16 November 2001
Best Companies To Work For
THE WINNERS
ALE TO THE CHIEF!
Breweries is SA's best employer
Cheers, my brew! SA Breweries is SA's best employer. SAB staff, who receive an annual beer allowance of up to 20 cases, should ask for an extra six-pack this week to toast their company's success in topping the 2001 Best Companies To Work For ranking. Rand Merchant Bank, which came top in last year's inaugural event, is second. US-owned pharmaceuticals company Eli Lilly retains third place.
Best Companies is a joint venture between the FM and Deloitte & Touche's Human Capital Corp.
What makes SAB special? The company has been benchmarking itself against international best practices for years. Norman Smith, the Human Capital director who manages Best Companies, says: "SAB sets a target to be the best brewer in the world, then goes about trying to make it happen. It recognises it can do that only by having the best people."
Norman Smith
He adds: "SAB is a learning organisation. It is willing to take advice but doesn't act on it regardless. There is a healthy arrogance at SAB. It knows what it wants and weighs up advice ."
Major brewers against which SAB tests its human resources practices are Heineken and Anheuser Busch. As HR director Johann Nel explains, the company also benchmarks against two US-based organisations, the American Society for Training & Development and the Society for Human Resource Management. SAB is one of only a handful of companies to be adjudged "exemplary practice partners" for employment practices, talent development and acquisition.
This year, financial services companies occupy eight of the Top 10 places. Add Standard Corporate & Merchant Bank , in 11th, and it's nine out of 11. The outsiders are SAB and Eli Lilly.
Smith has a theory about why financial services companies do so well. "They must ensure their employees deliver quality service. They deal direct with customers and recognise that employee satisfaction leads to customer satisfaction. Industrial companies, particularly manufacturers, rely on the product and concentrate on that. There is less emphasis on people."
Best Companies judge Terry Meyer, of Wits Business School, adds that industry finds it harder to attract new talent, particularly MBA graduates. "MBAs have a natural attraction to knowledge-based organisations. Industrial companies face a greater challenge to get them."
The nature of manufacturing in SA can also be a hurdle. Companies with high numbers of unionised shop-floor workers have to work harder to build a relationship with their total work force than those employing only professional and clerical staff.
That may become easier if the SA labour movement can shed its traditional role as a political battering-ram. Companies say there are signs of a better relationship with workers. As the "revolution" generation of workers start to retire, they are being replaced by younger, better-educated people more interested in personal advancement than political battles.
Management must also change. In many companies, management and labour still see each other as enemies rather than partners. "Where there is a lack of trust, it's impossible to have a productive relationship," says Prof Shirley Zinn, also a Best Companies judge.
Shirley Zinn
The transformation needs to be actively pursued. Two of the success stories this year are Sans Fibres and Metrorail. Last year they were ranked second- and third-last respectively out of 42. This year they have shot up the rankings. Sans is ranked in the top half of the 79 companies that took part, and State-owned Metrorail is close behind.
What made the difference? They entered last year's event to find out what they were doing wrong. Instead of being disappointed by his company's ranking, Sans CEO Thys Loubser told a staff meeting : "I am excited by these results because they show where we are and what we have to do to improve them."
Metrorail has since gone to tender, looking for consultants, mainly on people issues. Says Smith: "Management recognition of these issues means there has been a better feeling in the company. They have been paying more attention to managing performance."
If other industrial companies can make similar commitments, says Smith, their human resources performance will also improve. SAB has shown what can be achieved. Others have also moved up the rankings. Fortune magazine's ranking of America's Top 100 employers (see below) shows there's no reason industry can't enjoy successful employee relations.
In SA, however, the transition makes issues more complicated. Taxes, levies and legislation affecting labour relations and employment equity take up an inordinate amount of time.
Zinn says: "Companies in SA are sidetracked. Global companies are more focused. There's so much going on here, so many tunes we have to dance to. It's difficult. You are not keeping your eye on key indicators. It's difficult to be globally competitive if you have to keep looking internally."
Another Best Companies judge, Prof Alf Bennett, head of Rand Afrikaans University's Masters of Commerce Business Management, agrees: "There are a lot of issues that divert our attention, like poverty and job creation. There is a tendency for government to extend its scope to business activities where it should not be involved."
SAB has proved such obstacles can be overcome. And the fact that the number of entries for The Best Companies To Work For has nearly doubled indicates companies are serious about human resources issues.
International experience shows a direct correlation between profitability and being a good employer. Keen, motivated employees translate into profit. Many companies consider staff turnover an occupational hazard. But the cost of replacing and retraining can run into millions of rand each year. More important, employee satisfaction usually means customer satisfaction.
But what creates satisfaction? Based on findings from last year's Best Companies To Work For, pay is only part of it. Says Smith: "It appears that though the remuneration package is important to employees, factors like relationships, job satisfaction, trust and good leadership are high on their lists. The areas that employees perceive as important are the way change is managed and implemented, as well as the effect on employees and their future prospects in the company. Training and personal development is also high on the list of prospective applicants and employees, as well as internal communications systems."
Corporate culture is vital . For instance, four of this year's Top 10 - RMB, Momentum, Discovery and Wesbank - are part of the FirstRand group. Executives at all four say their performance is a reflection of the principles of FirstRand's Laurie Dippenaar and Paul Harris.
"The commitment of leadership to the process is vital," says Meyer. "Top companies have that commitment and it creates a culture. We have a long way to go in this regard. We need to be obsessed with it."
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