Transformation is slow and the era of self-regulation in terms of changing the face of senior and executive positions in corporate South Africa has come to an end.
The Commission of Employment Equity released its annual report on Tuesday. It shows that despite accounting for just 9% of the economically active population, white people are “overrepresented” in key positions in the workplace.
White people make up 65.5% of top management positions and 54.4% of senior management positions. This while Africans, who account for 78.8% of the economically active population, only accounted for 15.1% and 23.2% of top and senior positions respectively.
The report, which tracked transformation over the past three years, shows that the increase in representation among the African and coloured populations was “marginal”, increasing by around and below 1% respectively.
Two decades of little transformation
Minister of Labour and Employment Thulas Nxesi said the report reflected that there has been little transformation in the workplace since the Employment Equity Act was passed over 20 years ago.
The objective of the act is to eliminate unfair discrimination in the workplace based on race, gender and disability to create a labour environment where people have equal opportunities.
“This means our country is not moving with transformation … This unhealthy situation flies in the face of an inclusive economy [which is] one of the priorities of the government ,” he said.
Top management representation over the past three years
Nxesi said the lack of transformation and employment equity is something the government needs to tackle “head-on”.
The commission has put forward recommendations that it believes will assist in speeding up transformation.
“We recognise as the commission that since the inception of the [act] the law has always said that employers should set their own targets but we see that this does not bear fruit,” said commission chair Tabea Kabinde.
More stringent requirements
Kabinde said there is a need for more growth for the designated groups in the middle to upper levels of the workforce.
As an alternative to self-regulation, the department will implement sector targets that companies will have to meet. These targets will be established in consultation with the various sectors, a process the commission said is already underway.
In addition, Kabinde said Section 53 of the act, which deals with issuing employment equity compliance certificates to employers who fulfil a number of employment equity conditions, will be promulgated.
For instance, in the agricultural sector, white people make up 85.3% of top management and 62.4% of senior management. Mining and quarrying, retail and motor trade repair services, wholesale trade sector as well as manufacturing are other sectors that had between 60% and 70% white representation.
“It’s clear that we have to increase the risk of non-compliance so people know that there are consequences,” said Nxesi.
Companies who do not have a compliance certificate will not be able to do business with the government.
In addition, the certificate is also expected to make it easier for inspectors to enforce the equity regulations, where even when a company does not do business with government and is not in possession of the certificate it can be prosecuted if it cannot provide reasonable justifications for non-compliance.
Companies could be fined between 2% and 10% of their annual turnover. The department will also increase the number of inspectors where currently there is one inspector for every 20 000 workplaces.
“I believe that socially responsible corporates will welcome this,” said Nxesi. “When certain groups are underrepresented in the economy it also means that the talent and skills are underutilised.”
A look at the number of professionally qualified and technically skilled workers reveals that Africans are leading with 40.2% and 63.3% representation in each category. Women and Africans are the main beneficiaries of training and promotions at this level.
Black Management Forum president Andile Nomlala said the report was “disappointing and unacceptable” and wanted to understand why, given the significant improvement in transformation in the lower levels of management, these people were not progressing to senior and executive levels.
The act does not allow companies to dismiss employees in order to make room for people from designated groups. Instead it relies on natural attrition to create opportunities for equitable recruitment.
Kabinde said an analysis of workforce movement looking at recruitment and promotions at those occupational levels found that preference was still given to white candidates and that enforcing the certificate will change this pattern.
She added: “We do not for a minute believe that persons from designated groups are not skilled and cannot take over those roles.”