The rise of Artisan entrepreneurs in South Africa

Around the world – from the trendy east of London to the hipster capital of Montreal’s Mile End – the so-called ‘flat white economy’ continues to rise.

It comprises the thousands upon thousands of artisan entrepreneurs selling craft beers, ethically sourced coffee and organic, gourmet foods to consumers who crave healthy, sustainable and authentic eating experiences.

Artisan entrepreneurs started their rise after the 2008 recession. Just consider the fact that nearly one in five beers consumed in the US today is a craft brand, or that specialist coffee shops sales in the US have tripled to nearly $50 billion since 2002. And the trend has been picked up in South Africa, with more and more Small & Medium Businesses across the country serving customers with locally sourced ‘farm to table’ food and handcrafted products.

When we were evaluating the 702/CapeTalk Small Business Awards with Sage One this year, it was interesting to see how many artisan entrepreneurs there were among the nominees. Like their counterparts in North America and Europe, they are creating enormous economic opportunities for themselves while supporting local producers and giving consumers alternatives to big producers and retailers.

So how is this done?

Just think about how The Neighbourgoods market has revitalised its surrounding area in Braamfontein. This is one reason why we should support the rise of such businesses: they position themselves at the heart of the community. They support other small businesses and are effective job creators because of their focus on making high-quality goods with human care and love rather than mass producing products with machines.

The 702 winner this year, The Munching Mongoose, is a great example. This company scours South Africa to find the best local produce from small scale farmers and producers. Having secured high-quality produce, it delivers farm fresh milk, eggs, cheese, bread and an assortment of fruit and vegetables directly to its customers.

Other artisans nominated include Baseline, whose owners believe that bad coffee should not happen to good people and Las Paletas artisan lollies, which are made in small batches with fresh fruit, herbs, nuts and real dairy. What these businesses have in common is that they are founded by people with a passion for good food, environmental sustainability and healthy living.

Will you face challenges?

The Munching Mongoose has thrived, thanks to a receptive market, its exceptional customer service and the reach of the Internet. However, Brad Meiring, co-founder says that it hasn’t always been plain sailing. “Logistics has been a big challenge for us as we operate a delivery service and many of the small scale producers we work with do not have great business systems in place. This makes reliably sourcing goods and receiving them at an expected time difficult,” he adds.

For Kyle Dods from My Place Gourmet Group, the big challenge is switching to paying VAT: “We’re now in a position where we have to add VAT, which in some cases adds an additional R10 to our product. These price increases in turn affects our customers.”  

It is mandatory for a person to register for VAT if the taxable supplies made or to be made is, in excess of R1 million in any consecutive twelve-month period.

The artisan entrepreneurship space is challenging and having a passion for good food isn’t enough – you also need to be ready for long, hard hours spent pursuing your dream.

The most successful artisan businesses succeed by finding a niche, creating a personality for the business and building great customer relationships. They have a well thought out strategy about how to grow and scale a business that is based on the values of handcrafted care and the personal touch.

Healthy margins

What’s more, it’s important to look at how you will earn a healthy margin off goods that will be more expensive to make or source than the mass-produced alternatives. How do you balance quality and price to ensure profitability? How do you keep people coming back, even if you’re not the cheapest supplier on the block? Traditional business disciplines such as tight inventory management, market research, hard-hitting sales and good customer relationship management are all key to success.

Artisan entrepreneurs are thriving and delivering great service to their customers, but clearly, we could be doing more to help them grow. Like most small businesses, they would benefit from less tax and regulatory red tape, better access to finance and more support from bigger businesses. That said, advances such as online software and services, cheaper transportation and growing interest in locally produced goods all bode well for the future of South Africa’s artisan entrepreneurs.

Steven Cohen is the Head of Sage One International (Africa, Australia, Middle East and Asia).

Why cultivating resilience in a company is a good return on investment

Stress and burnout related to the increasing pace and intensity of work are on the rise globally.

A survey of over 100 000 employees across Asia, Europe, Africa, North America and South America found that stress, anxiety and depression in employees accounted for 82.6% of all emotional health cases in Employee Assistance Programmes in 2014, up from 55.2% in 2012. This is a hefty increase and indicative of our current constantly connected, “always- on”, highly demanding work cultures where stress and the risk of burnout are widespread. It is also a major cause for concern as stress directly affects work performance.

Since the pace and intensity of modern work cultures is not likely to change employees. If they wish to cope and remain healthy and productive they need to develop coping strategies. Whilst there is no silver bullet It seems it is a question of attitude and how we approach things.

More than five decades of research point to the fact that we need to cultivate resilience skills to navigate our working and personal lives successfully. So how can we develop resilience and stay motivated in the face of chronic negative stress, constantly increasing demands, complexity and change? The latest neuroscience, behavioural and organisational research suggests several ways to cultivate resilience:

Practise mindfulness

People in the business world are increasingly turning their attention to the mental training practices associated with mindfulness as this has proven beneficial in several ways:

• It predicts judgement accuracy and insight-related problem solving;
• It enhances cognitive flexibility;
• It facilitates job performance;
• It enhances overall employee well-being and organisational performance; and
• Mindfulness programmes have been shown to be practical and effective in decreasing employee stress.

Furthermore, integrating mindfulness into core talent processes such as on-boarding, manager training, conversations about performance, and leadership development is also critical although most organisations are not yet at this stage of adoption.

Diana Winston, Director of Mindfulness Education at UCLA’s Mindful Awareness Research Centre (MARC) says: “Mindfulness will be like the introduction of seat belts in cars; at first no one thought they were important and now they are a safety requirement. Mindfulness may become the seat belt of mental health and one day it will be taught in schools for all people to practice.”

To ensure mindfulness programmes are implemented successfully:
• They should be tied to other institutional priorities, like specific commitments in the area of health and wellbeing;
• They should be about cultivating resilience and offer skills for people to build on their innate human capabilities;
• Any resistance should be welcomed and embraced. A mindfulness programme is not a “one-size-fits-all” solution. Every culture is unique; and  
• Do your best to anticipate and understand any concerns, then initiate a conversation to address them.

A broad set of skills and behaviours that enable resilience in the workplace are simply a good return on investment. Mindfulness is not a quick fix it’s a practice.

Compartmentalise your work load

Dedicating specific times to specific work activities. Serial monotasking is useful because recent research published by the American Psychological Association has shown that constantly switching from one type of task to another makes it difficult to tune out distractions and reduces productivity by as much as 40%. While this approach may seem overly regimented to some, it does create the optimal set of conditions for processing information effectively and making quality decisions while at the same time decreasing cognitive load and strain.

Work then detach

Mental focus, clarity and energy cycles are typically 90-120 minutes long so it is useful to take a break to balance work activity as this can promote greater energy, mental clarity, creativity and focus. Ultimately growing our capacity for resilience.

Develop mental agility

Learn to respond to rather than react to any difficult person or situation. This means being able to take a step back from what we are experiencing to reflect, shift perspectives, create options and make wise choices. In so doing we activate the thinking centre of our brains rather than the emotional centre, an invaluable skill in a demanding, high-performance workplace.

Cultivate compassion

This is one of the most overlooked aspects of the resilience skills set. Research conducted at Berkeley suggests that compassion increases positive emotions, creates positive work relationships and increases cooperation and collaboration between colleagues, increases happiness and decreases stress. Compassion and business effectiveness are not mutually exclusive. The success of individuals, teams and organisations rely on a compassionate work culture.

Because stress in the workplace has a high financial impact, a broad set of skills and behaviours that enable resilience in the workplace are simply a good return on investment. A study published by PwC in 2014, showed that initiatives and programmes fostering a resilient and mentally healthy workplace, produce a return on investment of $2.30 for every dollar spent. The return is manifested in lower health care costs, higher productivity, less absenteeism and a decreased turnover in staff.

Building an organisational culture that encourages and supports resilience training just makes good business sense.

Susi Astengo is the Managing Director of CoachMatching.

Do office workers now spend an hour a day on their smartphones?

South Africa’s office workers spend nearly an hour a day working on their mobile devices despite having access to more powerful computers. And they see smartphones as preferable to tablets when it comes to doing work on a mobile device.

This is according to a recent survey of 12 000 office workers nationwide by Inspiration Office. The survey quizzed South African office workers on their technology preferences in the workplace.
The results show how mobile devices are making greater inroads to just about everyone’s working life. Even if people have access to desktops and laptops, they spend an hour a day working on their smartphones. We expect this number to climb.

When asked which mobile device was most needed for work, 52% said a smartphone while 38% said a tablet. Interestingly people in both categories said they would prefer to bring their own devices to work (the bring your own device (BYOD) phenomenon as it is called), a global trend in which workers associate greater enjoyment in using their own devices.

The survey also asked about workers’ preferred operating system. When it came to desktop computers, 80% said they preferred windows while only 11% preferred macOS, Apple’s desktop operating system.

When asked the same question about laptops, 79% said they prefer windows while 15% preferred Apple’s operating system.

On smartphones however, 41% prefer Apple’s IOS operating system to Google’s Android at 50%. For tablets, Apple comes top at 49% compared to Android’s 37%.

Interestingly the survey also showed that when people work on smartphones or tablet’s, 77% prefer to do it away from their desks, even if they are still in the office.

It’s a habit – people think of smartphones and tablets as mobile tools so they often use them elsewhere.

Many of our clients are now setting up more casual areas of chairs, couches and mini desks where people can nip away from the desk and work elsewhere for a while.

This is especially true for millennial workers who tend to be less inclined to sit at their desks all day and love using mobile devices. Given the rise of mobile devices offices would have to change to accommodate the demand for working away from the traditional desk.

When asked which were the ‘most important IT features’, 73% said remote access, 50% said high performance machines, 44% said an ability to access applications offline while 32% said some sort of protection for their devices against weather and/or dirt.

Finally, people were asked about something every office worker has strong views on: IT Support.

The survey asked people where they turn to for IT support: 35% said the IT help desk, 21% simply googled the problem while 13% asked colleagues.

Richard Andrews is the Managing Director of Inspiration Office.

What is the application of changes to the LRA?

Whether the employees’ fixed term contracts were cancelled to avoid the ‘deeming provisions’ of the Labour Relations Act (LRA)?  If so, whether the termination of the contracts should be regarded as an unfair dismissal?

Court’s decision

In the case of Lehkgothaoane and others / Sandoz & Capital Outsourcing Group (2016) 25 NBCCI 7.1.8, the employees began their employment with Sandoz, as electricians, in 2008 and 2011 respectively. The employees were then transferred to a temporary employment service provider, Capital Outsourcing Group. The employees were both dismissed on 15 May 2015 and were subsequently re-employed on 29 May 2015 by Sandoz on fixed term contracts of employment. They were then dismissed again on 30 September 2015 by Sandoz. The employees referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration. The dispute was ultimately referred to arbitration before the National Bargaining Council for the Chemical Industry (‘NBCCI’).

At the NBCCI the employees argued that by dismissing them for the first time and then rehiring them, Sandoz was in effect attempting to circumvent section 198A of the Labour Relations Act 66 of 1995 (‘LRA’), and that the termination of their contracts on 30 September amounted to an unfair dismissal.

Section 198A(1) defines ‘temporary employment services’ as work done by an employee:
for a period not exceeding three months;
– as a substitute for an employee of the client who is temporarily absent; or
– if the work is determined to be a temporary service by a collective agreement, a sectoral determination or a notice published by the Minister.

Section 198B(3) states that an employer may employ an employee on a fixed term contract or successive fixed term contracts for longer than three months of employment only if:
– the nature of the work for which the employee is employed is of a limited or definite duration; or
– the employer can demonstrate any other justifiable reason for fixing the term of the contract.

The employees alleged that section 198B(3) did not apply to them because they had been performing the same work since the commencement of their employment with both Sandoz and Capital Outsourcing Group. In so doing, the nature of their work was not for a limited duration and hence they were not performing a temporary employment service.

The employees were also responsible for training other employees so that such employees could take over their positions upon the termination of their employment.

The arbitrator agreed with this reasoning. He found that because the employees had been performing the same duties for many years, they could not be said to be performing a temporary service. Furthermore, as indicated by section 198A(3), an employee who is not performing a temporary service is deemed to be the employee of the client. For this reason the arbitrator held that the applicants were indeed the permanent employees of Sandoz.

Having regard to section 198A(4), the arbitrator held that the termination by the temporary employment services of an employee’s service with a client, whether at the instance of the temporary employment service or the client, for the purpose of avoiding the operation of subsection 198A(3)(b) or because the employee exercised a right in terms of this Act, constitutes a dismissal.

Importance of this case

This case illustrates how the changes to the LRA relating to a TES employee who earns below the threshold are to be applied. Such an employee who is not engaged in “temporary services” will deemed to be an employee of the client of the TES.

Furthermore, if such employees’ temporary contracts of employment are terminated so as to avoid the ‘deeming provision’ being triggered, this too will amount to a dismissal.

Andre Van Heerden is the Senior Associate and Jacques van Wyk is the Director at Werksmans Attorneys.

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