Retailers score on employment equity

Where is the low-hanging fruit? Where is the most value to be had? What does the business need?

As a sector that employs roughly 20% of the country's workforce, it seems appropriate that three of the top five employment equity performers in this year's Most Empowered Companies survey are major retail chains (Spar, Shoprite and Woolworths). Their varying performance on the management and skills development measures, however, is an indication of the difficulty in trying to balance the needs for transformation with business realities.

Despite scoring more than 12 points in the employment equity measure, Spar, Shoprite and Woolworths occupy rather modest positions in the overall rankings. Spar tops the employment equity measure, but is propping up the overall table in 100th position, whereas Shoprite and Woolworths are 77th and 78th respectively in the overall rankings. The unique challenges of this sector, from the business growth and transformation points of view, are highlighted by the wholesale and retail sector education and training authority's 2012 report.

It showed that the retail workforce has shrunk from a high of 27% of the total workforce in 2007 to about 20% today. The industry training body said the sector is regarded as one of the least transformed in terms of black staff at senior management level, estimated only to be 22%.

"There is a noticeable increase in demand for black staff by major retail companies trying to remedy their skewed employment ratios," the authority says in its 2016 Sector Skills Plan.

This employment trend will have significant skills implications. The growth in demand for managers and service or sales employees is in keeping with international labour market trends in the wholesale and retail sector. Given the introduction of technology, work in this sector is becoming more knowledge-intensive, with a hollowing out of unskilled labour.

"There are a number of new trends emerging in the sector that are leading to the demand for new skills sets. These include online retailing, new product markets, ethical sourcing and retailing, [the] increasing complexity of business and [the need for] supply chain efficiencies."

Given its calculation that 54% of employees in the retail sector do not have a matric qualification and only 7% have a degree or higher qualification, this has clear skills development implications for the sector.

The industry training body's 2009 research report on the sector's skills needs concluded that there was a direct relationship between skills training and employment equity targets. It reported that, as companies struggle to manage transformation within the stipulated timeframes, targets might not necessarily be met.

This position is likely to be exacerbated as the need for unskilled and low-skill workers diminishes.

"The sector has been characterised by a shift towards technological solutions in response to both manpower constraints and the need for greater efficiencies, with concomitant implications for skills development.

"With the technological advancements, competitive pressures and faster innovation cycles prevalent in the sector, there is clearly a need to increase the flow of employees into skilled occupations. The high proportion of unskilled employees in the sector puts it at a competitive disadvantage."

This challenge has been addressed through various in-house talent management and skills development programmes aimed at accelerating this process. Given the generally higher ranking on the core workforce (rather than executive management and ownership), it is clear what the retailers consider to be the low-hanging fruit.

Although this article has been made possible by the Mail & Guardian's advertisers, content and photographs were sourced independently by the M&G supplements editorial team. It forms part of a larger M&G Most Empowered Companies supplement.

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