The cost of snubbing employment equity
Despite employment equity policies, black people are still woefully underrepresented in the top echelons of business. While the private sector blames government, one thing is clear: more needs to be done to address inequality, and fast.
thewheels of radical economic transformation are seemingly stuck in the top echelons of Corporate SA, if the latest employment equity figures are anything to go by.
I’m afraid at this rate there will be no real economic freedom in the lifetime of those so vehemently demanding it today. This would be an outcome that South Africans can ill afford in the age of popular phrases like “white monopoly capital” and “radical economic transformation”. The consequences may just be social and economic suicide – especially for the private sector.
When minister of labour Mildred Oliphant released the Commission of Employment Equity’s (CEE’s) report on employment equity earlier in May, it didn’t contain any big surprises but was heavy with threats of harsher punishment for non-adherence to employment equity policy.
The report accentuated the excruciatingly slow pace at which economic inequality in the country is being addressed – almost like trying to fill a bucket one drop of water at a time while the ranks of those thirsty for economic justice are swelling.
Like last year – and all the years preceding it – the CEOs of the country’s private companies are still predominantly white. And this will probably remain so for some time to come.
Last year, City Press calculated that top management positions will likely only reach a 50/50 split between black and white by around 2036 – almost 20 years from now. The CEE report confirms it will take some time to change the demographics. This is as concerning as it is unacceptable.
Figures in the CEE report show a meagre increase of 0.1% in African blacks in top management positions and a 0.4% drop in white representation. The latest report shows that, despite African blacks constituting around 78% of the economically active population, they represent only 14.4% of the top management in the workplace. Whites hold 68.5% of top management positions.
Statistics like these may stir up growing hostility between those who appear to enjoy the fruits of economic freedom and those who do not.
The minister was quick to point out that these statistics proved that calls for employment equity policies to be scrapped are premature. She called such calls absurd and fingered corporates for their “glaring lack of appetite for transformation”.
The ANC followed suit and so did organisations like the Black Management Forum and organised labour. These organisations are not just bemoaning the seeming lack of corporate will to transform but are also calling for harsher punitive measures against those not complying.
Oliphant made it clear that it was time to up the ante when addressing the current underrepresentation of blacks, women and the disabled in top management positions.
“This may include promulgating the ‘stick’ sections of the Employment Equity Act because, quite frankly, the ‘carrot’ sections have not delivered the desired results,” she said.
Certain opposition parties differ. DA shadow minister for labour, Ian Ollis, dismissed what he calls the hysteria around the numbers. He maintains the latest statistics highlight the government’s failure to develop a strong skills pipeline to diversify top management positions. Put differently – it is suggested that the underrepresentation of the designated groups in top management positions is the result of a skills deficit.
Yes, indeed skills are needed and more should be done by government (and the private sector) to develop a proper skills base and to invest in quality education that prepares the youth for the job market. The government is everything but blameless in how it implemented these policies thus far.
Nevertheless, it cannot be that, after 23 years of democratic rule, the skills base is still so insignificant that it has not caused a bigger shift in representation – specifically when it comes to white dominance in top management positions. In fact, the CEE report shows there are 41.5% of professional positions are occupied by black Africans, with whites filling 37.5%. But, according to the report, recruiting patterns of companies do not necessarily reflect this and continue to favour whites.
More recently flash mobs of graduates popped up all over the country as part of the #hireagraduate movement. The message was clear – many graduates, despite their qualifications, are still unemployed. One need only look at the news headlines to see that those without jobs – especially young people – are becoming increasingly impatient with the status quo.
Statistics like those in the CEE report then become convenient ammunition when open season is declared on Corporate SA. There are calls for legislative amendments allowing for sanctions against companies not complying, prohibiting such companies from doing business with government. Such sanctions will pale in comparison to the possible backlash from broader society when perceptions of a corporate sector seemingly unwilling to transform are exploited through political grandstanding.
The costs of this may far outweigh the costs of whatever excuse may be proffered to exonerate corporates for not fully adhering to policies aimed at levelling the economic playing field.
Corporate SA should and can play a bigger part in addressing inequality in an increasingly hostile and volatile society of have-nots.
“This may include promulgating the ‘stick’ sections of the Employment Equity Act because, quite frankly, the ‘carrot’ sections have not delivered the desired results.”
Mildred Oliphant Minister of labour