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HR in South Africa

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Passaya Narbonne

on 21 March 2014

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Transcript of HR in South Africa

HR in South Africa
Background information
Employment practices
Emerging market that matters - FDI and economic growth

But ‘racial transformation’ is slow

Significant issue of mass unemployment and poverty

Caused by various human resource practices

How attractive is this for a UK MNC?

Pay Systems
No National Minimum Wage - ANC considering issue for 2014 election
Wage floors in different sectors
Mining: R4000 (£220) - neg. by TU
Agriculture: R2870 (£160)
Set by Minister of Labour - advice from ECC (MW-setting body)
Labor regulations: NEDLAC (government/TU/employers)
Wage setting: centralised
Industry level bargaining
Traditionally job-based (time-based) system -> person-based (skill-based) is trending
Flexible Work Practices
Flexi-time “bank” and “credit” system
Focus on "outcomes control approach" rather than "time control approach"
Temporal flexibility exists less in practice
Skill Development Act
National Qualification Framework

IR Systems: Labor Unions
History and development
Coverage: 2.5%(1975) - 25.5%(2006)
Membership concentration and opposing interests
Inefficient and rigid system

Equal opportunities for applicants
Zero tolerance for prejudice and discrimination
Background Checks
Employees rights against unfair dismissal
SA labor law changed in 2013
EPWP/ National Job Fund
Advice for a UK MNC
Race Inequality
Conclusion
Embedded apartheid labour structure
Unfair compensation systems
Racial wage gap
0.23:1
Inequality emphasis
Black Africans
80% of population
Employment
35% of black people
69% of white people
2014 Mining strikes - biggest post-Apartheid mine strike:
SA's platinum belt - almost 8 weeks
Platinum companies: revenue losses of $820m
Wage strike: Association of Mineworkers and Construction Union (AMCU)
‘White man’s economy with no benefits for poor black mineworkers’
Self-proclaimed ‘slave wages’

SA is a developing economy lagged by historical issues and weak structures
Disparity between policy and practice causing low confidence in the economy
Similarities in civil and common law easing integration
Managing inequality issues
Standardize/(localize) systems?
Corruption - UK ranked 14th/ SA 72nd (improvement from 2012)
Expat compensation: balance-sheet approach
'no real social support in South Africa' (Forbes)
Disparities in skill and education level due to weaker training and education systems
More expensive labour due to skill shortages
Selection: cross-cultural global leader
IR Systems: Collective Bargaining Systems
Idiosyncrasy: Wage Inequality
Significant wage inequality (Gini coefficient= 63.1 in 2009)
National monthly average:
R2,800 (~£157) / top 5%: R17,000 (~£955) / bottom 5%: R570 (~£32)
Gender gap: 77 %

“this is Africa...the duties and taxes are higher, transport costs are higher, and bureaucracy is stifling” (Doshi)
“nothing is ever consistent” (Aziz)
Labor Relations Act 1995
Coverage: 20.3% in 2004
Bargaining council membership doubled whilst the number of councils halved
Increasing inflexibility
Main role in improving wages and working conditions for black workers but can’t save jobs.

IR Systems: Idiosyncrasies
Employment relations: underdeveloped, highly centralised, and inflexible
Given status of significant political importance
Labour unions failed to find a single representative voice
Initiatives to improve employment relations are underdeveloped.
Lack of vocational training systems
SA employment relations is in turbulent transformation stage



Source: The Hofstede Centre (2014)
Comparison of Hofstede Score between South Africa and UK
Fairly representative of UK
But higher power distance and lower individualism
Due to history of segregation and majority of workforce with no skills.
Full transcript