Bee: Helping or Hurting?. Anthea Jeffery
said in his budget speech in February 2013: ‘Too many people have a stake in keeping the system the way that it is.’99
Implementation in the private sector
In 1998, when the Employment Equity Bill was before Parliament, the Institute of Race Relations questioned the various assumptions on which it was based. The Bill assumed that demographic representivity was the norm, and so required that this target be attained. It further presumed that the key problem to be addressed was a racist refusal by the private sector to appoint black people at senior levels, when the real difficulty was the huge skills deficit within the country. There was thus no need for legislation to force whites to hire blacks. The key need was rather to increase black skills and foster rapid rates of economic growth. The faster the economy grew, the more demand there would be for skilled people of all colours – and the more quickly any remaining racist prejudice or practice would be eroded.100
In the parliamentary debate on the measure, the Department of Labour sought to downplay the significance of the skills shortage. However, it also inserted a key clause into the Bill that put the onus on enforcement agencies to take into account the size of ‘the pool of suitably qualified [black] people’ from which the employer might reasonably be expected to promote or appoint. Mboweni also assured companies that they would not be expected to ‘grab a hobo off the streets’ and make him a director. Though firms would have to make ‘reasonable’ progress towards the state’s goal of demographic representivity, they would have some discretion in setting their own racial targets along the way, provided they did so in consultation with trade unions and employees.101
However, with the coming into force of the government’s black economic empowerment (BEE) codes in 2008, this flexibility was much reduced (see Chapter 5). Instead of allowing businesses to choose their own racial targets, the BEE generic codes put pressure on firms to increase black representation to 60% at senior management level, 75% at middle management level, and 80% among junior managers. However, given the age and skills profile of the predominantly African population (as earlier described), a 60% target for black representation at senior management is not easy to attain. In addition, many of the available skills have already been absorbed into the public service, where black representation among ‘all government’ employers generally stands at more than 80% at senior levels.102
Black representation in management
Despite these constraints, the most recent (14th) report of the Commission for Employment Equity shows significant black representation at all management levels among private sector employers. In 2013/14, black South Africans thus made up 21% of top managers and 32% of senior managers. In addition, black representation stood at 49% at the professionally skilled level and at 70% among skilled employees.103 These figures point to a major effort on the part of business to implement affirmative action despite the obstacles impeding this.
The Commission’s statistics are broadly similar to the figures compiled by a private human resources agency, P-E Corporate Services, which monitors affirmative action at some 850 parastatal and private sector firms cumulatively employing more than 1 million people. Reports by this agency show that the proportion of black people at senior management level has risen from 5% in 1994 to 33% in 2013, an increase of some 550%. Among middle managers, black representation has gone up from 7% in 1994 to 33% in 2013, a rise of some 380%. At junior management level, the proportion of black South Africans has virtually doubled from 26% in 1994 to 48% in 2013.104
The data compiled by P-E Corporate Services also shows that black penetration into management jobs has slowed significantly since 2010. This, the consultancy says, is because of severe skills shortages at these senior levels. So acute is the skills deficit that some 40% of employers offer premiums (of between 10% and 20% above established pay scales) to attract and retain black managers. In addition, many firms (57% in 2013) have experienced the ‘poaching’ of their black professionals. This is not surprising given that figures compiled by Adcorp, a private employment agency, put the number of skilled positions that could not be filled because of the skills deficit at close on 830 000 in March 2014.105
Accusations against private employers
While P-E Corporate Services has long identified the skills deficit as a key obstacle to the implementation of affirmative action, the Commission for Employment Equity seems to deny that the skills shortage even exists. In 2007, for instance, the then chairman of the commission, Jimmy Manyi (who was simultaneously president of a BEE lobby group, the Black Management Forum), dismissed the skills shortage among black South Africans as nothing but ‘an urban legend’. The challenge facing South Africa was not a shortage of such skills but rather the persistent under-utilisation of skilled black people by white-controlled businesses, he said. Manyi also questioned whether existing penalties for non-compliance with the Employment Equity Act were strong enough, saying a fine of up to 10% of annual turnover might be more appropriate to counter white racism.106
In August 2011 the commission’s then chairman, Mpho Nkeli, took a similar approach. Overlooking the limited number of black South Africans with the age profile, qualifications, and experience normally required for management jobs, she focused on the extent of white ‘over-representation’ in top jobs. Whites still comprised 76% of top management in private firms, which was ‘nearly six times’ their 12% share of the economically active population. At this rate, it would take 127 years for top management to become demographically representative, she charged. Nkeli blamed ‘the poor overall picture’ on ‘deep-seated racism in the business community’. The skills shortage might be true in some instances, but in general it was being used ‘as a blanket excuse’ by recalcitrant employers, she said.107
Taking its cue from Nkeli, the Black Management Forum asserted that ‘companies were not taking transformation seriously’. Oliphant added that ‘the snail’s pace’ of transformation was the result of ‘pure resistance by the captains of industries’, which meant that ‘drastic’ measures would have to be taken. Cosatu said that ‘apartheid still lived in the economy’, and that ‘it was a national disgrace’ that so little had been achieved.108
Few voices were raised in defence of business. Even a business representative on the commission agreed that corporate performance was ‘very bad’. An editorial in Business Day said the commission’s report made for depressing reading and that business remained ‘woefully dominated’ by whites. The government, the editorial went on, was ‘quite right’ in saying the pace of change must quicken, even though there were potential risks in using the legislative hammer to force change. Shareholders should thus take the issue much more seriously and ‘demand that companies adopt practical measures to speed up transformation’. If shareholders failed to do this, then the government would take the lead and ‘justifiably’ so, the newspaper said.109
When the Commission for Employment Equity’s 13th report came out in March 2013, the organisation’s then chairman, Loyiso Mbabane, said ‘the data trend’ showed little improvement in black representation. Hence, though some critics were urging a ‘sunset clause’ for affirmative action – which would see the policy phased out over time – Mbabane insisted that ‘the data cried out for a “sunrise clause” instead’. The minister of labour commented that ‘whites still dominated in leadership and managerial posts’ while black South Africans were ‘still being relegated to low-level jobs’, which was putting pressure on the government to intervene. ‘Do not force us to come up with legislation that will force you to comply with our equity laws,’ she warned. An editorial in The New Age, a newspaper widely seen as endorsing government views, added: ‘It is clear the softly-softly approach by the authorities in the implementation of employment equity has not worked … A government big stick approach is the only solution.’110
The commission’s 14th report elicited similar criticisms from Mbabane, who said that ‘transforming the [private sector] workplace was like “climbing a mountain that grows taller as you climb it”’. Oliphant lashed out at people who used skills shortages as an excuse, saying it was ‘unfair discrimination practices in the workplace that led to under-utilisation of the greater proportion of the productive population. It might be expressed in clever words like “lack of experience” … but in the end those at the coalface felt the racism and exclusion.’
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