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SEIFSA Employment equity

Employment Equity: May the Force Be with you – The Serious Consequences of the Employment Equity Act

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“Don’t put it off”, that’s the warning from SEIFSA to its members and all other companies within the Metals and Engineering Sector.

The Department of Labour has ramped up its enforcement mechanisms in a concerted effort to force compliance with the country’s labour laws. Although busy, with companies fulfilling the last orders for the year or trying to make targets with one last push, the October-December period is also the time to compile and submit Employment Equity Reports online.

The harsh reality is that The Department of Labour’s (DoL’s) deadline looms large on 15 January 2019; with the Metals and Engineering Sector, amongst others, shutting down towards the middle of December until the second week in January, companies cannot afford to be caught short. Human Resource professionals must lead the charge because the Department can impose – and has previously imposed – fines of R1.5 million.

“We are here to help,” says SEIFSA Human Capital and Skills Development Executive Melanie Mullholland. “Our auditing, training and consulting services are personal and can really enable the focus of a company’s reporting capability. We prepare you for exactly what the Department of Labour is looking for”.

SEIFSA’s support speaks directly to our mission: the Federation needs to ensure that its member companies have the tools to transform themselves so that companies can focus on their core business.

Transformation makes business sense,” says Ms Mulholland.

During the launch of the 18th Employment Equity Report, Labour Minister Mildred Oliphant had this to say:

The trouble is that, broadly speaking, we are not making much progress.  There are times when one feels that even the EE Plans are put together grudgingly, with no real will to implement them.  Twenty years since the Employment Equity Act was introduced, there is not much to show for it.The word “grudgingly” and the phrase “no real will” should worry businesses. It speaks to the Government’s perceived attitude of business. It also demonstrates why there is a renewed appetite for ensuring compliance.

EMPLOYMENT EQUITY

“All of us must commit to transformation; we simply must lift our respective games, especially in the Metals and Engineering sector”, says Mullholland.

“We are resolute about scaling up inspection and enforcement and targeting those areas that will give us the bigger impact”, said Minister Oliphant.

In October 2018 the Department of Labour’s Employment Equity Directorate embarked on Employment Equity roadshows in the form of Public Hearings throughout the country. Its focus is on the amendments to Section 53 (the ability to trade with Government) and proposed sectorial targets, contained in the Employment Equity Act Amendment Bill and the Draft Regulations released in September 2018. SEIFSA strongly recommends that Sections 24 Managers, Human Resource (HR) practitioners, especially those in the Metals and Engineering Sector, attend these hearings to ensure that they stay fully informed of the requirements and implications for businesses that do not comply.

In the meantime, let’s begin with what your company needs to start doing immediately.

EMPLOYMENT EQUITY

THE BASICS

  1. Designated employers that employ 50 or more employees or have an annual turnover that exceeds or equals the amounts in schedule 4 of the EEA.
  2. For the Manufacturing Sector, the threshold is R30 million.
  3. Check the process below
  4. Communicate and Consultwith the workforce;
  5. Establish a committee representative of all occupational levels;
  • Conduct an analysis to ensure a Review all Policies and any potential barriers;
  1. Prepare an Employment Equity Plan and Monitor and Evaluate targets against Goals.
  2. Submit the Reportonline on or before 15 January.
  3. It is vitally important to follow the practices set out above as it mitigates risk and gives your company a better chance to be compliant. Non-compliance to this Act attracts fines and penalties.
  4. The Department of Labour’s (DoL’s) online portal for EmploymentEquity submissions is open – CEOs and Section 24 Managers receive an activation code from DoL to access the portal.
EMPLOYMENT EQUITY

SECTION 53: Alert! Your business’s ability to trade with Government is at Risk

The amendments, particularly Section 53, should make the Metals and Engineering Industry stand to attention.

Even though you may have long-standing contracts with Government Departments and related entities, your business will now need a Department of Labour (DoL) certificate to prove compliance with the Employment Equity Act. This could effectively see many in the industry potentially missing out on lucrative infrastructure projects under way or being planned, such as those announced by President Cyril Ramaphosa as part of the stimulus package.

Those who are ready and compliant will have an enormous advantage of other businesses that are lagging behind.

“This is the ‘carrot’ that must incentivize the industry to get its house in order. It certainly adds weight to the phrase that transformation is good for business,” says Ms Mulholland.

SEIFSA plans to play a pivotal role in getting the Metals and Engineering Sector ready for this new reality. Through its relationship with the Department of Labour, its advice, training, consultation and audits will be strategic tools for members of the Federation and the industry in general.

Trying to achieve employment equity and BBBEE targets in the absence of an integrated employment equity and diversity management strategy could be one of the main reasons for the lack of progress in the industry. There is too much at stake, so don’t waste time – and don’t be left behind because transformation makes business sense.

Employment Equity Training
SEIFSA

Artisans of the 21st century

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Artisans of the 21st century

Demand-driven apprenticeships are a win-win in increasing the employment prospects of unemployed young people and closing the ever-increasing skills gap, but companies have to enable this process, writes Melanie Mulholland.

South Africa’s youth unemployment is at its lowest level for five years, but there are still major concerns about the long-term job prospects for the young. According to a new report issued by the International Labour Organisation (ILO), South Africa ranks sixth globally in terms of youth unemployment, with a current rate of 52.5%. Vocational interventions, like apprenticeships, are a much-needed solution for South Africa to prevent long-term negative impact.
Participating in apprenticeships is one of the many ways in which employers can acquire and develop the skills they need, while improving the employability of the younger generation.

Emplaoyers articulate their skills needs and identify skills mismatches in their respective sectors with the end game of job creation. Employers have to be in the driver’s seat throughout the entire process, from consultation through to trade test implementation, in order to create successful 21st-century artisans.
Such holistic engagement by companies would enable and support quality apprenticeship programmes that address pertinent skills gaps which need to be closed. At the same time, it would support a committed and productive workforce that can add value. This would open up a pool of skills and pathways for new talent into companies, occupations and sectors.

Many employers immediately understand the benefits of taking on apprentices and recover the costs of their investment as early as the second year of the duration of apprenticeships.
Apprenticeships focused on the 21st century consist of three components: a theoretical component, a practical (simulated) component and a workplace learning component. This is a dual apprenticeship model. This mode of delivery combines learning in the workplace with learning at a Technical Vocational and Education College (TVET) in an integrated programme. This programme is now being referred to as the Artisan of the 21st Century or A21 apprenticeship.

In order to deliver A21 programmes, the involvement of employers is a fundamental pre-requisite. As part of this training, an apprentice undergoes national trade testing at an accredited trade test centre after completion of required theory, practical and workplace training requirements, further certifying them for their skills.
While on qualification and recognition of learning, we need to be cognizant that South Africa has a history of placing a higher value on the academic pathway from school to university. In recent years, it has become more evident that this pathway does not fit everybody and, now more than ever, it is vital that as a country we develop high-quality vocational pathways that acquire the same respect that other educational choices receive. It is often a fact that qualified apprentices often earn more than their university counterparts.

Quality training is a unanimous trait that many employers from various sectors are demanding, especially in the manufacturing and engineering sectors. Businesses are overwhelmingly positive about 21st century apprenticeships and understand that work-based training can, indeed, boost much-needed skills and productivity – as well as the career prospects of young people. While the government is right to turn the spotlight on apprenticeships, I believe it is wrong to focus on numbers put through rather than the quality of apprenticeships.

South Africa’s target, according to the National Development Plan, is to deliver more than 30 000 additional artisans every year until 2024. This target has plenty of associated risks in undermining the combined efforts that are in place to increase the profile of apprenticeships. The focus on achieving this arbitrary figure would lead to a robotic model, where apprenticeships come out of a production line and yet quality suffers. This, in turn, would end up with apprenticeships continuing to be seen as an inferior alternative to attending universities and institutions of technology.

To add to this, apprenticeships are expensive. The best and perhaps only way to encourage companies to take on apprentices is to increase their quality and relevance to business. If the quality is there, then the demand, from both employers and potential apprentices, will naturally follow.
In order to increase the take-up among businesses, the government has to ensure that, when it comes to apprenticeships, the focus is on quality rather than quantity. Only then can we forge a credible alternative to the academic pathway, which businesses and young people can fully buy into.
In addition, at the moment TVETs and accredited training providers offer a network of support for apprentices. Without the right level of support, we risk seeing more young people dropping out of the system. We need to advocate an “earn-while-you-learn” incentive since skilled workers are increasingly in demand.
As part of meeting quality and completion numbers, the youth should not be disillusioned by the minimum requirements and technical aptitude tests. The system should ensure that the right attitude and skills for learning a trade are determined upfront in the recruitment and selection process and that the employer is assured the right candidate will become a 21st-century artisan.

The question, then, is: why should the youth choose an apprenticeship over an academic university pathway? It is evident, especially in manufacturing, that the economy desperately needs 21st-century artisans ranging from welders, electricians, plumbers, riggers, fitters to boilermakers, among many others.
Corporate South Africa, specifically the manufacturing and engineering sectors, have started addressing some of the real challenges around apprenticeships and artisan development to achieve quality artisans for the 21st century.

Without apprenticeships leading to quality artisans, our prospects for a growing economy and meeting the need to provide jobs for the millions of unemployed young people will remain depressing. Apprenticeships and skills are becoming very attractive because of their demand and the high likelihood of getting a job upon completion.

Melanie Mulholland is the Human Capital and Skills Development Executive at SEIFSA, which owns the SEIFSA Training Centre in Benoni.

SEIFSA

A win-win solution to unemployment

By | HCSD Thought Leadership, Latest News | No Comments

 

By Melanie Mulholland

Demand-driven apprenticeships are a win-win in increasing the employment prospects of unemployed young people and closing the ever-increasing skills gap, but companies have to enable this process.

South Africa’s youth unemployment is at its lowest level for five years, but there are still major concerns about the long-term job prospects for the young.

According to a new report issued by the International Labour Organisation (ILO), South Africa ranks sixth globally in terms of youth unemployment, with a rate of 52.5 percent. Vocational interventions, like apprenticeships, are a much-needed solution for South Africa to prevent a long-term negative impact.

Participating in apprenticeships is one of the many ways in which employers can acquire and develop the skills they need, while improving the employability of the younger generation.

Employers’ end game

Employers articulate their skills needs and identify skills mismatches in their respective sectors with the end game of job creation. Employers have to be in the driver’s seat throughout the entire process, from consultation through to trade test implementation, in order to create successful 21st-century artisans.

Such holistic engagement by companies would enable and support quality apprenticeship programmes that address pertinent skills gaps which need to be closed. At the same time, it would support a committed and productive workforce that can add value. This would open up a pool of skills and pathways for new talent into companies, occupations and sectors.

Many employers immediately understand the benefits of taking on apprentices and recover the costs of their investment as early as the second year of the duration of apprenticeships.

Apprenticeships focused on the 21st century consist of three components: a theoretical component, a practical (simulated) component and a workplace learning component. This is a dual apprenticeship model. This mode of delivery combines learning in the workplace with learning at a Technical Vocational and Education College (TVET) in an integrated programme. This programme is now being referred to as the Artisan of the 21st Century or A21 apprenticeship.

In order to deliver A21 programmes, the involvement of employers is a fundamental pre-requisite. As part of this training, an apprentice undergoes national trade testing at an accredited trade test centre after completion of required theory, practical and workplace training requirements, certifying them for their skills.

While on qualification and recognition of learning, we need to be cognisant that South Africa has a history of placing a higher value on the academic pathway from school to university. In recent years, it has become more evident that this pathway does not fit everybody and, now more than ever, it is vital that as a country we develop high-quality vocational pathways that acquire the same respect that other educational choices. It is often a fact that qualified apprentices often earn more than their university counterparts.

Quality training is a unanimous trait that many employers from various sectors are demanding, especially in the manufacturing and engineering sectors. Businesses are overwhelmingly positive about 21st century apprenticeships and understand that work-based training can, indeed, boost much-needed skills and productivity – as well as the career prospects of young people. While the government is right to turn the spotlight on apprenticeships, I believe it is wrong to focus on numbers put through rather than the quality of apprenticeships.

South Africa’s target, according to the National Development Plan, is to deliver more than 30000 additional artisans every year until 2024. This target has plenty of associated risks in undermining the combined efforts in place to increase the profile of apprenticeships. The focus on achieving this arbitrary figure would lead to a robotic model, where apprenticeships come out of a production line and quality suffers. This, in turn, would end up with apprenticeships continuing to be seen as an inferior alternative to attending universities and institutions of technology.

To add to this, apprenticeships are expensive. The best and perhaps only way to encourage companies to take on apprentices is to increase their quality and relevance to business. If the quality is there then demand, from employers and potential apprentices, will naturally follow.

In order to increase the take-up among businesses, the government has to ensure that, when it comes to apprenticeships, the focus is on quality rather than quantity. Only then can we forge a credible alternative to the academic pathway, which businesses and young people can fully buy into.

Read also: SA’s unemployment figures paint gloomy picture

In addition, at the moment TVETs and accredited training providers offer a network of support for apprentices. Without the right level of support, we risk seeing more young people dropping out of the system. We need to advocate an “earn-while-you-learn” incentive since skilled workers are increasingly in demand.

As part of meeting quality and completion numbers, the youth should not be disillusioned by the minimum requirements and technical aptitude tests.

The system should ensure that the right attitude and skills for learning a trade are determined upfront in the recruitment and selection process and that the employer is assured the right candidate will become a 21st-century artisan.

Need for artisans

The question, then, is: why should the youth choose an apprenticeship over an academic university pathway? It is evident, especially in manufacturing, that the economy desperately needs 21st-century artisans ranging from welders, electricians, plumbers, riggers, fitters to boilermakers, among many others.

Corporate South Africa, specifically the manufacturing and engineering sectors, have started addressing some of the real challenges around apprenticeships and artisan development to achieve quality artisans for the 21st century.

Without apprenticeships leading to quality artisans, our prospects for a growing economy and meeting the need to provide jobs for the millions of unemployed young people will remain depressing.

Apprenticeships and skills are becoming very attractive because of their demand and the high likelihood of getting a job upon completion.

Melanie Mulholland is the Human Capital and Skills Development Executive at Seifsa, which owns the Seifsa Training Centre in Benoni.

SEIFSA

Gender Transformation Improves Bottom Line

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Gender Transformation Improves Bottom Line

By Melanie Mulholland, Human Capital and Skills Development Executive at SEIFSA.

 

Gender transformation, particularly in the metals and engineering sector is very slow. According to research findings issued by the Department of Labour through the 2016 Commission for Employment Equity Report, white males continue to dominate top and senior management levels in the metals and engineering sector.

In the 16th annual report, the analysis of the “Workforce profile for Manufacturing by race and gender” compared 2014 and 2015 statistics. It found that there was a slight increase in the representation of women of all races at the top management level. At the same time, African and Indian men managed to have a slight increase in their representation at this level, while there was a decrease of white men. The number of coloured men remained constant. The professionally qualified level indicated that the representation of whites in the manufacturing sector has decreased by 2.3%. There was a continued reduction of whites and Indian males at the skilled technical level in the manufacturing sector and a 0.2% decrease of African women, while their African men increased by 1% during the same period.

Formidable gender gap

Talent is critical to staying competitive, but despite the growing number of qualified women in the workforce in all areas, the female talent pool continues to remain underutilised. This is a worldwide phenomenon in which women in business continue to face a formidable gender gap in senior, leadership positions. The barriers too are well known: a mix of cultural factors, ingrained mindsets and stubborn forms of behavior, including a tendency to tap a much narrower band of women leaders than is possible given the available talent pool. However, data also showed that including at least three women on company Boards improves the tone and responsibility of Boards.

A 2015 report by the African Development Bank on “Women Board Directors of Africa’s Top Listed Companies” found that women hold 12.7% of Board Directorships (364 out of 2,865) in 307 listed companies based in 12 African countries. This is 4.6% lower than the 17.3% women representation on the Boards of the 200 largest companies globally. Kenya (19,8%) has the highest percentage of women Board Directors, followed by South Africa (17,4%), Botswana (16,9%) and Zambia (15,7%).

The paucity of women directors is due, to some extent, to companies’ lack of understanding of the necessity for and benefits of diverse Boards.

In South Africa, women currently hold less than four percent of CEO positions in JSE-listed companies. According to Carmen Le Grange, PwC Partner in Advisory Services: “Companies that are actively promoting and advancing women to the highest levels of management and leadership tend to have more engaged Boards, with a greater diversity of talent and wealth”.

Impacting bottom line

Recent research found that companies with the highest percentage of women on Boards also tend to outperform those with lower percentages of women on Boards. This includes higher returns on sale, a greater return on invested capital and a higher return on equity.
There is now a plethora of over 30 studies undertaken by academics, women’s groups, management consulting firms and accounting and investment firms from different countries showing a correlation between more women in senior corporate leadership roles and a company’s better financial performance. Ample research has shown that the impact of women on Boards takes effect when women are no longer solitary figures on otherwise all-male Boards. When three or more women directors serve on the same Board, women’s voices are more likely heard and boardroom dynamics change substantially.

The three South African companies with a quarter of their Boards comprised of women include Barclays Africa Group (which is chaired by a woman, Wendy Lucas-Bull, and who’s CEO is also a woman, Maria Ramos), consumer goods company Tiger Brands and telecommunications company Vodacom.

Need for legislation

The 2015 report by Women Board Directors of Africa’s Top Listed Companies further highlights that South Africa has succeeded, since 2005, in ensuring that at least 30% women Directors serve on the Boards of its State-Owned Enterprises (SOEs). The 2012 Business Women’s Association (BWA) Census actually recorded 33% women’s representation on SOE Boards, proving that this government mandate has been effective.

The law, however, does not cover listed companies. As a result, without a similar framework, the percentage of women Directors on the country’s blue chip index, the JSE40, has stalled at 17.4%.

To address this issue and other areas of gender equity, there is now proposed legislation introduced by the Ministry of Women, Children, and People with Disabilities to “establish a legislative framework for the empowerment of women; to align all aspects of laws and implementation of laws relating to women empowerment, and the appointment and representation of women in decision making positions and structures.” The Women Empowerment and Gender Equality Bill calls for equal representation (50%) on boards of all public and private corporations. If passed as currently written, all companies – listed, private, and state-owned – would have to provide a plan for increasing the percentage of women Board Directors towards 50%.

Beyond gender equity laws, there is actually an existing South African legislative initiative which provides a door to the inclusion of women in corporate leadership. The Broad-Based Black Economic Empowerment (“B-BBEE”) Act, passed in 2003 and revised in 2013, gives points to companies with black Directors and extra points for black female Directors. At the senior management level, the revised Act sets a compliance target for senior management at 60% black and 30% black female. Any company seeking government contracts, whether at a provincial or national level, is evaluated on the basis of its score on Black Empowerment Code measures. Consequently, the B-BBEE provides a financial incentive for companies to advance black females onto Boards and senior leadership and could serve as a model for legislation in other countries to accelerate gender diversity on Boards for all women.

Pay gap

PwC’s 2014 “Executive Directors’ Remuneration” report showed that at Board, level the gap between male and female Executive Directors widens according to industry type. The report also indicated that more effective work needs to be done to achieve better representation of women on Boards. Gender equality at management level has tended to remain flat at about 24% since 2009. According to the report, without proactive support at Board level, in another five years organisations that do not mainstream women may find that there are even fewer female leaders in decision-making positions.

It is also interesting to note that 23% of male senior executives and senior managers were paid in the upper quartile of the market, while only 2.3% of females were paid at the same level, according to research carried out by PwC’s REMchannel® on-line survey.

2013 Tax Statistics issued by the National Treasury and the South African Revenue Service (SARS) show that women accounted for 43.6% of the assessed individual taxpayers, had an average taxable income of R167 489 and were liable for tax of R27 980 at an effective rate of 16.7%. On the other hand, men had an average taxable income of R225 919 and were liable for tax of R50 100 at an effective rate of 22.2%.

Boardroom diversity

The matter of Boardroom diversity in the context of increasing the number of women sitting on Boards is a global phenomenon and not unique to South Africa. In the US women hold only 11% of Board seats at the world’s largest and most well-known companies, with little progress being made on gender diversity for more than a decade.

Diversity and inclusion must become a Boardroom imperative and norm. Under-representation of women is not new – it is a matter which gets ignored in the business world. There are those who say that women “unintentionally hold themselves back” in their careers, meaning that they don’t allow their voices to be heard in the business world. Others contend that women’s lifestyles change the outcome of their professional careers. PwC’s “Women in Work” index shows that in countries where there is a more equal proportion of women to men in executive positions, both mothers and fathers share the workload of raising a family and promote a healthier work/life balance for both genders.

King Code of Governance

“The King Code of Governance Principles” and the “King Report on Governance for South Africa” (known as King III) published in 2009 also mentions gender as a factor to be considered in appointing Directors. The Code recommends that a Board consider “whether its size, diversity and demographics make it effective” and lists gender as one of the factors of diversity (Section 71). As a whole, the King Code has strong guidelines regarding nominations and corporate governance principles, but the language regarding gender diversity lacks force and has not been as effective in increasing the number of women Board Directors.

Empower more women

There is no quick fix: the pace of transformation has been slow and more needs to be done by the business world to address transformation to change the culture of building a diverse workforce. Businesses and policymakers have a vital role to play in addressing the needs of female employees in a variety of areas and diversity goals. Businesses need to empower more women to step up and be counted and included for their knowledge, talent and skills and what they can bring to the business when they are placed in high-level positions.

Let’s provide opportunities to ensure women get the experience they require to be appointed to senior positions on Boards. These could include work-integrated learning training, executive coaching, mentoring and sponsorship programmes, to name a few.

At this rate, it will take many years for equitable representation in the labour