Lesson 1, Topic 1
In Progress

6.5 The ability to identify trends in employment and apply corrective systems to bring them into line with legislation and company procedures is demonstrated.

ryanrori January 12, 2021

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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 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. human resources management plays a crucial role 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’.

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.

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).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. 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’

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.” This situation has resulted in an increasing number of employees who wish to leave their current employers now actively testing the job market. 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. 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.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. 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, 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. 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, 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.

However, as Deloitte has consistently found with its Best Company to Work For Surveys, 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. 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.”

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.”