It's time to think about having more employees that manage their function as if it were a business.
According the Quarterly Labour Force Survey (QLFS) released by Statistics South Africa (Stats SA), South Africa’s unemployment rate increased by 0.1 of a percentage point to 29.1 percent in the third quarter of 2019, making this the highest unemployment rate since Stats SA started measuring unemployment using the QLFS in 2008. The unemployment rate remained unchanged in the fourth quarter but, with further retrenchments by large blue-chip companies and parastatals in progress, corporate South Africa has no choice but to take a long, hard look at whether their approach to transformation and their efforts are enough to claw the South African economy out of the gutter are working.
Many South African companies are being forced to cut costs, in some instances, as far as cutting headcount, down to the bare minimum, for long-term survival.
The days of placing hundreds of learners on learnerships to complete the most basic and generic qualifications, only to be absorbed into yet another learnership, are gone.The intent of the B-BBEE Act is not to create professional students, but to rather empower disadvantaged individuals with the skills that they require, to become income-generating and economically active citizens of South Africa.
Theoretically, this can be achieved as follows: an organisation can identify a group of disadvantaged South Africans and provide them with education and security (food, housing, water & electricity) until these individuals reach an age where they are able to enter into the economically active economy. These individuals would ideally become economically active by means of gaining employment within the organisation, or alternatively, becoming part of the organisation’s supply chain.
In both instances, the organisation would continue to support and uplift the individuals by means of education, mentorship and coaching as well as resources they may require. In exchange for this, the individual would render services as either an employee or a supplier.
We are all very familiar with the first instance where organisations have taken the responsibility to educate unemployed South Africans by placing them on learnerships, apprenticeships or internships, however, this very rarely results in any form of long.-term employment regardless of the fact that organisations have been incentivised to do so via the B-BBEE scorecard. The reality is simply that organisations are struggling to yield a return that would sustain their current headcount, let alone a 5 percent increase on that headcount year-on-year.
Better to create intrapreneurs
Perhaps it is time to transform as many of our learners as possible into the employers of tomorrow. Granted, not everyone is born to be an entrepreneur but given our current economic climate, I don’t think we have any other choice? At the very least, we can condition these learners to become Intrapreneurs, a term used to describe an employee that has the ability to manage his or her own function as if it were a business within a business i.e. taking full responsibility and accountability within his or her own function. South Africans have proven time and time again to be resilient and resourceful. Why not harness that survival skill into something scalable so that this will create employment opportunities for others? It is one thing to equip an individual with a skill set that will allow them to sustain themselves but it is completely another to equip an individual with the basic entrepreneurial skills that would encourage a “Growth” mindset and delivery, that would enable them to sustain a few or even many.
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Students of TVET colleges invariably end up self-employed. However, these individuals very rarely grow past one or two employees and more often than not, run the risk of being closed down within the first 24 months due to non-compliance with regulating bodies.
These individuals lack the knowledge on how to register their own business nor do they understand and comply with general business compliance and safety requirements. They also struggle with identifying and pitching prospective clients, pricing their product or service properly and understanding that business is about providing value to clients, even when they are difficult to please.
If corporate South Africa focuses on upskilling these individuals to provide them with the ability to convert to small enterprises post their qualification, by placing them into incubators where a “business in a box” is supplied to these entrepreneurs in a safe environment.
Where these individuals have access to experts that mentor them through every step in the process, to teach them how to register their businesses and meet the requirements as set out by SARS, empower them to growth their client base and manage their employees, South Africa could be one step closer to a stronger and more stable economy.
An example
Imagine Company A sponsors the incubation of 10 unemployed learners who are given a “Business in a Box”, which in this instance can be a mobile car wash. During this 12-month internship, the individual is allocated a pool of funds where the individual transacts with the franchisor to purchase the machinery and equipment (asset management) and thereafter the chemicals & consumables (stock management).
Through the incubation process, the individual will then undergo product and customer service training. Thereafter the intern begins to provide services to his or her first “client” - Company A. Company A will then receive a number of car washes to the value of the amount that was sponsored, at a rate determined by the Car Wash business’s running costs plus a small profit (financial management).
The intern would also manage his own finances under the mentorship of the incubator to understand profitability and scalability to the point where he or she can appoint his or her first employee.
During this incubation, this individual is taken through every step in the process from acquiring sponsorship to customer services, managing finances and cash flow, as well as customer concerns or complaints and how to resolve the conflict.
In the following phase of the incubation, the intern would be graduated to a microenterprise and the appointment of his or her first employee, who would also begin as an intern. The microenterprise would be empowered on how to mentor that intern as well as manage the HR function and the cycle would repeat itself until such time that that intern is ready to be graduated. At this point, there are now two micro-enterprises that have a business, that have employed an intern and been given the skill to start and manage a business as well as employ and manage and employee as well as prospect new clients/sponsors along the way.
What is in it for Company A? Well, by sponsoring the incubation, Company A receives recognition and B-BBEE points for skills and enterprise development and possibly supplier development if the intrapreneur becomes a supplier that continues to provide mobile car washes with water-efficient technologies (utilising only 10 percent of normal water consumption) at Company A’s premises after the 12-month internship. The ultimate benefit is to have succeeded in creating sustainable long-term employment for South African youth, through the collaboration of corporate South Africa and the relevant industry experts. This model is adaptable to all industries and all services and most product offerings.
