Hugh Myres


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Forward thinking companies take strategic and ethical approach

The recent murder of an anti-mining activist has thrown into the spotlight the critical need for business to understand societal expectations if it wants to be sustainable.
The assassination of Wild Coast local community leader and environmental activist, Sikhosiphi Rhadebe, is the latest warning sign that business is on a collision course with groups and individuals affected by their organisations’ operations, unless managers and professionals learn to understand the social and environmental context of their organisations better.

The context of mining has changed. Natural resources are becoming increasingly scarce and harder to get at. At the same time, a growing population means there are more demands on these resources. Better access to information and the legacy of a trust deficit between business and local communities, particularly in the extractive sector, is translating into more instances of communities in conflict with businesses whose operations put still greater strain on the environment on which they depend.

Rhadebe had for more than a decade opposed an Australian developer’s bid to mine titanium on 22kms of pristine Wild Coast mineral sand beaches and dunes close to the Xolobeni settlement, as well as plans to build a limited-access freeway by the South African government. The mining company denies any involvement in Rhadebe’s killing, but this has done nothing to dampen speculation that his activism was the cause of his death.

The most effective way for business to manage conflict and avoid such situations from developing in the first place, is to develop a strategy for early, regular and extensive stakeholder engagement that allows managers to communicate more transparently with communities affected by their operations.

Organisations that choose to ‘short circuit’ the social and environmental context of their operations do so at their own risk. This is not acceptable globally, regionally or locally and especially in a country like South African already facing a water crisis and the impacts of climate change.

An EU funded Atlas of 600 international mining and oil companies published last year, identified more than 1,500 ongoing conflicts raging over water, land, spills, pollution, ill-health, relocations, waste, land grabs, floods and falling water levels.

According to the Shared Value Initiative, a global community of leaders who find business opportunities in addressing societal challenges, oil and gas and mining companies operate in some of the most underdeveloped regions on earth and are losing billions each year to community strife. As a result, forward thinking mining companies are changing their strategy.

Speaking at the World Economic Forum in Davos earlier this year, Mark Cutifani, CEO of Anglo American said: “As miners we need to make sure that what we do makes a positive difference to the people affected by our operations and help them maintain a meaningful existence.”

Keith Slack, global programme manager for Oxfam America’s extractive industries team commented: “Mining companies do not have a choice – their continued ability to get access to resources depends on their having positive and constructive relationships with local communities. The more progressive international mining companies now understand this.”

Cutifani recommends that when a miner goes into a community they should start by asking the locals what they want for their children in 10 to 20 years down the line.

This engagement needs to happen at the highest level of an organisation; it is not something that can be outsourced.

The industry needs more voices like Cutifani and Slack who lead from the front in developing a strategic and ethical response to this situation. Industry leaders must have foresight by paying attention to what is emerging and develop appropriate responses by engaging with diverse perspectives.

The world needs mining. World demand for the minerals used in electronic devices such as smartphones and laptops alone is not going to slow down any time soon. But the industry urgently needs a more strategic understanding of what is required to contribute to human development and avoid further environmental degradation.

What is key for the planet’s sustainable future is an understanding that the economy (business) is dependent on a flourishing society which are both in turn dependent on a functioning ecosystem and not the other way round.

Elspeth Donovan is the Deputy Director of the South Africa Office of the Cambridge Institute for Sustainability Leadership.

Is employee engagement the elephant in the room?

Most employees never talk about employee engagement, like it doesn’t even exist, but it does and it is more important than people think.
The definition of employee engagement is a “workplace approach resulting in the right conditions for all members of an organisation to give of their best each day with an enhanced sense of their own well-being.”

Employee engagement is essentially like keeping your employees emotionally employed and thereby increasing their dedication to your organisation and achieving your business product whether it is tangible or a service which you provide to your clients.

Can you say that you fully engage with your staff? Do they feel that you are committed to them as an employee? An employee’s commitment to the organisation is a key ingredient to employee engagement and has been shown to be related to employee turnover. It is quite obvious that the more committed your employees are, the more likely your organisation is to have a lower employee turnover and a higher staff morale. Higher staff morale goes a long way in producing higher profits.

Recruiting and hiring new employees is just the first step in creating and keeping a strong work-force. The most difficult thing nowadays is in keeping them. An organisation needs to focus on keeping its employees satisfied. If this is done it will help the organisation to function better and have lower employee turnover. This will also go a long way in helping an organisation’s reputation, and as you know the old saying does go, “You’re only as good as your reputation.”

It is up to the management of an organisation to keep employee engagement alive and this can be done in a number of ways.

Some of these include:

• Fostering an engaging environment by developing a targeted, proactive strategic communication plan;
• Offering a competitive benefits package that fits their employees’ needs;
• Using incentives to help keep workers motivated and feeling rewarded;
• Fostering employee development with open communication between employees and management;
• Involving management at all levels; and
• Effective communication of the business’s mission.

It can be concluded that the best workplaces give their employees a sense of purpose, help them to feel that they belong, and enable them to make a difference. Team-building activities can be used as an important tool to increase communication, fun, and engagement in addition to promoting and encouraging teamwork and collaboration. Organisations should bear in mind that in order to retain employees and increase engagement, management has to make the first move.

The usual eight hours a day sitting at your desk is a thing of the past. We live in an ever-changing, fast-paced world, and defining work in such a traditional manner doesn’t make sense to an employee. Accordingly, managers along with organisations should start considering introducing more fun, out-of-the-box activities in today’s workplace to increase employees’ engagement and improve overall organisational performance.

Lauren Apperley is the HR Manager at Hobbs Sinclair Chartered Accountants.

The insourcing vs outsourcing dilemma

Outsourcing has been an endangered species for some time, and the security industry is no exception.
While there are many compliant companies offering a solid, compliant service to hundreds of corporate companies and creating job security for thousands of individual security officers, the security industry now joins the ticking time bomb that is the local economy.

The birth of our democracy in 1994 saw the introduction of a new labour law disposition, which has been described by many global labour experts to be among the most liberal in the world. While South Africa’s newly elected leaders had good intentions at the time, and had hoped to create a labour market in which every employee would enjoy full job security, we find ourselves now 22 years later, plagued by a deluge of unintended consequences. Aside from the view that labour laws are overwhelmingly biased towards the employee, there is also a perception that the associated red tape is hindering foreign investment. In a nutshell, possibly even holding us back in terms of global competitiveness.

In a country where one of the greatest contributors to economic stability is the small-to-medium sized business, is it fair that this organisation is held to the same prohibitive labour standards as a large corporate organisation? Then again, should a global corporate, which is creating vast employment opportunities that otherwise may not exist, be restricted by the local laws dictated by government?

With an unemployment rate now reaching the 12 million people mark, how long can government and the unions turn a blind eye to the fact that maybe it’s the labour laws themselves that are giving potential employers cold feet?

To employ an individual these days, every business or business leader faces a multitude of challenges. The employee needs to be sufficiently skilled or qualified, and often the employee requires additional training to perform at full capacity. Then there are the significant number of leave days, sick days, maternity leave and compassionate leave days that the employee is entitled to.

All of the employee’s tax, provident fund and Unemployment Insurance Fund costs also become the responsibility of the employer. Then we come to performance and misconduct. Labour law dictates that catching any employee engaged in any level of misconduct or non-performance must be followed with a lengthy process of verbal and written warnings and then hearings. Even if the employee is eventually found guilty and dismissed, they are still in a position to fight for their case through the Commission for Conciliation, Mediation and Arbitration (CCMA).

Then there’s the matter of legal strike action. If your employee belongs to a union, they will go on strike by choice or force – whenever the union demands that they do so. Once again, businesses are forced to pay salaries to people who have not turned up to work, and adjust their salaries based on the result of a wage negotiation and not the employee’s actual performance.

Business experts have said that in order for the average business to remain profitable, the employee’s performance output should be three times their basic salary, but this is rarely the case. So employers often end up with a deluge of below average performers that dangle the labour legislation carrot. In fact, many employers have stated that they would employ far more people, were it not for the seemingly impossible barriers created by legislation.

It really isn’t any wonder then that the emergence of outsourcing and labour broking became a highly attractive option for many employers. When it comes to non-core organisational services, including: cleaning, landscaping and security – employers recognised an opportunity to gain access to well-trained groups of individuals, while dealing directly with one company that alleviated the administration associated with employing these individuals.

It wasn’t long before South Africa’s local unions, followed global trend and turned their attention towards crumbling the outsourcing sector, citing the outsourcing sector as the enemy of the economy, one that was resulting in the retrenchment of its members, a major barrier to employment, and a practice that prevented thousands from enjoying the benefits and security of long-term employment.

Subsequently, we’ve seen university students take up the union cause as well, and the impact on local tertiary intuitions has been devastating to say the least in terms of riot action, damaged property and a severe disruption to normal educational programmes and exam schedules.

The view that the total ban of outsourcing could create further barriers to full-time employment does not seem to be resonating with unions, their members or students. The demise of outsourcing will result in thousands not being employed with labour brokers and fewer and fewer being employed full time. The fact that an employer will simply end up hiring one full-time individual instead of five outsourced individuals simply due to cost and time restrictions is just not sinking in. The cost of employing someone full time can be prohibitive when you would rather just get one with the job of running your business.

In conclusion, the attack on the outsourcing industry could have long-term devastating consequences for the economy. If companies are left with no option but being forced to employ full-time staff, they will no doubt have to reconsider their options.

Jenny Reid is the CEO of iFacts.

How trustees can help employees make more at retirement

According to South African Finance Minister, Pravin Gordhan, only about 10% of South Africans enjoy a ‘decent retirement’. For the rest, retirement means financial hardship or, at least, a drop in lifestyle.
The problem is that the retirement industry habitually blames savers for these poor outcomes. They start too late, they save too little, and they do not preserve when they change jobs. Invariably, the call is for more investor education. But, this achieves very little if employees refuse to engage, or take an active interest in the retirement fund. Unfortunately, these employees are in the great majority.

Even committed savers fall short. According to a study by Alexander Forbes, the average final income replacement ratio of long-term retirement members is only around 30% – half the recommended minimum.

Retirement fund trustees are unable to regulate their members’ savings habits, despite their best intentions. Four changes to a current fund strategy can significantly boost members’ savings over the long term, giving them up to 140% more money in retirement. The four key areas that should be considered in a fund strategy are: asset allocation, fees, switching and default preservation.

Asset allocation

This is the most critical investment decision, as it has the biggest impact on the long-term savings outcome. Although most trustees appreciate that shares (equities) deliver a higher return than cash or bonds over the long term (averaging around 7% pa versus 1-2% pa, after inflation), few truly appreciate the dramatic impact that the asset allocation has on the fund member’s retirement income.

Given that the share market has outperformed the other two asset classes by a factor of 40 or more, making even modest changes to the asset allocation can have a significant impact on the long-term savings outcome. For example, increasing the exposure to growth assets from 60% to 77%, would (based on historical returns), increase the annual, long-term, real (after-inflation) return of a balanced portfolio by some 1% pa. This would give the investor 30% more money at retirement.


The retirement industry’s high fees have come under scrutiny in recent years, not least of all by National Treasury who delivered a 90-page indictment in its 2013 Retirement Reform Discussion Paper ‘Charges in South African Retirement Funds’.

While no-one will argue that, all else equal, lower fees are preferable to higher fees, again few people fully appreciate the insidious, long-term impact of fees.

Some may believe that, short term, paying a higher fee for the prospect of a better return is a worthwhile gamble. This may pay off once in a while but in the long run, the house – or rather the market – almost always wins.


Investment choices has become an ever-present in South African retirement funds. Most funds allow members to choose from a selection of funds, investment styles and investment strategies, as well as switch on a regular basis.

However, it is the trustees who are best-placed to design or select the optimal portfolio to this end. For uninformed members, investment choice is a curse rather than a blessing as it tempts them to do the wrong thing at the wrong time. Despite all good intentions, they are likely to make emotional decisions and ditch the fund that has just done badly, and embrace the one that has just done well. This approach is based on short-term thinking, which effectively leads them to buy high and sell low.

It takes a disciplined, informed, even detached person, to withstand the urge to react to market movements and adhere to the original plan. A trustee can significantly improve members’ savings outcome by setting an appropriate ‘do-nothing’ default portfolio strategy that excludes choice and switching.

Default preservation

Of course, a trustee’s good intentions and fund design will count for little if fund members do not stay the course and cash-in when they change jobs. A member’s opportunity cost of not preserving and missing out on the tremendous savings boost generated by compounding returns in the last quarter of a forty-year savings term can be the difference between retiring comfortably or not.

To illustrate (using a high equity, 1% pa fee example), a forty-year savings term will reap almost four times more money than a twenty-year term. The reason, over the last twenty-years, more than 80% of the fund’s gains derive from investment returns on an ever-increasing base, rather than from additional contributions.

The great majority of fund members do not preserve when they change jobs, mostly due to short-term lifestyle considerations, such as taking off for a period or paying down debt. Although there are no laws that compel preservation, the opt-out principle that underlies the National Treasury’s default preservation design intends to raise the current preservation rate.

Trustees can take a proactive stance on this by providing a default preservation option before this becomes compulsory; and by implementing a communications policy that unambiguously brings the preservation option – and the cost of not preserving – to the exiting employee’s attention.

In summary

Individually, each of these changes will greatly enhance any fund members’ retirement; together they can completely transform it.

The choice is clear: retirement fund trustees can kick the proverbial ‘can down the road’ and let fund members live with the consequences of this short-termism – or, they can make a big difference and leave a lasting legacy by implementing these four cornerstones, potentially achieving up to 140% more money for members at retirement.

Tracy Jensen is the Chief Product Architect at 10X Investments.

Five qualities employers look for in job candidates

A good degree or professional certification can help secure an interview for your dream job, but once you’re sitting in front of the recruiter or potential employer, you’ll need to show what you can offer in addition to your qualifications.
Today’s top employers are looking for more than the right training and education.

They are seeking employees who are well-rounded, adaptable, committed and a good fit for their organisational culture.

Here are a few attributes that recruiters and potential employers look for:

1. Mind-set

Employers are looking for attitude as much as they’re looking for aptitude when they hire. They’d rather develop someone with the right outlook who needs some training than hire someone with great skills and low motivation.

Honesty, accountability, flexibility, curiosity and commitment are all as important to employers as your qualifications. If you can show that you’re motivated, upbeat, and eager to learn, that will give you an edge in the job market.

2. Interpersonal skills

Today’s workplace is diverse and collaborative, which means that most organisations are looking for people with high levels of emotional intelligence. Someone with good interpersonal skills is more likely to thrive than a superstar who lacks the tact and professionalism needed to play well with others. As good as your degree and experience might be, a recruiter or potential employer will also want to know that you can collaborate and lead.

3. Life experience

Employers often like to see that their employees have interests outside work and that they can bring diverse life experiences to their job. A modern office is a multi-disciplinary environment. The leadership skills you learnt as a school rugby captain, the strategic thinking you developed playing competitive chess, the ability you developed to write clearly from your love of reading, your exposure to different cultures during a gap year of travelling – these can all be as valuable to an employer as your formal qualifications.

4. Work experience

Young jobseekers often feel caught in a catch-22 situation – they can’t get experience because no one will give them a job and they can’t get a job because they have no experience. Against this backdrop, it’s important to seek out experience to add to your CV. You can volunteer at a charity (many non-profit organisations need help in disciplines like IT, finance or marketing), take vacation jobs, or start up a small business to sharpen your skills and get practical experience.

5. Cultural fit

The question of how you’ll fit in will generally be top-of-mind for someone interviewing you for a job. Cultural fit is about how likely you will be able to adapt to the core values and collective behaviours that make up an organisation. Having the right fit with a company means you’ll be happier at work and that you’ll be more likely to perform to the organisation’s expectations.

There are many factors that shape a corporate culture – corporate policies, geographic location, industry, size, the personalities of the founders and managers, values, and more – and the trick is to find a place to work that suits your personality and working style.

Remember that how you position yourself is as important as your degree – show employers what you’ve got beyond the piece of paper.

Heidi Duvenage is the Head: Sage Talent Solutions.

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