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Companies are realising ever more that in order to be successful they should not only focus on profits and financial figures, but also on nurturing their human capital and motivating their employees to reach their goals. It is no surprise then that clients, suppliers, investors and job seekers are increasingly favouring companies that take responsibility for the welfare of their workers, demonstrate commitment to their workforces and cultivate long-term and fruitful relationships with them. Ultimately, these companies are the ones that offer the most sustainable results and that seem more resilient in troubled times.
Companies based in South Africa are no strangers to this trend. On the contrary, many of them are starting to ponder the importance of engaging, retaining and motivating their employees in an effort to achieve their operational and business objectives. This trend is reflected in the emergence of such organisations such as the CRF Institute and JobCrystal. The CRF Institute’s BEST Employer initiative measures companies’ performances in terms of human resources management, while JobCrystal determines, through survey data, which companies have the happiest employees and are the best employers from employees’ perspectives. The use of the services offered by such organisations now allows prospective employees the opportunity to choose employers that will look after and nurture them, placing pressure on companies to adopt a human capital-centred approach to achieving their operational goals.
The trend is not unique to South Africa. However, South Africa’s status as Africa’s largest economy(2) as well as the skills shortage and high unemployment rate the country currently faces, warrant a closer look at how the nation’s companies are performing in terms of the management of their most valuable assets – their human capital. This CAI paper discusses the crucial role that human resources management plays in the growth and development of companies in the context of an ever-changing global marketplace. Particular attention is paid to the challenges facing employers in attracting, retaining and nurturing quality employees in South Africa and what ‘the best’ South African employers are doing right in the ‘War for Talent’.
Which are South Arica’s BEST Employers?
Hopes for a global economic recovery have given way to fresh concerns of widespread economic recessions in 2012. In light of these concerns, a number of business leaders are seeking new sources of growth and are tailoring their approaches to human resources management to address differing regional and demographic needs to support business operations and talent strategies.(3)
The CRF Institute of South Africa has developed the BEST Employers methodology to identify the country’s top performers in the area of human resources (HR).(4) In short, the BEST Employers certification is granted to employers that meet strict criteria related to excellence in six categories, namely: primary benefits, secondary benefits and working conditions, diversity, company culture, training and development, and career opportunities. The BEST Employers methodology, applied to the assessment of employers in HR not only in South Africa but also around the world, was awarded with full marks on credibility by the Dutch Ministry of Economic Affairs and its local results have been independently audited by Grant Thornton South Africa.(5) The BEST Employers certification differentiates the companies that consider their human resource their most valuable asset from the ones that still concentrate solely on profit figures and that do not pay much attention to the happiness and advancement of their employees. Additional facets of the BEST Employers accreditation recognise companies that follow current corporate social responsibility trends and the ‘triple bottom line’ approach which combines the traditional bottom line element of profit with those of ‘people’ and the ‘planet’.
The 2011 ranking of BEST Employers in South Africa indicated that the top ten companies with regards to human resources policies and employee practices were: Microsoft SA (Pty), Accenture SA (Pty), SAP South Africa, Unilever SA, Ernst & Young, Vodacom Group Limited, Netcare Limited, Peninsula Beverage Company, Edward Nathan Sonnenbergs Inc., and Procter & Gamble SA (Pty) Ltd.(6) In addition, close to 70 organisations have received the Best Employers recognition by the CRF Institute in the 2011-2012 period.(7) These companies have been recognised for seriously engaging their employees and for making them a vital part of their business strategies. They have placed their respective work forces at the centre of their businesses, understanding that their satisfaction and accomplishments will result in improved services and products, and therefore, in successful operations.
The BEST Employer website also allows prospective employees to identify which companies excel in the fields that are most important to them through a tool which assists in the identification of the companies that perform the best in any two given human resource criteria.(8) For example, if one wishes to know which are the top performing companies when it comes to primary benefits (first criterion) and secondary benefits and working conditions (second criterion), one discovers that British American Tobacco, SAP, Liberty, Microsoft, Unilever and Accenture are doing the best job. When combing the criteria of company culture and diversity, the aforementioned tool shows that companies such as Netcare, Absa, Exxaro, Accenture and Vodacom, among others, are excelling. In the meantime, Peninsula Beverage, Netcare, Coca-Cola, Accenture, Unilever are at the top of the list when it comes to training and development (first criterion) and career development (second criterion).
This Best Employers’ tool is of great utility to those doing research, looking for a job or searching for an interesting or sustainable corporate investment, as they can clearly identify the companies that are excelling or the organisations that are lagging in certain areas related to human resources practices and long term management of employees. This, in turn, allows them to make informed and sound decisions on future employers or investment opportunities.
The propagation and credibility of the Best Employers’ ranking and criteria-based assessment tool may thus also add to the competitiveness, transparency and professionalism of South Africa-based companies. South African companies may feel a growing pressure to adhere to internationally accepted human resources standards, to make efforts to improve in weak areas, and to demonstrate that they have better employee satisfaction, motivation and retention results.
The pursuit of happiness
Today, career development and management follow a fluid path. Employees have increased choice in terms of career development, but also increased risk.(9) Employees are taking responsibility for their own career movement and professional development. Prospective employees now identify their own needs and how an organisation might fulfil these needs, and steer the course of their own careers.(10)
In another initiative to assess the quality and the impact of human resources practices in South Africa-based companies, JobCrystal, a local recruitment specialist, created the JobCrystal Happiness Indicator, a measure of the happiest employees in the country and the best places to work.(11) Although the JobCrystal Happiness Indicator for 2010 is based on data collected and compiled a couple of years ago from a sample that was not necessarily representative (100,000 individuals/job seekers that responded to a survey on the JobCrystal website), its results cannot be completely dismissed. They, for example, showed that the happiest employees were working for the Auditor General, Shell Oil, CSIR, Softline Pastel and Anglo Platinum, while the best companies to work for were KPMG, Sanlam, Pick n Pay, Momentum and Price Waterhouse Coopers.(12)
Data from the JobCraystal survey show that roughly half of South African employees are currently happy in their employment. However, this result should not be taken at face value. The survey results also indicated a low correlation between companies with the happiest employees and those classified as the best to work for. This demonstrates that employees that believe in their company’s culture and that identify with their employer’s vision do not necessarily feel satisfied with their job or with their future prospects in the organisation.(13) What companies can take away from this finding is that even if they provide a satisfactory work environment and have a culture and vision with which employees agree, employees also need to have their individual goals and requirements met in order to be happy.(14) One conclusion that can probably be extended to the larger South African corporate sector is that companies need to make sure to not only engage employees in their culture and vision, but also to provide them with clear opportunities for growth and development. Employees need to know that they are contributing to long-term goals, that the companies for which they work behave responsibly, and that their professional futures are promising.
Why it matters
Having an understanding of employment priorities and putting measures in place to ensure that employees’ professional needs are met are important for optimising overall employment experience thereby enhancing an organisation’s performance and future possibilities for growth. According to financial services firm, Deloitte, “too many organisations still do not have a realistic picture of the divergences between the attitudes and desires of their employees and the talent strategies and practices they have adopted.”(15) This situation has resulted in an increasing number of employees who wish to leave their current employers now actively testing the job market.(16) When McKinsey coined the phrase ‘War for Talent’ in 1998 to refer to the ever-widening supply and demand gap of executives in Corporate America, they attributed the cause of this talent shortage to, among others, increased job mobility and corporates facing stiff competition for executive talent from small and medium sized businesses.(17) This competition means that employers lose their best employees to companies that better suit their needs.
Due to the current characteristics of the employment market, South African companies cannot afford to lose the talent they have. Africa, South Africa included, has a significant shortage of specialised skills and it is estimated that over the next three years companies operating in Africa will see an estimated 75% increase in the use of expatriate staff.(18) In South Africa, only one in six high school graduates go on to pursue a tertiary education, a much lower proportion than in other middle-income countries.(19) Furthermore, a third of those who enrol in tertiary education institutions drop out within a year of doing so. The relatively low number of university graduates coupled with the frequent lament of South African employers that universities are producing graduates who are largely unemployable,(20) means that competition among South African companies for skilled employees is intense. Further compounding the problem of a lack of skilled employees in South Africa, by 2050, 97% of the 438 million people joining the global workforce will be derived from developing countries.(21) Thus, retaining the scant talent that South Africa has will become more challenging as skilled workers enjoy a far wider range of global job opportunities from which to choose.
It is clear then that employers cannot afford to lose their valued employees due to unsatisfactory working conditions and limited prospects. They also cannot afford to lose the best prospective employees to organisations which the employees perceive to value their workforce more. The strategic use of human resources will be a critical factor in helping to establish and grow business across the continent,(22) underscoring the need for companies to prioritise their workforces. One of the most tangible ways of succeeding in retaining talent is to become an employer of choice. This way a company has the best chance of attracting, developing and retaining high calibre people that will contribute to the growth and success of a company.(23)
However, as Deloitte has consistently found with its Best Company to Work For Surveys,(24) simply having in place strategies and supporting policies for the purposes of nurturing talent is not enough for employees to view a company as the employer of choice. Strategies must be “aligned with the needs and expectations of the workforce, understandable and accessible to all, and perhaps most importantly, executed appropriately and consistently by the organisation’s leaders at all levels” to ensure the retention of quality staff and the future growth of the company.
As the South African workforce becomes more diverse in terms of age, generation, race, gender and nationality, attracting, retaining and developing talent will have to become that much more sophisticated and complex.(25) According to Steve Bluen, Professor at the Gordon Institute for Business Science, in South Africa ongoing high rates of unemployment are accompanied by a shortage of specific skills and employers are increasingly faced with the need to become ever more “innovative when rewarding their people and keeping them stimulated and engaged in their businesses.”(26)
Being a good employer in South Africa’s corporate environment today, does not only mean offering a good and competitive remuneration or providing employees with a clear and logical career path (which is not necessarily a given in certain organisations); it means much more than that. It means promoting a harmonious and safe work environment, providing fair opportunities to all employees, motivating the workforce, making employees part of the business success and practically showing them the effect of their work. Nowadays, initiatives to improve human resources management practices and to engage, motivate and retain employees cannot be ignored; they ultimately will lead to satisfied and happy employees that will perform better and bring workforce and operational stability, thus collaborating with the growth of the company. As Bluen puts it “talent management has been placed firmly on the strategic corporate agenda.”(27)
Written by Micaela Flores-Araoz (1) & Claire Furphy (1)
(1) Contact Micaela Flores-Araoz and Claire Furphy through Consultancy Africa Intelligence’s Industry and Business Unit ( firstname.lastname@example.org).
(2) ‘South Africa profile’, BBC News, 6 January 2012, http://www.bbc.co.uk.
(3) ‘Best Company to Work For Survey 2012: Optimising workforce engagement in an uneven recovery’, Deloitte, http://www.deloitte.com.
(4) Best Employers and CRF Institute website, http://www.bestemployers.co.za.
(5) Best Employers and CRF Institute website, http://www.bestemployers.co.za.
(6) ‘Microsoft Rated as SA’s Best Employer by CRF Institute’, mybroadband, 25 August 2011, http://companies.mybroadband.co.za.
(7) The entire list can be viewed at http://www.bestemployers.co.za.
(8) Best Employers and CRF Institute, http://www.bestemployers.co.za.
(9) ‘Moving up in the world’, Mail and Guardian, 26 August 2011, http://mg.co.za.
(11) JobCrystal website, http://www.jobcrystal.co.za.
(12) ‘JobCrystal Happiness Indicator’, JobCrystal, 10 June 2012, http://www.jobcrystal.co.za.
(15) ‘Best Company to Work For Survey 2012: Optimising workforce engagement in an uneven recovery’, Deloitte, http://www.deloitte.com.
(17) Bluen, S., ‘The New (World) War for Talent’, BEST Employers, http://www.bestemployers.co.za.
(18) ‘Talent grab: How top companies are managing Africa’s skills shortage’, How We Made it in Africa, 5 March 2012, http://www.howwemadeitinafrica.com.
(19) ‘Education in South Africa still dysfunctional’, The Economist, 21 January 2012, http://www.economist.com.
(22) Talent grab: How top companies are managing Africa’s skills shortage’, How We Made it in Africa, 5 March 2012, http://www.howwemadeitinafrica.com.
(23) Bluen, S., ‘The New (World) War for Talent’, BEST Employers, http://www.bestemployers.co.za.
(24) Best Company to Work For Survey 2012: Optimising workforce engagement in an uneven recovery ’, Deloitte, http://www.deloitte.com.
(25) Bluen, S., ‘The New (World) War for Talent’, BEST Employers, http://www.bestemployers.co.za.