AA has become ay yai yai

By Ivan Israelstam, chief executive of Labour Law Management Consulting

The Employment Equity Act (EEA) is the key driving force for advancing affirmative action (AA). Many years after its promulgation, it is time that the efficacy of the corrective strategy is reviewed.

There is no doubt that many thousands of black people have been appointed into senior positions in business, government and at the workplaces of other employers. Does this mean that the AA and BEE strategies are effective? If the goal is merely to put black faces into key positions regardless of the effect on the efficiency of the enterprise then the AA/BEE strategy has been a resounding success. However, if the goal is to right the wrongs of the past while retaining organisational effectiveness then the picture does not look so rosy.

As a labour relations consultant I constantly receive the following complaints:

· Black employees at lower levels gripe about the fact that the employer spends huge amounts of money hiring in qualified black executives from outside instead of spending the money on developing its existing black employees

· White employees complain that they are being replaced or supervised by black employees, many of whom have lesser qualifications and lower competence levels than they do

· Employers complain that too many of their key black employees are either incompetent, demand excessive remuneration or leave the employer after working for only a short time.

The Star newspaper published a statement by Tito Mboweni, a former Minister of Finance in which he made a similar complaint (Star 7 October 2006 page 2). Tito Mboweni was the Minister of Labour at the time that AA was legislated under the EE Act. He is reported to have said: “I have sought to recruit many competent black people, and no sooner have we trained them that they leave. I get so upset…… I am stopping this recruitment of black people. I am OK with my Afrikaners. They stay and do the work, and become experts”

According to this report Mr Mboweni gave the example of the recruitment of the first black woman as head of financial markets who, “… within six months had packed her bags and left”. The same Star article reports the comment of Moeletsi Mbeki (brother of President Mbeki) as follows: “The governor is a casualty of

black economic empowerment”, and “.. so the few people qualified in that scarcity command a massive salary premium”.

In my view Tito Mboweni and many other SA employers are not simply victims of black economic empowerment or affirmative action. Rather, they are victims of Affirmative Auction, a monster which has evolved as a consequence of an incorrectly conceived corrective strategy. The scarcity of skills amongst black people was caused by the old apartheid government that purposely suppressed the right of black people to develop skills.

The solution to this problem needs to be to give the broad community of black people the necessary skills before legislating that they must be appointed into key positions. Failure to do this, on the one hand, creates an urgent and gigantic need to place black people in key posts, but on the other hand, creates a massive shortage of needed skills relative to the demand. It also results in Affirmative Auction, the monster attacking Tito Mboweni, where the few black people with skills are ‘auctioned’ to the highest bidder and therefore hop from job to job each time the bid is raised.

Thus, the Skills Development Act should have been implemented and allowed to complete its task before the EEA was promulgated so as to grow the skills pool first and avoid a skills shortage. Also, the skills development system itself requires a review. It should be made much very much easier for employers to reclaim skills development grants and for training organisations to become accredited. Also, the outcomes based education system should be simplified and the unit standards system on which the accreditation of training courses relies should be scrapped. The system is far too sophisticated and bureaucratic rendering it cumbersome and slow.

In this way the needed skills will be created quickly and will thus be able to keep up with the demand.

Employers are notified that the Minister will soon have the power to force employers in certain industries to adhere to AA targets set by the Minister. This will exacerbate affirmative auction and increase the headache of employers that need continuity in key posts.

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