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.

Finweek English Edition - - OPINION - Edi­to­rial@fin­week.co.za Alices­tine Oc­to­ber is a par­lia­men­tary re­porter for Netwerk24.

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

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