • The creation of new job opportunities in existing firms intended specifically for the youth.
  • Promoting the capacity of Small, Medium and Micro Enterprises (SMMEs), which are South Africa’s largest employers, with paid-for youth labour.
  • Creating new cohorts of SMMEs, through creative value chain initiatives and knowledge spillover in collaboration with industry champions.

The government have also aligned the Y.E.S initiative with B-BBEE policy, allowing organisations to move up 2 levels on their current B-BBEE scorecard; as follows:

  • 1 level for meeting the Y.E.S target and with permanent employment of at least 2.5%
  • 1 level +3 points for meeting 150% of the Y.E.S target and with permanent employment of at least 5%
  • 2 levels for doubling the Y.E.S target and with permanent employment of at least 5%

In addition to the BEE benefits, and to encourage demand-side job creation, companies employing black youth between 18 and 29 years old will also qualify for the Employment Tax Incentives (ETI).

Eligible participants are Black people (South African Coloured; Indian; African) between the ages of18 and 35.

Qualification criteria for businesses to benefit from Y.E.S:

  • Priority element sub-minimum compliance obligations must be adhered to – this does not apply to small businesses with a turnover below R 10 million;
  • Organisations are required to maintain or improve the B-BBEE status level and performance from the previous year.

Y.E.S Targets:

For Large Entities (over R 50 million annual revenue) the Y.E.S is the higher of:

  1. 1.5% of the Y.E.S Measured Entity’s headcount in the preceding year; OR
  2. 1.5% of the Y.E.S Measured Entity’s average Net Profit After Tax (NPAT) from South African operations in the immediately preceding three years, converted to a headcount number by dividing that NPAT number by R55,000; OR
  3. A target as determined in the table below:
Y.E.S. Targets Table

Practical Example:

Company A has revenue of R275 million, their most recent headcount at 2018 FYE was 160 and their average profits for the preceding 3 years was R25 million.

  1. 1.5% X Headcount(160) = 2.4 people;
  2. (1.5% X Average NPAT{R25 million})/R55 000 = 6.8 people;
  3. R275 million on table = 11 people.

Therefore Company A will have a Y.E.S target of 11people (higher of 1,2 and 3).

Targets for smaller businesses (i.e. turnover under R 50 million) are based on the headcount of the entity and are the table in Annexure B of the document.

Benefits of Y.E.S adoption and compliance:

  • Evens the playing field for small businesses as Level 4 Exempt Micro Enterprises are now able to improve their levels by participating in the programme. E.g.
  • Multiplier scorecard impact as the initiative can be funded out of ESD and/or SED budgets, which develops the resource capacity constraints often experienced by the beneficiary institutions. For example, sponsoring Y.E.S candidates at a qualifying NGO will allow for the payroll cost to be claimed as SED.
  • Opportunity to leverage Govt Incentives     for business growth and sustainability

Other important things to note:

  1. Entities engaging Y.E.S Initiatives have to create new jobs for eligible employees.
  2. minimum of a 12-month fixed-term or temporary employment contract must be entered into with the employee
  3. Y.E.S programmes are not the same as Learnerships, Internships and Apprenticeships and thus the salaries are not claimable for skills development recognition. However, all training and development expenditure qualifies for scorecard points.
  4. Assume application of Y.E.S across all sectors.

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