How CEO confidence rises despite new risks and uncertainty

Worldwide, CEOs’ confidence levels for their growth prospects and outlook for the economy is back on the rise amidst new risks and uncertainty.

In PwC’s 20th annual survey of CEOs worldwide, 38% (2016:35%) are very confident about their company’s growth prospects in the next 12 months while 29% (2016:27%) believe global economic growth will pick up in 2017.

Just over one-third (33%) of South African CEOs are very confident of their company’s own growth in the next 12 months, four points down on last year, and five points below this year’s global average (38%). Furthermore, only 19% expect global economic growth to improve in the next 12 months, 10 points below the global average.

Despite significant challenges in 2016, CEO confidence is on the rise – albeit slowly and still has some way to go from the levels that we saw back in 2007. Across the globe, there are signs of optimism despite mixed views on how the global economy will respond to the recent US presidential election result as well as the outcome of the UK Brexit vote.

The global survey results, based on interviews with 1379 CEOs from 79 countries, were released at the World Economic Forum annual meeting in Davos yesterday. In South Africa 36 CEOs from a broad spectrum of listed and privately-owned companies participated in our survey.

It is positive to note that local CEOs expect to increase their headcount in the next 12 months. CEOs are promoting talent diversity and inclusiveness; they have implemented strategies to reflect the skills and employment structures needed for the future.

PwC’s annual 20th Global CEO Survey explores what CEOs in 2017 think about three imperatives: a people and technology strategy that is fit for the digital age; preserving trust in a world of increasingly virtual interactions and making globalisation work for everyone by engaging even more with society and collaborating to find solutions.

The challenge to all three imperatives is leadership. How leaders engage with employees and stakeholders has never been more important. A company’s strategy must be built upon a long-term vision of growth, access, equality, innovation, and the human endeavour.

Where CEOs will look for growth

PwC’s first global survey (1997) showed emerging markets – including China and India as a sure bet for success. But the changeability of markets, exacerbated by current volatility, has caused CEOs to turn to a greater mix of countries. This year’s survey shows the US, Germany and the UK have become bigger priorities, while enthusiasm for investing in Brazil, India, Russia and Argentina has lessened from three years ago.

South African CEOs named China (36%), the UK (31%), the US (25%) and India (22%) as the most important countries for their organisation’s overall growth prospects.

New York (8%), Tokyo (8%) and London (19%) were also identified as the most important cities to an organisation’s overall growth prospects over the next 12 months.


While 91% of South African CEOs are very confident of their company growth over the next three years, their levels of concern about exchange rate volatility (92%), uncertain economic growth (92%), overregulation (89%), social instability (89%), and geopolitical uncertainty (83%) remain very high.

Of business threats, 89% (compared to 77% globally) of South African CEOs cited the availability of key skills, 69% (compared to 49% globally) cited volatile energy costs, 67% (compared to 61% globally) cited cyber threats, and 64% (compared to 70% globally) stated the speed of technological change as concerns.

Driving corporate growth

This year, 83% of South African CEOs (compared to 79% globally) plan to expand by way of organic growth in the next 12 months. 69% of local CEOs (compared to 62% globally) plan to implement a cost-reduction initiative. In addition, 61% of CEOs (compared to 48% globally) plan to enter into a new strategic alliance or joint venture, and 53% (compared to only 41% globally) propose a new M&A.

Technology and trust

CEOs say that technology is now inseparable from a business’ reputation, skills and recruitment, competition and growth. 61% of South African CEOs say technology has either completely reshaped or had a significant impact on competition in their industry. Furthermore, 75% say it will have a major impact in the next five years.

Twenty years ago, trust wasn’t high on the business agenda for CEOs. This year, 58% of CEOs globally worry that a lack of trust in business will harm their company’s growth, up from 37% in 2013. After several high-profile technology and security issues for big companies, CEOs identified cyber security, data privacy breaches and IT disruptions as the top three technology threats to stakeholder trust. More than half of South African CEOs (58%) cited risks from the use of social media, 53% cited breaches of data privacy and ethics, and 50% cited cyber security breaches as concerns.

Headcount and talent

Concern about skills has more than doubled in 20 years (from 31% concerned in 1998 to 77% in 2017) and human capital is a top three business priority, with diversity and inclusiveness and workforce mobility amongst the strategies being used to address future skill needs. Skills availability is a concern for over three quarters (77%) of business leaders, and is highest for CEOs in Africa (80%), and Asia Pacific (82%).

More than half of South African CEOs (58%) expect to increase their headcount in the next 12 months, with 14% planning to cut their workforce.

Impact of globalisation

More than half of CEOs (58%) globally think it has become harder to balance globalisation with rising trends in protectionism. For the past 20 years CEOs have largely been positive about the contribution of globalisation to the free movement of capital, goods and people. However, this year’s survey respondents are sceptical that it has mitigated climate change or helped create full and meaningful employment to close the gap between rich and poor.

72% of South African CEOs (compared to 62% globally) said globalisation had to a large extent helped with universal connectivity, and 44% (compared to 60% globally) said it had helped with improving the ease of moving capital, people, goods and information.

Looking forward, CEOs will require a different set of skills. The events of the past year have shown us just how interconnected the interests of shareholders and other stakeholders really are. Those businesses that articulate their purpose, anticipate risks and adhere to the value they profess will thrive. Businesses that ignore the power of the people will jeopardise the growth they seek.

Dion Shango is the CEO of PwC Southern Africa.

Why it’s so important to have the right people in payroll

It’s not uncommon for a payroll to be consistently managed so poorly that workers threaten to strike over incorrectly administered pay.

Often, the person administering the payroll is not adequately qualified for the job.

Such risks are why hiring accredited payroll practitioners is so important. Yet, many employers don’t realise how much skill it takes to run a payroll. There are literally hundreds of legal requirements and specialised procedures to follow. It’s therefore critical that organisations have professional payroll administrators who know, understand and can practically implement them.

So what do the top payroll administrators know (that business managers sometimes don’t)?

Correct procedure

Payroll consists of various processes that must be correctly executed. Qualified payroll administrators know these processes intimately. These processes include record keeping, employee take-on, month-end procedures, year-end procedures, and more.


There are many complex payroll calculations related to tax, medical aid, pension funds, provident funds, allowances, reimbursements, deductions or bonuses. A payroll administrator knows how to perform them in accordance with the latest legislative requirements.

The law

Payroll is governed by an extensive set of legal and regulatory requirements. Payroll administrators are trained in the law and ethical governance, and keep themselves updated on new standards as part of their duties. So they act as advisors to their organisations, guiding them in the right direction to avoid legal problems.

Information management

Payroll information and data must be collected, stored, secured, destroyed and used in accordance with various laws and accepted procedures. The safeguarding of employee data must adhere to the Protection of Personal Information Act. The proper information must also be submitted to the government at defined intervals. And correctly calculated payroll aggregates must be reported to accounting for recording in the general ledger. Payroll administrators are well versed in the function of information inside and outside the organisation.


Employee tax is so critical it demands special attention and skills only a professional payroll administrator can provide. This is especially true of larger organisations where the taxable portion of intricate remuneration, allowances, expense claims, deductions, bonuses or perks schemes is difficult to determine.

Ethical practices

Accredited payroll administrators are specifically disciplined in ethics and bound to the association’s Code of Professional Conduct. Not only do payroll administrators have an authoritative standard to work to; employers also have in SAPA a means to resolve unethical or unprofessional behaviour. The same can’t be said for non-certified administrators.

Project management

Payroll administrators are also trained to work in dynamic environments like project management where each payroll project might be different from the last. They therefore have project management training and can often act as project administrators.

Strategic advisors

Overseas companies see payroll for what it is – a key business enabler. International payroll administrators can work towards a Master’s Degree in payroll management and provide direction to national and global payroll initiatives. But even a single organisation can derive such value from a well-trained payroll administrator.

Payroll administrators offer a wealth of knowledge that an employer can leverage to their benefit. If organisations see payroll administrators as managers rather than workers, they will appreciate the strategic value they stand to gain from their input.

Lavine Haripersad is the Director of the South African Payroll Association (SAPA).

How technology forces truly converge

It has been on the cards for some time and the proverbial writing has been on the wall in 2017, the so-called ‘nexus of forces’ will impact business operations in a major way – and companies will either be ready or go out of business. That is the reality facing all industries today.

2016 has been a challenging and volatile year, and it is really challenging to make any predictions with any level of certainty. However, he does believe 2017 will be the year where connectivity will make all the difference, where undersea fibre cable systems and last mile connectivity will truly count.

Most businesses have already begun with the migration to digital, transforming their core systems and leveraging technology like the Cloud, big data, analytics and the Internet of Things. This transformation will become more and more entrenched in the future.

2017 is likely to be a land-mark year for service providers and solution developers. If they keep ahead of the growth curve, tailor their offerings and engage the market effectively, there is little to stop them from capitalising off digital transformation and the rollout of third platform technologies.

Spin-off results of this convergence of technology is the advent of M2M (machine-to-machine) connectivity, the widespread integration of sensors and the opportunity to benefit from the multitude of connected ‘things’.

Businesses will increasingly adopt the hybrid Cloud model to streamline ICT infrastructure management and ensure cost efficiency, as well as take heed of Artificial Intelligence (AI) as influences like robotics, smart technology and platforms grow in significance and are applied at various levels of society.

Make no mistake next year is going to be a game-changer, to coin a very over-used expression, but it will be … businesses, no matter what focus or direction, or size for that matter, will have the same opportunity and this coming year can be the make or break for most operations, depending on their digital transformation strategy.

Ernest Kleynhans is the MD of Assimilated Information Systems Pty Ltd.

What you should know before monitoring employees’ emails

In today’s world, it is virtually impossible to conduct business without using some form of electronic communication. Many employers provide electronic resources such as e-mail and internet facilities to their employees to enable them to carry out their duties and functions.
The inevitable question is whether or not employees can claim a right to privacy when using their employer’s electronic resources. In answering this question, the constitutionally enshrined right to privacy must be forefront in our minds. After all, this includes a person’s right not to have the privacy of their communications infringed. Similarly, the common law provides that individuals have an objectively reasonable expectation of privacy which may not be wrongfully or intentionally interfered with. This protection extends to the collection, processing and storage of personal information as well as to the disclosure of personal information to third parties.
However, the right to privacy, like other rights contained in the Bill of Rights, is not absolute
The Regulation of Interception of Communications and Provision of Communication-Related Information Act, 70 of 2002 (the Act), which applies to direct oral communications and to indirect communications such as the telephone, voicemail, e-mail, the internet and an internal mail system, prohibits the interception of employees’ communications except in certain circumstances.
Essentially a communication may be intercepted by anyone who is a party to the communication, unless the purpose of the interception is to commit a criminal offence, or with the written consent of a party to the communication.
A communication may also be intercepted in the course of carrying on any business if it relates to that business; or if it takes place in the course of carrying on that business, as long as it is done with the consent of the telecommunication system controller who is usually the chief executive officer or a duly authorized officer of the employer. In addition, a communication may be intercepted if the purpose of the interception is either to establish the existence of facts; to investigate or detect unauthorized use of the telecommunication system; to secure the effective operation of the telecommunication system; or to monitor calls to confidential telephone counselling or support services. Further, in order for interception to legally occur,  the  telecommunication system must be provided for use wholly or partly in connection with that business; and  the system controller must have either  made all reasonable efforts to inform all potential users of the system in advance that communications may be intercepted, or obtained the express or implied consent (not necessarily in writing) of the user to the interception.
What this effectively means is that before an employer can justify intercepting its employees’ communications, there must be a valid business rationale to do so. However, whether or not this would permit an employer to intercept all communications is yet to be determined by our courts. Arguably, the monitoring and protection of the business from abuse of its online resources may be sufficient justification.  
What employees need to understand is that evidence that has been unlawfully obtained is not necessarily inadmissible in civil proceedings. A court or arbitrator has, in certain circumstances, the discretion to admit unlawfully obtained evidence. Thus an employer may be able to use unlawfully obtained evidence to justify dismissing employees for misconduct. However, this approach is risky as, if the evidence is not permitted in any subsequent proceedings, the employer may not be able to prove that the dismissal was for a fair reason. A greater risk is that the employer may be held criminally liable for breaching the Act. A failure to comply with section 6(2) of the Act is an offence and carries a penalty of a fine not exceeding ZAR 2 million or imprisonment of up to 10 years.
 In order to safeguard the business, employers should implement an acceptable usage policy which regulates the use of its electronic resources and provides, among others, that employees do not have an expectation of privacy when using company owned electronic resources. Obtaining the employees consent to intercepting communications when using these resources would go a long way to ensuring that the employer’s conduct in this regard does not fall foul of the Act.

Rosalind Davey is a partner and Rovina Asray is a senior associate, Employment & Benefits Practice at Bowmans.

Why distance learning changes face of sector with the help of technology

Prospective students are increasingly opting for distance learning as a first choice, with the sector experiencing strong growth as a result of its harnessing of technological advancements.

Educational technology has taken the distance and isolation out of distance education and, as a result, the sector is benefitting from the fact that it speaks directly to what modern, self-directed young people seek when furthering their education.

In 2017, many people have neither the time nor patience to do things the “traditional” way, and distance learning has sufficiently come of age for it to be viewed as a viable, quality alternative to fulltime, contact study.

Distance education has traditionally been the domain of working adults and those who could not afford or gain access to contact institutions.  

However the power of what is possible online has dramatically changed that perception – locally and internationally – and all distance institutions are reporting a massive surge in registrations from school leavers and other non-traditional distance students.   

Historically, distance education had a reputation of isolation and drop out; of failure and stress and of being a very difficult thing for anyone without superhuman self-discipline to tackle, so it was not an attractive option and not suitable for most school leavers. But that is no longer the case, as when done right there is no more distance in distance – just a great deal of flexibility and self-paced learning without any of the isolation.

By paying close attention to how people learn, modern distance learning can in fact be significantly more effective than the old crowded lecture room model. That is because distance students can learn by pacing themselves and checking their own progress on the way while getting help when needed; they can develop critical work skills such as the use of online resources and communication and collaboration tools; they can build networks with other students across the world and graduate with a degree that has given them both knowledge and confidence.

Back in the day, distance institutions sent learning materials to students by snail mail and received assignments back in the same way. Later, e-mail was used and content was merely dumped in a digital repository for students to access.  

But over the last decade, the convergence of social media tools and interactional technology like blogs, wikis and discussion forums have been used to enrich static presentation of material online, which has turned the modern distance experience into one in which all the interactional possibilities of the web and associated technology are leveraged to engage, support and monitor students and to connect them to each other.

The result of this harnessing of tech in distance learning is that students are increasingly not seeing the option as a last resort but, just as many students are increasingly electing to go the private higher education route instead of enrolling at public universities, so students are actively choosing distance learning because of the associated benefits.

However prospective students should interrogate the quality of the institution and course on offer just as they would with any contact institution.

Questions to ask before signing up include the obvious ones about registration and accreditation, but also questions about the support structures in place for students who are struggling or not keeping up. If the answers you get are vague or complicated, this should be a clear signal not to enrol. If the institution isn’t able to make a connection with you in the initial stages, they are very unlikely to do so when you need them further down the line.

Peter Kriel is the General Manager and Rebecca Shimmin is the Senior Operations Coordinator at The Independent Institute of Education.

5 office trends to watch for in 2017

The workplace is changing rapidly with major economic and business themes over the past year having been focused on the war for talent, creating a more satisfactory employment experience for workers as well as adapting to changing demands of new technology and new generations of workers, like millennials, entering the workplace.

In line with these changes, five major office design trends have been identified.

1. Being much closer to mother nature

Bringing the outdoors inside is an office design trend that won’t be going anywhere soon and its one that coincides with productive well-being. With office workers spending around eight hours a day inside, we can see the benefits of bringing more natural elements into the workplace. Living walls for example create an element of nature that also helps with air purity, and perhaps even lunch, if you incorporate plants for eating such as lettuces.

2. Time to collaborate better and faster

When it comes to collaboration and team meetings, diversity is key … not just among the company, but among the collaborative furniture options available. If you have small meetings of two to six people, you can easily implement an acoustic furniture pod in the middle of your open office. Many commercial workspaces are finding a way to blend acoustic seating and collaborative furniture while simulating the relaxed atmosphere of an employee lounge. This encourages people to get away from the formal conference table in favour of comfortable chairs and intimate surroundings.

3. Integrated technology

Workspaces that integrate with technology is a logical design trend that is on the rise. We can expect to see wireless charging of devices become commonplace soon. And they are likely to be embraced quickly in the workplace if Apple supports the feature on the next iPhone which many analysts are expecting.
Office furniture with built in power adapters and multimedia capabilities will be seen in well designed and flexible work environments this year. It also helps offices to ‘future proof’ because technology use will only increase in the years ahead.

4. Future-proof design

Part of designing flexible layouts is the need for furniture that will adapt to new and changing requirements. Modular soft seating, modular workbenches, desk pods, meet point tables, collaborative and breakout furniture, and acoustic elements – are examples of smart office furniture choices to support a well designed, high functioning and adaptable workplace that will move efficiently into the future.

5. Design for productive well being

Productive well-being is an aspect of workplace design that has been heavily embraced by architects and designers of late. With the health and well-being of employees being central to design, we see a positive impact on health, happiness, and productivity in the workplace. And with this comes less staff turnover and decreased employee costs overall. Things like sit-stand desks areas for both collaboration and privacy, comfort, airflow, lighting, indoor plant life, accommodating healthy lifestyle options like starting later in the day or gym memberships – all increase the productive well-being of your staff.
Linda Trim is the Director at Giant Leap.

What is the prescription of Arbitration Awards?

The issue of whether arbitration awards prescribe after the three-year lapse, has been considered in numerous conflicting judgments of the Labour Court.

On 15 December 2016, the Constitutional Court clarified the position in the case of Myathaza v Johannesburg Metropolitan Bus Services Limited t/a Metrobus and others. The Constitutional Court was tasked with considering whether an arbitration award issued in terms of the Labour Relations Act 66 of 1995 (LRA) had prescribed in terms of the Prescription Act on the expiry of three years from the date on which the award was issued. More specifically, whether the Prescription Act applies to matters governed by the LRA, and if so, whether an arbitration award constitutes a debt as envisaged in the Prescription Act.

In this case, the employee was dismissed and after referring an unfair dismissal dispute to the bargaining council was awarded reinstatement and back pay. The employer then decided to take the arbitration award on review to the Labour Court. Almost four years later, and while the review application was still to be heard by the Labour Court, the employee applied to have the arbitration award made an order of court (which, in terms of previous decisions, interrupted prescription). The employer opposed the employee’s application on the basis that the review was still pending and in any event the arbitration award had prescribed after the three-year lapse from the date it was issued. Both the Labour Court and the Labour Appeal Court agreed with the employer and held that the arbitration award had prescribed.

The judges of the Constitutional Court were divided in their reasons as set out in three separate judgements, but ultimately came to the same conclusion that the Prescription Act does not apply to arbitration awards.

The reasons as set out in the first judgement were as follows:
• an arbitration award is an outcome in terms of which the claim (dispute) is finally settled between the parties, whereas the purpose of the Prescription Act is to extinguish the right to enforce a claim that is yet to be determined by a court;
• an award issued at the conclusion of an arbitration represents the resolution of a dispute in that it defines the parties’ rights and obligations in the same way a court order would. In this regard section 143 of the LRA states that an arbitration award is final and binding and it may be enforced as if it were an order of the Labour Court in respect of which a writ has been issued;
• the Prescription Act doesn’t cater for the situation whether a claim or dispute has been adjudicated and a binding outcome has been reached but that outcome has not yet been made an order of court;

The three year period provided for in the Prescription Act is meant for claims or disputes which are yet to be determined where evidence and witnesses may be lost if there is a lengthy delay.

The first judgment also held that prescription cannot run from the date the award is published because section 145 of the LRA affords a party to challenge the award on review within six weeks. Further, an award made in terms of the LRA constituted administrative action and applying the Prescription Act would defeat the purpose of the LRA, which is to provide expeditious finality in resolving labour disputes. The application of the Prescription Act to arbitration awards would also mean that a party who has failed to challenge the award may invoke the Prescription Act to avoid its obligations in terms of the award.

The second judgment commenced its reasoning stating that “manifest injustice of depriving the applicant of the arbitration award in his favour by first avoiding its implementation by way of instituting review proceedings and then crying prescription on the back of the time wasted by the review can be met by application of the principle that prescription should not run until court proceedings are finalised.”

The reasons set out in the second judgment were as follows:
• instituting proceedings in the CCMA (or a bargaining council) amounts to the commencement of proceedings which interrupts the running of prescription under the Prescription Act;
• a review in the Labour Court fulfils the same role in finalising the court proceedings as an appeal does in cases from the Labour Court. Until the review is finalised the applicant’s claim cannot prescribe.

The third judgment agreed, albeit for different reasons, that arbitration awards do not prescribe for purposes of the Prescription Act.

The decision of the Constitutional Court in effect means that a certified arbitration award is final and binding on the parties and this means that it cannot prescribe.

Deirdre Venter is a Partner at Webber Wentzel.

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