Not all B-BBEE is bad: It can be a competitive advantage for businesses and lifeline for young unemployed – Gary Bannatyne (Shaper)

With the Ramaphosa government digging in its heels over black empowerment rules amid increasing pressure to abolish regulations that have advantaged a small percentage of black business leaders in South Africa, Gary Bannatyne, Managing Director of Shaper, has challenged some of the negative perceptions surrounding Broad-Based Black Economic Empowerment (B-BBEE). Bannatyne highlights the transformative potential of B-BBEE if it is not merely a box-ticking exercise in uplifting unemployed youth, boldly stating, "Not all BEE is bad." He describes Shaper’s fit for the workplace programme as a process where they “panel beat” young individuals to make them work-ready. He notes the overwhelming talent entering the market from universities, with sometimes 3,000 applicants for just 10 positions, many of whom have heartbreaking stories. To upskill these young graduates and matriculants, B-BBEE can serve as a "cheat code"—if executed correctly, he says, "it is almost like gaming the system."

Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.

Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.

If you prefer WhatsApp for updates, sign up to the BizNews channel here.

The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here.

Watch here

Listen here

Edited transcript of the interview

Linda van Tilburg (00:01)

Joining us in the BizNews studio today is Gary Bannatyne, Managing Director of Shaper, a company that helps South African businesses meet their black empowerment targets and supports unemployed youth to become future-fit for the workplace. Well, Gary, welcome to BizNews.

Linda van Tilburg (00:44)

Your team sent a pack to bring us up to speed on what’s happening in your business, and there was a line I couldn’t ignore. You said, “Not all BEE is bad.” That’s a bold statement, especially with growing pressure on the Ramaphosa government to soften empowerment rules. So, what exactly did you mean by that?

Gary Bannatyne (02:13)

Well, Linda, obviously we’re very opinionated about some BEE legislation, but in the skills development space, where we’ve been working for a very long time, we believe that if done correctly, it’s really impactful. With all that’s going on in the media around BEE—corruption and benefiting a few at the expense of many—we’re proud to have been working in the skills development space for over a decade, delivering so much value. I think it’s important for big corporates and companies turning over more than R50 million to know that BEE offers an opportunity, not just a burden, as many see it.

Linda van Tilburg (01:36)

So, the distinction should probably be made between benefiting a few and benefiting many, which you say you do.

Gary Bannatyne (01:45)

Yeah, absolutely. Skills development, according to the codes—and I’m not a specialist, but we’ve been playing in this space for a long time—is about how we upskill people who are bottlenecked, who haven’t been given opportunities. Shaper, as a business, has never discriminated against young white South Africans, but our primary focus is developing young black men, women, and previously disadvantaged individuals, giving them skills to fast-track them into jobs. We’ll keep echoing this in our discussion: development and compliance with BEE regulations isn’t just about spending money to train people.

It’s about how we upskill individuals to assist in your workforce. How do we help young people gain skills to be work-ready for your workforce? And if not your workforce, how do we use those compliance requirements to increase the value of your industry, whether it’s finance, industrial, or whatever? It’s critical that we don’t see it as a burden. There’s a disconnect. In many of our top 100 companies in this country, you’ve got the HR strategy for resourcing the business, and then you’ve got the BEE requirement. You wouldn’t believe it, but in many cases, they don’t talk to each other. So, it’s critical for me to underscore that not all BEE is bad. If you connect your HR and human resource requirements to your skills development compliance, it’s an absolute game-changer. We’ve seen it with many of our clients historically.

Linda van Tilburg (04:04)

Can we look at the legal mandate in South Africa for companies to spend on skills development? Could you go over that for people who might not know?

Gary Bannatyne (04:13)

Yeah, typically, anyone listening who’s turning over more than R50 million a year has a mandatory requirement to spend between three and six percent of their payroll on skills development. This means, to participate, maintain a scorecard, and benefit your business from a scorecard perspective, you need to invest in this. The word “invest” isn’t often thrown around in the BEE landscape, but it’s a mandatory requirement. For us, it’s such a grudge purchase. We’re overwhelmed with clients looking to tick a box.

People are afraid to breach the R50 million mark because they know they’re moving into territory where—and rightfully so—as a business person, you’re focused on just doing business, and now you’ve got all these extra bells and whistles you don’t care much about until you start thinking about how to marry that with your skills pipeline and talent strategy.

We’ll touch on it, Linda, but when people talk about the skills development basket, it’s internships, learnerships, and the Youth Employment Service (YES0 programme. There’s a lot of bad taste because, in many cases, this hasn’t been done well. If you put a camera in front of someone and ask, “How’s your skills development programme going?” they’ll say, “It’s so impactful, so great.” Take the camera away, and they’re like, “It’s such a burden, a box-ticking exercise.” There’s a lot of bad sentiment around it. Some aren’t doing it well, though a few are, and I believe we are. It should be seen as a competitive advantage for a business that has breached the compliance requirement.

Linda van Tilburg (06:46)

Yeah, the term “competitive advantage” and BEE seem like a burden for companies. Take us through the steps. What would you do if someone comes to you and says, “Oops, I’ve just reached that R50 million mark. What now?”

Gary Bannatyne (07:10)

If you breach the R50 million mark, it’s not like you have a huge requirement anyway. We do a calculation with our prospective clients, as most good players in this space would, saying, “This is what you’re required to spend.” With tax rebates and so on, the net effect is quite minimal. Once clients see it’s not as significant as they imagined, it starts the ball rolling around, “OK, how do we do this well, not just tick a box?” We manage our clients that way, trying to understand where they want to spend their money because skills development is a big basket.

Our flagship products, which get maximum recognition for points in the ecosystem, are learnerships. Learnerships are big endeavours. They’re not just, “Hey, let’s invite some young kids for the weekend, tell them about AI, tick a box, and move on.” A learnership is a commitment—a 12-month stipend, looking after a human for 12 months with the intent to get them out the door in incredible condition. When I say incredible condition, I’m not talking about people replacing you, Linda, or taking over middle management or becoming senior executives. I’m talking about something simple: how do you get into an office, into a job, and just add value? That’s all you can expect—adding value.

We walk through this process with our clients. One of our biggest advantages—and I’m careful not to just push our agenda here, because it needs to be an industry concept, which it isn’t, and I’m kind of grumpy about that—is that when you invest in skills, just saying, “Gary, here’s R2 million, my BEE consultant says we need to spend it on this for maximum recognition on your learnerships,” and I say, “Great, we’ll take your money,” doesn’t really help. It does help because we’re deploying that money into individuals, creating opportunities and jobs. But for the sponsoring company, it’s critical to understand their human resource and capital requirements. If they’re a tech company or a small business trying to bring in junior talent working in a specific tech stack, we focus on scarce and critical skills.

Our bread and butter as a for-profit business is going after high-demand, in-demand skills. When we engage with a client, they might say, “We have a demand for full-stack developers.” We work closely with them to develop full-stack developers, so there’s no disconnect where, after a 12-month learnership, you’ve got a product that’s been hard to achieve from a sponsorship and implementation perspective, and the individuals are misaligned with what the industry wants or where job vacancies are. I’m sure you at BizNews have discussed in-demand skills. I don’t like talking about the Fourth Industrial Revolution—we don’t care too much about that because whatever we’re in now is an absolute scramble for talent.

When we started over a decade ago, take the banking or financial sector as an example. There’s been a huge transition from being a banker or insurer to a tech company. That’s how they define themselves, from the cheap seats where I’m at. The future of the industry is becoming a tech company, which pretty much every business has been doing for the past decade. What was happening is the blue bank would employ someone from the green bank, the green bank from the red bank, and there was this circulation of talent. To secure that job, they’d pay a premium to poach someone. Because everyone kept paying a premium, the market price of individuals went up, and the expertise and experience layer plateaued.

You weren’t getting people in the industry really cutting their teeth and mastering their trade—I say that loosely; people might have a go at me for that. At a junior level, there was this circulation of talent, creating an inflated market price on value. I tie it back to the pipeline of talent. Some of our banking partners have been brilliant at this, identifying that they’re not just here for tomorrow but for the next five or ten years. How do we invest in the future? The future in ten years’ time is the junior of today. That’s where we spend time understanding our partners’ demands so we can panel-beat young individuals and get them work-ready in a skill where they can get a job and run the full distance, starting their chapter of working in South Africa.

Linda van Tilburg (13:57)

So, where do you find these young people? South Africa has a massive unemployment rate—arguments vary, but the figure bandied about is around 40%. You talked about quite sophisticated jobs just now to get them ready. Where do you find them?

Gary Bannatyne (15:47)

Ja, sophisticated in our world is that everyone needs junior talent. You can’t build a tech business or any business just with seniors and experts. You need individuals who can enter the workforce doing menial tasks and start getting a command of a specific skill. I’m not talking about cyber programs or data science programs—though we do those—but about young individuals who can start adding value. By adding value, I don’t mean landing on the floor in a superficial programme, circulating around a business for 18 months before realising they need to work. No, when that person lands, they need to start adding value to your business.

To answer your question about where we find this talent, Linda, there’s so much talent. I don’t know when you went to university—Tukkies—but I did too, and I don’t ever remember someone talking to me at university, not just at the University of Pretoria or top universities. I’m not knocking them, but it was always about getting your degree, not getting a job. So many institutions in this country have that mindset: get the qualification, and we won’t talk about the job part. Go to a small private institution, get an NQF or entry-level accreditation—which is great—and you’ll be fine. No one talks about the job, and it’s such a big part. The accreditation is a ticket to a job, not your final destination.

So, back to your question, with so much talent and an overflow coming into the market from second-tier universities, let’s say one of our banking or financial services partners wants to run a data science programme. If we put out a post for a group of 10 individuals—we can only take 10—we’ll get about 3,000 applications.

Linda van Tilburg (16:46)

So, they’re there, they definitely are there.

Gary Bannatyne (15:56)

The hardest part of our work is finding the right fit for our partner. By fit, I mean, do they have the aptitude and attitude to succeed in a banking, data, or logistics environment? If they do, we’ve got to go through this haystack to find the needle. Do they have the qualifications that meet our partners’ criteria? Some partners want a young black South African with a matric, or specifically female if that’s their strategic agenda. Then we have the exciting challenge of ensuring they’re culturally relevant for that business. Every business has its own cultural values, and we source and screen this talent to place them there.

We have an incredible team at our HQ in Joburg, working through that process. Sadly, there’s a lot of disappointment. If you’re getting 3,000 applications and can only take 10, what does that say about our ecosystem? It means a lot of people are being let down, but there’s a lot of opportunity in the space. We just want to win and do well where we can. That’s the last mile—someone with a diploma in IT or a comm sci degree from a top-tier university looking for a job in a good business. Shaper is that last mile where they come in, we panel-beat the hell out of them. It has to be work-simulated. We can’t just train someone and hand them over, saying, “Here’s this person, enjoy.” We panel-beat them to be work-ready. That’s our little role in the market, if you know what I mean.

Linda van Tilburg (18:56)

Can you share a success story where this really worked well, and all the principles you’ve talked about just clicked together?

Gary Bannatyne (19:12)

In every situation, we’re seeing incredible success stories. We can’t claim to be perfect as an organisation, but we damn well try. You’re finding individuals, in most cases, who are the have-nots—those who haven’t had access to the economy or financial systems. That very basic element of the codes is giving someone access to the economy. A basic success is finding top candidates for very good partners, giving them their first job, specifically in unemployed learnership programmes. That’s a success story in itself.

Scattered amongst that, success isn’t always a violin story. I guarantee 80% to 90% of candidates will tell you a story about their journey to get a qualification and a job through a business like Shaper, and it’ll be tough not to cry—it’s tough as hell out there. That’s 80% to 90% of candidates. We live and breathe in that environment, and then you’ve got these scattered pearls of wisdom where businesses pull together their human resource requirements, their skills development requirements, their BEE spend, and sprinkle in kiff values and strong cultural ethics, saying, “Let’s not just do this, let’s do it very well.” Those are the success stories that pop out, especially with our financial services partners, because they have a considerable spend in the tech space.

Linda van Tilburg (21:29)

So, Gary, what is one of your biggest challenges?

Gary Bannatyne (21:32)

The landscape is tough generally because a lot of people are taking the piss, trying to create these learning interventions and last-mile interventions for individuals in an unethical way—just get in, charge little, get out. Someone who was sitting on their hands before the skills intervention finishes with a piece of paper and is sitting on their hands again. That’s one of our biggest challenges: navigating what we offer versus what others are offering.

Some of our competitors are doing a relatively good job—obviously, we’re quite confident in our own. The second thing is the changeover from SETAs to a central QCTO, which has been really tough on businesses and our competitors. It’s been a painful change because everything’s had to move to the QCTO, and there’s been a delayed process with some core accreditation principles.

I need to add that how we’ve survived this as Shaper is we don’t just offer a QCTO or SETA-accredited course to our learners and candidates. They walk away with an accreditation, but the real-world, in-demand skills make up about 70% of the time we spend with them. The accreditation is a small but important part, a ticket to recognition. Where the rubber hits the road is developing individuals based on demand for our clients. This QCTO-SETA shift has been disruptive because many have been working on archaic systems. We offer a data science learnership, and then the QCTO says, “Well, you can’t do that in a specific way,” and a lot of people have fallen by the wayside.

Maybe a third little curveball challenge is educating corporates that there’s a better way to achieve and take advantage of their BEE spend. It’s how it should be looked at. My last thought is that it’s almost like a cheat code. The codes mandate you to spend, but if you spend it well and align it with your strategy around human pipeline talent development, you’re almost gaming the system. It’s an incredible advantage if you get it right.