The inability to recruit and retain previously disadvantaged professionals in a South African Steel Merchant

Abstract

The Steel Merchant offers a service of stocking and distributing steel products
 and value added services throughout Africa. The company is the largest steel
 merchant in Africa employing over 5500 employees.
 The South African government implemented the Employment Equity Act, No 55,
 (1998) and Broad-Based Black Economic Act, No 53, (2003) to readdress the
 discrimination of the past and create fair opportunities for Previously
 Disadvantaged Individuals (PDI) in the workplace.
 The Steel Merchant's business environment is severely affected by these
 legislations and is required to comply with the provisions of the Act or will receive
 fines and penalties.
 Since the Acts inception the merchant continues to struggle in recruiting and
 retaining PDIs in professionally qualified and management positions. The
 organization has experienced strategic drift by falling from a Black Economic
 Empowerment (BEE) Procurement Recognition/Status Level of 5 down to level 6.
 The research identified various factors within the organization that are hindering
 its overall ability to adapt and progress in terms of Employment Equity (EE) and
 BEE. The study is focused on identifying the internal and external barriers that
 prevent the effective implementation of BEE and EE strategies in order to recruit
 and retain previously disadvantaged professionals at the Steel Merchant.
 The Research Objectives are:
 • To evaluate the effect of organizational culture and climate on the
 implementation of Employment Equity, Affirmative Action (AA) and BEE
 Strategies 
 • To analyze the importance of Human Resource Management (HRM) in
 the development of recruitment and retention strategies of previously
 disadvantaged professionals
 • To investigate the differences in gender and race leadership qualities and
 behavior
 • To identify and assess the barriers in implementing employment equity
 recruitment and retention strategies
 • To determine how government legislation will influence the Steel
 Organizations' competitiveness internationally
 Internal secondary data was used to analyze the Merchant's Human Resource
 Management, EE and BEE performance. External secondary data from the
 South African government departments was used to analyze the legislative Acts
 and how the company performs compared to the industry standards.
 A quantitative research approach was followed in the investigation. A questionnaire was developed using closed-ended questions to obtain information related to the respondent's demographical background as well as their opinion on each objective.
 The questionnaire was distributed by email to 1 00 employees and weighted according to racial group (Black, White, Coloured and Asian) and gender (Male and Female). The method allowed the researcher to receive and analyze the
 information quickly at no financial cost. Descriptive statistics were used to interpret the results and describe the
 behaviour of each racial and gender group contained in the sample. The data methods used were:
 • Percentages
 • The mean, mode and median
 • Standard Deviation
 The conclusions from the sample were used to generalize about the steel merchant population whilst research from recognized academics was utilized to authenticate and substantiate the research findings improving the accuracy and
 reliability of the research.
 The results of the study identified the following factors have contributed to the
 merchant's inability to recruit and retain PDI at professionally qualified and
 management levels:
 • The Steel Merchant has a white male dominated organizational culture
 and ineffective HRM strategies
 • Black shareholders have contributed little towards previously disadvantaged development creating resentment by employees
 • Employment Equity, Black Economic Empowerment and Affirmative action has created racial divides, a lack of trust and will negatively influence the
 company's competitiveness internationally.
 The research identified various problems that hinder the implementation of EE
 and BEE policy at the steel merchant which makes it difficult to recruit and retain
 talented PDI. The following recommendations have been made to minimize
 resistance and integrate EE and BEE policies to improve recruitment and
 retention in the organization:
 • Define and communicate the BEE/EE vision and strategy
 • Delayer hierarchal levels
 • National Culture Training
 • Implement Performance Management Systems
 • lncentivize Knowledge Sharing
 • Re-evaluate the recruitment policies
 • Train, develop and mentor PDI
 • Develop career paths and succession plans
 • Create a leadership development program
 • Create a shared understanding of EE
 • Address white fears through empowerment
 • Black shareholders should be actively involved with the development of PO employees
 • Harness African culture to succeed internationally.
 EE and BEE is obligatory and will inevitably influence the company's
 performance. The Steel Merchant has the resources and capabilities to eliminate
 resistance and implement effective HRM strategies to recruit and retain talented
 POl in professional and management positions. By achieving this objective, the
 company's Broad Based Black Employment Equity (BBBEE) rating will advance
 resulting in a sustainable competitive advantage and more business opportunities in the future.

Graduate School of Business Leadership

M.B.A.