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TFG HUMAN RESOURCES DIVISION
It is a strategic objective of TFG to have world-class human resources (HR) capability expressed through well-developed HR solutions and the delivery of high-quality HR consulting services throughout the organisation. The effective management of HR issues in alignment with the group’s strategic agenda has a material bearing on the group’s capacity to create and sustain value.
The HR division has wide-ranging functions in the group, ranging from defining, propagating, and maintaining the ethical values of the group, to maintaining the integrity of employee data and ensuring the rigorous management of the group’s payroll for its more than 15 600 employees.
It is the HR division’s explicit purpose to live the group’s values and mission in all it delivers. These values, namely Professionalism, Resilience, Integrity, Dignity and Respect, Empowerment and Excellent Service, guide everything the division does from policywriting to employee well-being.
In order to achieve its objectives, the HR division has been structured into focused group roles known as "Centres of Expertise", as well as operational HR roles as follows:
Centres of Expertise provide group-wide as well as company-specific expert guidance in the areas of:- central resourcing and the provision of psychometric assessments;
- talent management, performance management and talent planning;
- talent development;
- employment equity, transformation and employee relations;
- organisational development, structure management and change management;
- employee reward and benefits;
- payroll and policy development;
- corporate social investment, employee wellness, and sustainability; and
- HR information management and systems.
In addition, each business unit in the group has dedicated operational HR professionals who deliver on company-specific as well as group HR strategies, and who provide day-to-day operational HR assistance and guidance to their business units. Company-specific HR is represented on all management teams across all business units in the group.
Company-based HR teams ensure that the implementation of the group’s employment policies and standards are adhered to throughout all the business units of the group in South Africa and in other countries where it trades. They are focused on promoting high standards of customer service and delivery, with the ability to tailor their input because of their intimate knowledge of the business units in which they work. HR delivery is sufficiently versatile to adapt to geographic differences, for instance the particular circumstances and characteristics across African territories that could affect HR practices.
Close liaison and co-ordination is ensured between group HR and company-specific HR through regular group-wide HR meetings and through dotted-line reporting lines into group HR executive managers.
One of the division’s priority functions is to devise and implement policies to develop and retain key staff members at all levels in the executive ranks of the group.
Another priority is to promote transformation in the racial composition of the workforce in order to reach long-term statutory targets. In the senior grades, this requires the early identification, development and retention of talented individuals.
A review of the group’s employment equity performance is provided in the Transformation Report which appears within the Governance Profile section of this report.
It is also essential to have appropriately skilled and trained staff in the stores of all the chains making up the trading divisions of the group. This allows the group to provide the highest possible standards of customer service, which means that there will be not only satisfied customers but efficient businesses in the group. Hence much effort is devoted to in-store training and the selection and development of future store managers.
The group is developing a new store intranet-based information portal to facilitate direct communication of key information and metrics between store management, field management and head office. The portal can be effectively used for the education of store management and provides a means to enable it to focus its efforts on achieving key operational metrics.
WORKFORCE PROFILE
The total staff complement of the group at the year-end is set out in the table below.| Employee statistics | ||
| 2011 | 2010 | |
| Permanent employees | 11 289 | 10 821 |
| Flexitime employees | 3 632 | 3 233 |
| Contract employees | 741 | 550 |
| 15 661 | 14 604 | |
| Casual employees | 202 | 182 |
| 15 863 | 14 786 |
During the year the group increased its permanent and flexible staff complement, driven in the main by store expansion and business demands for flexibility. Various forms of flexible staffing arrangements are used to facilitate these business requirements.
The proportion of women in the group’s workforce remains consistent, at approximately 76%. The workforce has a relatively young age profile, with 84% being under the age of 40 years and the average age being 27 years.
STAFF TURNOVER
The total staff turnover for the group was 30%. This represents a decrease from 33% in the previous year and the division aims to reduce it further.
Using company-wide engagement surveys, the division has gathered sufficient data to understand the factors responsible for staff turnover and steps are being taken to lessen its incidence and to reduce the ill-effects of the departure of talented individuals. A number of staff retention tools will be used, including incentivisation, flexible work practices, improved remuneration and enhanced talent development opportunities. Improving the attractiveness of their jobs to them is a key task of the HR division in its relationships with employees.
GROUP CORPORATE IDENTITY AND VALUES
During the year the group embarked on a launch of the new TFG logo and an associated education process. This involved extensive internal communication and training of 3 100 employees across the country. Employees received training in understanding and adopting the group’s values, mission and code of behaviours. These behaviours exemplify the group and are expected to govern all employee conduct in the workplace. The acronym PRIDE2 was used to assist in memorising and understanding the values and behaviours. Readers are referred to the section "Introducing TFG" for further details.
EMPLOYEE ENGAGEMENT
TFG’s culture is based on the principles of participation and teamwork, and a strong emphasis is placed on internal development, skills development and teamwork across boundaries. A positive corporate culture translates directly into a positive customer experience and is therefore fundamental to achieving bottom-line success.
It goes without saying that employees will be more engaged in their work and in furthering the aims of the organisation when they are working in an environment that illustrates a number of "engagement drivers" which have been internationally researched and documented. With this in mind, TFG conducted its first group-wide employee engagement survey in order to measure employees’ perceptions of the factors which contribute directly to levels of employee engagement and commitment. The survey was conducted electronically using an international survey company and results were compared against international benchmarks.
TFG enjoyed a 50% response rate (7 400 staff members) from across the group. The results reflected a 70% positive response against a global benchmark of 71,5%. Empowerment (81% positive response), commitment (74%) and performance management (72%) fared particularly well and are indicative of the group’s prevailing corporate culture. Reward (52%) fared worst and is an area that is receiving attention in the current year, and will continue to be a priority focus for the division. Other topics that have been highlighted for particular attention as a result of the survey include leadership and work-life balance.
The division plans to repeat the engagement survey exercise during the next year. It is anticipated that the follow-up survey will reflect a significant increase in levels of employee engagement in response to the internal branding initiative which has been aimed at fostering a greater commitment to the group values.
EMPLOYEE RELATIONS
Particular attention was given in the past year to ensuring that the group’s employee relations policies and procedures are aligned to the legislation that forms part of the labour relations framework. As part of this process, additional training was conducted relating to the management of workplace conflict and associated disciplinary procedures and remedies. The objective was to ensure that all persons who are responsible for managing staff are competent and equipped to handle all transgressions that might occur in the workplace and the related disciplinary measures. A total of 700 line managers, mainly in the group’s stores, were trained in these interventions.
Initiatives of this kind directly influence the number of referrals received from the Commission for Conciliation, Mediation and Arbitration (CCMA). Workplace disputes and referrals received during 2010 totalled 182 and of this number only 77 were arbitrations. Of the arbitrations, 64 were successfully concluded (a 90% success rate). The conciliation phase yielded a 59% settlement rate.
The officially recognised trade union in South Africa, SACCAWU, lodged a collective bargaining dispute against several retailers including TFG. As yet, this matter remains unresolved. Arising from this dispute, SACCAWU embarked on a national strike in late November 2010. It had negligible impact on productivity and staff attendance within TFG.
Within TFG’s workforce, 8% of employees are unionised, a figure unchanged from the previous year. The bargaining unit comprises 11 041 employees, amounting to approximately 70% of the total workforce.
EMPLOYEE BENEFITS
TFG offers an extensive spectrum of employee benefit schemes totalling more than 80. Most of these are made available only to the group’s full-time employees as they entail longer-term commitments and processes that are only appropriate for full-time permanent employees. The group strives continuously to improve, enhance or enlarge this offering.
A summary follows of some of the key initiatives.
Medical Aid
TFG Medical Aid Scheme is an inhouse subsidised medical scheme designed to best suit the needs of most employees. Membership of a medical scheme is voluntary except for employees at a grade where they qualify for a car allowance. The scheme has approximately 2 800 principal members but covers approximately 5 900 lives as members’ dependants are entitled to benefits.
The scheme is administered by the Metropolitan Health Group and is fully compliant with the Medical Schemes Act. The board of trustees of the scheme is responsible for all aspects of its operations, which are reviewed by both the TFG medical aid audit committee and external auditors.
The accumulated funds ratio of the scheme at 31 December 2010 was 50,29% which is well in excess of the officially required minimum of 25%, but not excessive for a small inhouse scheme that will be subject to greater volatility than the norm as a result of sporadic large claims.
The high claims experience of the scheme necessitated average increases of 14,8% and 14,5% respectively for the two benefit plans available for 2011, compared to 19,5% and 15% for the previous year.
Employees based in Namibia may elect to join a medical scheme that is similarly funded by the group.
All permanent staff of the RCS Group are required to become members of a medical plan of their choice offered by Discovery Health.
Retirement fund
All permanent staff of the group’s wholly-owned subsidiaries are required to join TFG Retirement Fund. Despite the volatility of financial markets the fund achieved an overall performance return of 13,2% during its financial year. The total market value of the assets of the fund at 31 March 2011 was R2,98 billion, which is R0,28 billion higher than the figure for the previous year.
Pensioners were awarded an increase of 6,5% effective from 1 January 2011, which is in line with the pensioner increase policy of the fund to award at least inflationary increases, subject to affordability.
Apart from retirement benefits, the following are provided by the fund:- A funeral benefit of R10 000 on the death of the principal member or her/his spouse and a lesser benefit on the death of a dependent child.
- A death benefit of four times annual salary as well as the member’s gross equishare is made available to provide benefits to dependants and beneficiaries in the event of death in service. Where the death is accidental, a further benefit of twice annual salary is payable.
- In cases of disablement, an insured disability benefit is provided to qualifying staff members, equating to 75% of pensionable salary earned at the time of becoming disabled. This is payable until attainment of normal retirement age (subject to continued disablement), after which the normal retirement benefit becomes effective.
Employees of RCS Group are not members of TFG’s Retirement Fund but receive comparable benefits from the Liberty Life Provident Fund.
Where required, employees of subsidiaries trading outside South Africa belong to umbrella funds that comply with the legislation of the relevant country.
Educational Assistance
To assist employees with tertiary education costs for their children on an annual basis, TFG offers a low-interest educational loan which is payable over a two-year period.
Sponsorship
Employees of TFG who wish to further their education in a field that relates to their career may apply for the benefit of sponsorship which amounts effectively to the refunding of certain levels of educational costs. Once sponsored on this basis, employees are required to achieve the relevant qualification in order to qualify for a full refund. Currently 849 of those employees receiving sponsorship are previously disadvantaged individuals, representing 85,6% of the total number sponsored.
The group also offers sponsorship of a one-year intensive retail diploma which is provided by UNISA. Sponsorship amounting to R165 000 was provided during the review period for this purpose.
OCCUPATIONAL HEALTH AND SAFETY
The group is committed to ensuring a safe and healthy environment for all its employees and customers. It complies with all relevant legislation, one of the chief items of which is the Occupational Health and Safety (OHS) Act of 1993. To ensure optimum management of occupational health the group utilises the services of an external service provider.
This service provider runs full-time as well as satellite clinics on the head office campus of the group. Occupational as well as primary health care services are offered free of charge to employees. In addition, psycho-social support is offered to all employees via a helpline, as well as limited face-to-face counselling. This service will be extended in the next year.
Extended time off from work as a result of injury or ill health is minimised through a case management programme, and disability insurance in the form of an income replacement benefit is available to all permanently-employed staff in South Africa.
The group’s OHS performance remained consistent with that of previous years. The majority of incidents reported were minor and there were no fatalities.
The statistics for reported incidents involving staff members of the group in the past year are as follows:| Occupational injuries and diseases | Three days or fewer |
Four days or more |
Total |
| Number of days lost | 178 | 1 093 | 1 271 |
| Number of incidents | 312 | 96 | 408 |
| Average cost per incident | R195 | R1 019 | R1 214 |
| Total cost | R60 799 | R97 842 | R158 641 |
MANAGING HIV/AIDS
The group’s approach to managing the impact of HIV on its employees is firstly to encourage all employees to undergo regular HIV tests so that they can establish what their HIV status is. HIV testing is available free of charge to all employees, as is a comprehensive HIV disease management programme for all employees who are HIV+. A comprehensive HIV policy is in place.
Free and confidential HIV testing is outsourced, as is the disease management programme. Testing is available by appointment during working hours at the group’s clinics as well as on-site on each Health Day and World Aids Day. In addition, TFG collaborates with five other large national retailers in a programme which brings HIV testing to employees working in stores in shopping centres.
In the year under review, a total of 345 of the group’s employees volunteered to take an HIV test through one of the facilities offered. Of these, 22 tested HIV-positive.
The number of employees enrolled in the company’s disease management programme increased by 79% from 43 to 77. Currently there are 54 on the programme to receive ARV treatment and a further 24 employees are receiving treatment from the public health service.
According to annual risk assessments commissioned by the group from Health Monitor Company, the HIV-positive prevalence rate within the group is estimated to be in the region of 6% to 7%. The direct measurable annual cost to the group as a result of HIV infection in its South African operations is currently R437 251, which represents a 38% increase on the last year’s corresponding figure of R317 103. An increase of this order was to be expected in view of the increase in the number of participants in the disease management programme.
PROMOTING EMPLOYEE WELL-BEING
In addition to ensuring health and safety in the workplace and promoting personal growth through skills development, the group offers a wide range of benefits and services aimed at promoting the general well-being of the workforce. Some have been summarised in an earlier section of this report.
A formal employee assistance policy is in place and a variety of "wellness initiatives" are undertaken for employees throughout the year.
Employees are encouraged to make use of a company helpline for general counselling and specialist needs are outsourced to external providers. All cases are actively followed up to ensure successful resolution. Face-to-face counselling is available on a limited basis by appointment. The helpline also co-ordinates support to stores that have been the site of armed robberies. Trauma counselling services and ongoing telephonic support are part of this service.
Three blood donor clinics were hosted, and one "wellness event" was held at the head office and another at the regional office in Isando. The group also held three "Retailers Uniting Against HIV AIDS" events as on-site HIV testing campaigns for store employees in shopping malls.
Free eye testing services were provided at the group’s head office over a three-week period and also at the regional office in Isando.
This year the division facilitated a retirement planning workshop for employees in and around Cape Town who are close to retirement age. This one-day event, held in alternate years, aims to raise levels of awareness and understanding of the need to prepare financially for the future and to manage finances accordingly.
RESOURCING
In the past year 695 permanent and 230 short-term contract placements were made in the head office and field operations, inclusive of call centre agent placements. The corresponding figures for the previous year were 426 permanent and 440 short-term placements. A further 3 405 staff members were employed in stores. A total of 4 330 appointments were therefore made. Of those hired externally, 84% were equity candidates, compared to 72% last year.
The database of CVs posted on the group’s e-recruitment website increased during the year from 32 000 to 48 500.
TFG continues to explore new avenues to increase the pool of applicants, particularly in areas of scarce skills and equity candidates. Use is being made of international websites, social networking sites and job boards. The division is also in contact with a number of international recruitment agencies and receives from them CVs of expatriates who wish to return to South Africa.
The biggest requirement for head office staffing continues to come from the group’s call centres. Their needs stem from expansion in this area of the business as well as the relatively high staff turnover which is inherent in call centre operations. In the past year 392 call centre agents were recruited, which is a figure similar to that for the previous year. Of these, 91 positions are attributable to expansion of the call centres. Active measures have been put in place to minimise staff turnover in this area, including alignment of salaries, implementation of performance management processes and obtaining the active participation of staff members in employee forums to shape their working environment. The positive effect of these initiatives is being experienced through lower levels of staff turnover in the business units in which they are employed.
Graduate recruitment was again successful with 53 placements being made, of which 45% were for trainee buyer and trainee planner positions. Graduate recruitment is a critical talent pipeline for management levels across the group and is a key driver of employment equity. Of the candidates hired 67% were equity placements and 36% of the graduates placed were recruited from within the group, thus providing valuable internal career development opportunities. Relationships with key tertiary institutions have continued to be a focus and our brand awareness has been enhanced by career fairs, presence on campuses and contact with faculties. This focus has been successful, as recognised by SAGRA (South African Graduate Recruiters' Association) in their independent research reports.
A critical focus in the future will be the resourcing of store manager roles, focusing both on speed and quality of the appointments in this area.
TALENT MANAGEMENT
The ongoing management of talent remains a key priority. There is intense competition for talent in the retail industry and it is critical to match supply with demand. Staff members must furthermore be motivated in their roles and the business must be able to assess their performance accurately. Performance management systems are therefore of the utmost importance.
Against this background, talent reviews are made twice annually and appropriate retention and development strategies are initiated.
The division continues to monitor trends in employee departures to enable the group to react proactively to any identified risks to staff retention.
TFG’s total expenditure on talent development was R100,8 million for the year under review, representing an increase of 14% on the figure of R88,4 million in the previous year.
The tables below detail the training statistics for the year.
Trainee development programme
This is a structured programme available to new and young talent in the group. It comprises technical and generic measures to build the capacity of trainees in the areas of buying, design, pattern-making, merchandise planning, logistics, financial services, marketing, area management and human resources. The programme is supported by individual technical coaching. The trainees enjoy a high level of exposure to and interaction with senior management throughout this programme.
Merchant academy
The curriculum for this institution offers existing merchants various technical programmes designed to support the building of their technical competencies. The subjects covered include merchandise planning, range building, shipping, logistics, the retail cycle, retail mathematics, fabrics and product knowledge, garment construction and costing,world-class manufacturing, and supply chain. The curriculum is based on an integrated approach, yet allowing flexibility for customisation across the divisions. The programme harnesses the existing talent within the group by using subject-matter experts who are also trained as in-house facilitators, so encouraging multi-skilling and the use of best practices by all merchants.
Retail Managers' Development Programme
This is a specifically tailored transformational programme available to the group’s high-potential black talent. It focuses on the leadership competencies required to assist participants to make a smooth transition to the next leadership level in the organisation. It combines generic leadership development, facilitated discussions on topical issues, exposure to senior business leaders and technical development.
The group’s leadership development training is based on the leadership pipeline model and is supplemented by assessment and coaching.
| % change | 2011 | 2010 | |
| Total number of employees trained# | (1,1%) | 129 733 | 131 166 |
| Total number of black employees trained# | (0,6%) | 112 708 | 113 373 |
| Total number of black female employees trained# | (13,0%) | 94 189 | 108 309 |
| Overall cost of training (Rm) | 14,0% | 100,8 | 88,4 |
| Total number of black employees trained |
Total number of black female employees trained |
Total number of black employees trained |
Total number of black female employees trained |
|
| 2011 | 2011 | 2010 | 2010 | |
| Number of employees who attended workshops# | 9 452 | 6 019 | 8 168 | 5 094 |
| Number of employees who attended EMT* sessions# | 103 256 | 88 170 | 105 205 | 103 215 |
| Total trained | 112 708 | 94 189 | 113 373 | 108 308 |
| * Early morning training in stores | ||||
| # Refers to attendees and not individual employees |
Growing Black Talent
The following programmes were initiated to grow and support our black talent in the group:- Retail managers’ development programme (RMDP): In all, 18 black area managers and senior area managers participated. There are 14 black buyers and planners on the current programme.
- Accelerated retail development programme (ARDP): A total of 55 African store managers undertook this programme.
- Field Academy: A total of 104 area and senior area managers participated, of whom 54 were African employees who received a full field curriculum.
- Graduate programme: A total of 53 graduates were appointed in the past year, the retention rate being high at 80%.
Stores Optimisation
The division has again given high priority to the development of the group’s store, area and divisional managers in the technical sphere, as well as in leadership and management competencies.
The following will be focused upon in the future:- New methods of communicating to stores will be piloted, including the use of DVD technology and voice-over-powerpoint.
- Developing technology solutions for stores, such as scanners, store manager dashboards and area manager toolkits.
- Improving PC literacy in both stores and field management requires strengthened training (including the use of tools such as Outlook, dashboards and scanners).
- “One port of call approach" i.e. technology access through dashboards, portals and similar tools, also requires training.
During the year the division attended to the training of 2 042 store managers in ten training locations and introduced 22 long-distance training programmes.
