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Siemens earns Level 2 B-BBEE status

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Siemens is now one of just two companies in its peer group to achieve Level 2 BBBEE. It has the highest rating for a German company operating in South Africa.
The Level 2 ranking was calculated by Empowerdex in accordance with the Department of Trade and Industry’s 2007 B-BBEE Codes of Good Practice.

Siemens has steadily increased its B-BBEE points from 51 points in 2006, and the new ranking followed a 7,6 point (9%) increase from the 2014 score of 78.31, to nearly 86 points in 2015.

“Contributing to South Africa’s sustainable economic and social development is a key part of Siemens’ business strategy,” said Siemens executive director Clifford Klaas, who joined the company in 1986 as its first black business administration trainee.

“We are extremely proud of our Level 2 B-BBEE achievement, which is reward for Siemens’ commitment to South Africa’s development goals. We saw a particularly large improvement in skills development and employment equity, which are two of the most challenging categories in a B-BBEE rating.”

“Transformation and skills development are good for business,” Klaas says. “Doing the right thing for South Africa has made us more competitive.”

B-BBEE scores are calculated on seven elements – ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development.

In its 2015 score Siemens increased its ranking for black ownership, employment equity and skills development. Skills development and employment equity increased by 84%.

The ownership score rose by 6% from 20.82 to 22 points against a target of 20 points, following an increase in the net value of black ownership of the company, and was boosted by the Employee Share Ownership Scheme launched in 2012. The scheme makes 15% of the Siemens shareholding available to previously disadvantaged staff. Additional units were allocated to women’s empowerment, with black women now owning 15.59% of Siemens in South Africa.

Siemens now has a total 30% black ownership in South Africa, substantially more than the B-BBEE target of 26%. Historically disadvantaged people make up 56% of the company, which employs 1,460 people in South Africa. More than 80% of trainees are black.

Siemens is indirectly the creator of 11,700 jobs in South Africa. Its total procurement spend is R2,7bn a year, 30% of which is with Qualifying Small Enterprises (0-5m) and Exempted Micro-Enterprises (5-35m).

The achievement in skills development follows Siemens’ focus on developing scarce and critical engineering and technical skills, developing its managers and leaders, and organizational transformation. The company invested R40m in 2014 on developing staff skills, with a total of 3,900 training days.

Siemens achieved the highest possible score for preferential procurement, enterprise development and socio-economic development.
During the past five years Siemens has spent R20m through its partnership with the SAJ Competency Training Institute.

In 2014 the company spent more than R15m on the Mandela School of Science & Technology, part of a R100m-investment in former president Nelson Mandela’s home village of Mvezo in the Eastern Cape.

“The new B-BBEE ranking has made us a better company. We have better trained staff, we are more diverse and attracting better talent, we are getting positive feedback from customers and the whole Siemens team is motivated by the B-BBEE achievement,” Klaas said. “For Siemens, a focus on doing B-BBEE properly has been a winning strategy.”

Some companies in Siemens’ sector seek empowerment and a B-BBEE ranking in structures which are created for particular projects. “Siemens wanted to have the whole company empowered, and we have now achieved a rating for the whole of Siemens in SA,” Klaas said.

Siemens’ 2015 B-BBEE achievement is partly the result of better measurement of its B-BBEE performance, and the employment of a dedicated diversity-affairs manager to keep track of the company’s contribution to SA.

“We knew we were doing the right thing, but we didn’t always document it for our B-BBEE score,” Klaas said. “But once we looked hard at our impact we realised just how much we were doing, how many people we were training, that we were spending more on skills and development than the scorecard required and that we were in a position to achieve the top ranking.”