Following the recent release of the 2014/15 Commission for Employment Equity’s (CEE) 2014 report, much has been published about the lack of true transformation at top and senior management levels in the private sector. In particular, the point is made that whites still hold 70% of top management positions in the country, despite accounting for only 10.3% of the population. Notably, there has been a decrease of 3% in white representation at the Senior Management level, but even more notably, an increase in female representation at senior management from 19% in 2010 to 32.1% in 2014.
Interestingly, the CEE report indicates that 55.3% of professionally qualified individuals are black, despite a clear lack of investment from companies in this area. In particular, it notes that 53.4% of whites were beneficiaries of skills development, compared with only 8.4% for Africans. It should, however, be noted that great strides are being taken by women again in this area, with 42.9% of qualified professionals being women.
The same trend in these numbers continues throughout the report, leaving little room for any interpretation other than that the Private Sector is not meeting its obligations to transformation in the workplace.
Contrary to the picture painted here, the Business Day featured an insightful article by the Free Market Foundation that cites some interesting statistics regarding a marked improvement in the progress made in “true transformation” terms in South Africa. Notably, the emergence of numerous black entrepreneurs and a vast improvement in the annual earning of black people.
In addition to these positive trends, supported by initiatives like the black industrialists project, government is also taking steps to fast-track transformation through the review and amendment of the Employment Equity and Black Economic Empowerment Acts, as well as the preferential procurement policy framework.
With specific reference to the Employment Equity amendments, the Department of Labour has improved their capacity to enforce these new regulations, but more importantly has taken a pro-active position regarding this enforcement. Thobile Lamati, Director-General of the Department of Labour has stated that “enforcement remains a last resort. There are three things we do: we educate employers; we go to employers and analyse their plans, and establish whether companies comply; and we enforce”. “The first two pillars are the most important because we believe that if companies say to us ‘we know we’ve transgressed the law, we are prepared to comply’, then we can give them enough time to do so,” said Lamati.
This has certainly been our experience in dealing with the Department of Labour during client site inspections or DG Review processes. Additional support is also offered through the recent roadshows conducted by the Department of Labour throughout the country.
Despite this, the Department of Labour recently released a statement citing that legal action is to be taken against 1400 companies who have been found to be non-compliant with the provisions of the Employment Equity Act. They are requesting that fines be imposed on those companies that have been found to deliberately shirking their responsibility to comply with this legislation. If the Department of Labour is to succeed herein, this will mark the first time the department is implementing fines to improve transformation in the workplace.
Bottom line is, if it is accepted that transformation is at the centre of a fair, equitable and just society, it cannot be left to government and the historic private sector alone. Opportunities afforded by empowerment legislation should be seen as an enabler to total participation in the South African economy. Moreover, if we are to realise the ambitious targets set by government in respect of our growth prospects, South Africa desperately needs an innovative, assertive and fiercely competitive black entrepreneurial class. Material support for individuals who are prepared to work hard, create value and contribute to the economic development of the country by addressing inequality, job creation and poverty reduction should be the order of the day.
Because it makes business sense.
For further information on the CEE report and other compliance matters, please visit our website on www.globalbusinesss.co.za