Not only is human capital the most difficult form of capital to secure, but it is also the most crucial factor for business success. It defines and influences who joins, stays or leaves; and why workforce demographics, global talent trends, HIV/Aids impacts and labour law legislations force companies to be more strategic and analytical about recruiting, engaging, deploying and retaining talent.

To meet set goals and strategies that deliver consistently, companies need to determine how much and where to invest, getting the right balance of reward, cost and mix in ways that create the most positive impact on employee performance.

According to certain survey reports, skilled labour and skilled middle management are in short supply, and on the regulatory front, legislation such as the Broad-Based Black Economic Empowerment (BBBEE) Codes and the National Credit Act make finding the right talent all the more challenging.

Despite a shortage of skills being regarded as a constraint to businesses being successful, only 1% of survey respondents indicated they are driven by a strategy aimed at human resources. Fifty-three percent of respondents indicated that their staff turnover was between 1% and 10%, and the majority only spend 1% to 5% of their annual turnover on staff training and development, albeit the incentives instituted by the government for training staff.

Adding to these basic challenges, according to the Technical Assistance Guidelines from the Department of Labour and the International Labour Organization, HIV/Aids has increased the burden of ill-health and mortality in the 15-to-50-year age group by two- to threefold. Therefore, an average of 15 years of working life will be lost per employee due to HIV/Aids. The costs of lost time have been consistently shown to have the most considerable impact.

Each HIV infection is likely to cost the organisation between one and six times the employee’s annual salary, and productivity growth may be cut by as much as 50%.

In order to decide which strategic options to pursue, organisations would need to know the vulnerability of their workforce with regard to HIV/Aids impact on productivity and profitability. An effective HIV management policy and strategy, and utilising available HIV/Aids workplace programmes will equip organisations to minimise business risks and effectively manage the future of the company and that of its employees.

This strategy should include implementing a proper and updated BBBEE policy, which is not necessarily only about black ownership.

The broad-based scorecard, which allows flexibility to score points in areas such as employment equity, skills development, procurement, enterprise development and corporate social investment, makes it possible for traditional white-owned companies to have a better status than some black-owned companies.

Most companies are still finding their feet in terms of the administrative requirements relating to the BBBEE scorecard.

While these requirements can be quite tedious, adequate planning and the formulation of an appropriate strategy can ensure BBBEE targets are achieved in a reasonable time frame.

An acceptable scorecard will ensure: being part of a transforming and vibrant growing economy, thereby escalating profits; lower tax rates due to increased black participation; greater efficiency and competitiveness, increased productivity, improved customer relationships; and increased investment by foreign investors.

The essence of BBBEE is in how it spreads the benefits of economic growth to the majority, thus making the economy sustainable, empowering black people by means of more interventions than merely selling shares to black investors. The majority is not only comprised of people wanting to own shares in companies, but also those only interested in getting good jobs (employment equity), improving their skills (skills development), starting and running their own businesses (enterprise development) and simply living a better life.

At the end of last year, South African President Jacob Zuma formed the BEE Advisory Council, led by Trade and Industry Minister Rob Davies. The Council is to assist the country in achieving meaningful economic transformation, and is tasked with advising the government on BEE, draft Codes of Good Practice and transformation charters, and reviewing progress in achieving empowerment.

The Council is further required to facilitate partnerships between the organs of state and the private sector, which would advance the objectives of the BBBEE Council Act.

The bulk of the outlined work will be performed through subcommittees that will be supported by the secretariat of the Council based at the Department of Trade and Industry. The subcommittees would meet more frequently and take their proposals to the Council, which will meet four times a year for decision-making.

At the inaugural meeting of the Council, Deputy President Kgalema Motlanthe said that the speed of economic transformation had been too slow.

Business Unity of South Africa (Busa) feels BEE needs to speed up, but it is happy with the work that President Zuma has done so far.

The importance of BEE is underlined by research that showed the poor representation of blacks in the senior and middle management of companies. A survey commissioned by Busa revealed that blacks and women continue to be grossly under represented in all directorships and top executive leadership positions of companies listed on the Johannesburg Securities Exchange.

Furthermore, there are 40 million black people in South Africa who are supposed to benefit from BEE, but most of them will not, as most do not work for companies that have to comply with the Codes, or are underemployed.

Sandile Zungu, executive chairperson of Zungu Investments Company and member of the BEE Advisory Council, says that South African corporates are unpatriotic because they are not prepared to implement BEE in a meaningful way.

He urged corporates to move away from a position of minimalist compliance to implementing BBBEE that actually makes a difference in the lives of the poor and the marginalised.

One of the challenges on which the Council would need to advise is the abuse of the empowerment process through practices such as fronting. It would need to look at the alignment of the government’s preferential procurement policy with BEE, and identify weaknesses in verification and accreditation procedures.

The survival of South African organisations will depend on good market planning, proper human capital investments, appropriate HIV/Aids policies and updated BBBEE strategies to address the impact of the changing market environment.

Rizel Delano