JOHANNESBURG, South Africa – 11 November 2022 – Business Unity South Africa (BUSA), the Korea Chamber of Commerce and Industry (KCCI) and the Embassy of the Republic of Korea jointly hosted the Business Forum and Nuclear Cooperation Seminar at the Sandton Convention Centre, Johannesburg.

The session, which was attended by a high-level delegation including government and business leaders from both South Africa and South Korea, was to explore opportunities and possible collaborations in areas such as the Fourth Industrial Revolution (4IR), Nuclear and Hydrogen Energy.

The hosting of the seminar comes as the Republic of South Africa and the Republic of Korea are set to mark the 30^th anniversary of diplomatic relations on December 1, 2022. South Africa is South Korea’s biggest trade partner in Africa and South Korea is the fourth biggest trade partner for South Africa in Asia. Over the last three decades, the two countries have made significant strides in diverse fields including political, economic and cultural areas. Furthermore, exchanges of top level visits as well as bilateral cooperation have increased between the two countries, including more recently in nuclear and agricultural sectors.

While exploring potential ways of mutually beneficial relations and areas to be further expanded between the two countries, an acknowledgement was made regarding the successes made to date, particularly of Korean companies in South Africa. Samsung, being one of them, is in a prime position to make a meaningful contribution specifically in 4IR as a business that wants to use technology to create a better global society.

“The contribution that we, as a South African corporate citizen, are making towards the economy of the country is something we are immensely proud of and that we wish to continue for many years to come. We look forward to using our products and services to help the country make its own mark in the technology-driven industrial revolution,” said Hlubi Shivanda, Samsung’s Director: Business Operations and Innovation & Corporate Affairs.

The South Korean Ambassador, His Excellency Chull-joo Park and KCCI’s Executive Vice Chairman, Mr. Taehee Woo used the occasion to implore BUSA and the South African government to support South Korea’s bid to host the World Expo in Busan in 2030. They both pointed out that South Africa, as a partner, is key in providing support for the expo.

In his keynote address, the Department of Trade, Industry and Competition’s Deputy Director-General, Mr. Yunus Hoosen, gave tribute to South Korean companies like Samsung for their investment and their success in South Africa. He further called for other Korean companies to emulate the likes of Samsung by establishing operations in South Africa and said there is visible evidence through Samsung ‘s presence in the country that it is an investment destination of choice.

Inflation is on almost everyone’s mind right now. Around the globe, the supply chain issues caused by the COVID-19 pandemic have been compounded by the war in Ukraine and tight labour markets in some countries. South Africa is no exception. In July, the country’s inflation rate hit a 13-year high of 7.8%, before softening to 7.5% in September. 

Both businesses and their customers are being adversely affected by this inflation. Since operating expenses have increased for businesses, they are compelled to raise the price of their products and services or suffer severe revenue losses. But doing so also entails running the risk of losing clients who will either completely forego a purchase or hunt for a less expensive substitute.

In that kind of environment, great customer experience is no longer just a competitive differentiator for businesses but a matter of survival. In fact, research shows that as inflation rises, companies can expect to see an inflated demand for great customer experiences. So, far from cutting back on investments in customer experience to reduce price increases, companies should ensure that it remains a major focus.  

CX goes beyond being just a competitive advantage

Of course, CX has long been a critical differentiator. According to 2021 research by Gartner, 89% of companies primarily compete on customer experience. That’s significantly higher than the two-thirds which did so in 2018. Moreover, another study shows that as many as 80% of customers have switched brands after a bad experience.

That means, in a world that provides customers limitless options even amidst high inflation, the experience an organisation provides doesn’t just have to be better than that of its competitors. It also has to be good enough to convince a customer that they still want to buy from the organisation and nurture a long-standing relationship, despite having to cut back on goods and services elsewhere.

What makes for an exceptional CX?

The first thing to remember is that customer experience isn’t just about what customers go through when they’re browsing a certain website and then paying for a good or service. It instead encompasses the totality of their experience with a company. That ranges from marketing to the shopping experience itself, billing, and after-sales service. And for those experiences to be consistently exceptional, they have to be personalised, meaningful, timely, and engaging. A good CX tool will, for instance, ensure that a customer interaction is timely by either alerting a CX-facing team or by being context-aware enough to understand when a customer will be interested to make another future purchase and establish contact with them.

Unified customer profiles that transcend internal divisions can enhance CX

To achieve experiences of superior quality, organisations need to ensure that all internal divisions have a wholly consolidated view of customers and their respective preferences. Building that consolidated view means breaking down silos within the organisation to ensure that everyone has access to the same customer data (handled securely and ethically, of course). For instance, an integrated business process suite can guarantee total integration between a company’s customer relationship management, marketing, and sales initiatives, and its commerce. It will also bring data together in such a way that the CX team has the full context of a customer’s interactions with the company, allowing them to deliver interactions that are personalised to each customer and which are meaningful to them. That context will also show what kinds of messaging the customer responds positively to, ensuring that each engagement is as engaging as possible.

Having that data also allows the organisation to ensure that each customer interaction is exceptional. Perhaps even more importantly, it allows the organisation to consistently learn and adapt, further improving the overall customer experience.

Waiting won’t help

While governments and central banks around the world are doing everything in their power to bring inflation under control, organisations simply cannot afford to wait and hope. It will leave them vulnerable to losing customers and ultimately put their survival at risk. Hold-ups in the supply chain or conflicts between nation states cannot be controlled, but what businesses can control is the experience they provide their customers. And if they use the tools at their disposal to ensure that their customers have the best experience possible, they put themselves in a much better position to survive and thrive in the future.

Government wants public service wage bill curtailed as unions threaten indefinite strike

The failure of government and organised labour to resolve the current impasse on the ongoing salary negotiations has caused uncertainty and sparked fears in the country, particularly as unions threaten to down tools.

Providing frontline services

Firstly, the unions involved in the dispute represent employees who provide basic frontline activities, and the withdrawal of their labour would disrupt vital services ranging from border control and policing to health to revenue collection, among others.

Secondly, economists warn that the country cannot afford another strike action after the recent Transnet one, which nearly crippled the country’s logistics. This was in addition to other recent calamities such the social unrest in KwaZulu-Natal (KZN) and Gauteng as well as the devastating floods that hit KZN and some parts of the Eastern Cape.

Deterioration of GDP growth

The unions accuse government of negotiating in bad faith and undermining labour bargaining processes. Similarly, government laments labour’s lack of appreciation of the magnitude of the fiscal challenges it faces, chief of which is deterioration in GDP growth. “The higher than expected global inflation could also lead to higher global interest rates, affecting debt service costs and the exchange rate,” said government, adding, “the public sector wage bill is under severe pressure due to the general constraints faced by the South African economy.”

Disrupting fiscal outlook

Furthermore, government pointed out that the public sector “wage bill has grown faster than economic growth over many years” and that it cannot afford the level of wage hikes the public service unions are demanding. It said this would dramatically disrupt the fiscal outlook, thereby compromising government’s efforts to deliver public services.

“Such high-cost demands would further frustrate the government’s efforts to continue working on a sustainable long term approach to social protection consistent with government’s broad development mandate and the need to ensure affordability,” said the government.

Q&A for DPSA

The Mail & Guardian sent 10 questions to the department of Public Service and Administration (DPSA)’s chief negotiator, Mompati Galorale, to provide perspective and context of government’s position related to the protracted salary negotiations.

Can you please give us a brief background of when salary negotiations between government and organised labour started?

Negotiations commenced in April 2022 with a pre-negotiations session, in which government presented the country’s economic outlook, fiscal framework and planning cycle.

The re-alignment of the negotiations relate to the government’s planning cycle. To this effect a timetable to guide the process was agreed upon. Negotiations  for the financial year 2022/23 should have concluded at the end June 2022 so that the outcomes thereof could be incorporated into the October 2022 Medium Term Budget Policy Statement (MTBPS). This would have also allowed the negotiations for the financial year 2023/24 to commence immediately, such that the outcomes thereof could be incorporated into the 2023/24 final budget.

During the pre-negotiations process, government indicated that the gap between revenue and expenditure continues to widen, with expenditure growing faster than revenue. Debt-service-costs also continue to rise, crowding out spending on essential public services and as a  result, public spending is on an unsustainable path.

In your view, what led to the current impasse between the parties involved?

The party positions were too far apart to begin with. Government derives revenue from taxes and the tax base has been seriously eroded by the sluggish and shrinking economy, worsened by the Covid-19 pandemic. The total cost of the labour demands is R147 billion, with the 10% cost-of-living adjustment demand alone needing R50 billion.

The employer indicated that an amount of R147 billion, which is the total cost of  labour’s demands, is not affordable and would disrupt the fiscal policy, thereby compromising the government’s efforts to deliver services.

Such high-cost demands would further frustrate the government’s efforts to continue working on a sustainable long-term approach to social protection consistent with its broad development mandate and the need to ensure affordability.

It was because of the above factors that the employer proposed that the employees continue to be paid a non-pensionable cash allowance, which is an average of 4.5% of the 20 billion allocated in the 2022/23 compensation budget, plus a 3% pensionable increase for the 2022/23 financial year, which equates to a 7.5% adjustment.

Organised labour accuses you of reneging on the three-year wage deal you made in 2018, thereby compromising the integrity of collective bargaining; what is your response?

It was the Public Servants Association (PSA) that hurried out of the engagements at the Public Service Co-ordinating Bargaining Council (PSCBC), where the employer tabled a request for a review and took the matter to the labour court. It became apparent that the government would not sustain two parallel processes, one in the labour court, and another in the bargaining council. After the PSA took the matter to court, government as a respondent was then forced to file its papers in response to the PSA’s application.

Related to the above, labour also claims that it is unconscionable for DPSA to refuse their salary increase while President Cyril Ramaphosa has recently accepted recommendations of the Independent Commission for the Remuneration of Public Office-Bearers to increase politician’s salaries by 3%. What is your take on this?

The current offer far surpasses what public office bearers received, in that the offer is made of two components, which are the 4.5% non-pensionable cash allowance and a 3% pensionable increase, constituting on average a 7.5% increase in salaries. In addition to this increase, there is also a 1.5% pay progression for qualifying employees, meaning for many public servants the total adjustment for this year could be 9% (3%+1.5%=4.5% pensionable increase plus 4.5% non-pensionable cash allowance).

Government has unilaterally forged ahead and tabled a final offer of 7.5%; doesn’t this lend credence to labour’s accusation that you ride roughshod over the principles of collective bargaining?

No. Having considered the risks of public servants not receiving any salary increase for the 2022/23 financial year, if no agreement was reached on time before the minister of finance tabled the 2022 MTBPS, government took a decision in the interest of the public servants to implement its final offer.

Can you please break down or explain what your revised offer entails?

There is no revised offer. The final offer remains as explained above.

DPSA stressed the need for organised labour to align salary negotiations with treasury’s budgeting process; why is this necessary?

It is necessary for purposes of incorporating the outcomes of negotiations into the final budget. This will avoid negotiating after the effect, when the budget has already been appropriated.

In real terms, how much would organised labour’s salary increase cost the national fiscus?

Their 10% demand would have cost the fiscus R50 billion for the financial year 2022/23. The 3% pensionable increase amounts to R13.4 billion, which is an additional amount to the R20.5 billion which was originally in the budget to cover the 4.5% non-pensionable allowance for the 2022/23 financial year.

You claim to have shared with labour the country’s fragile economic situation, but labour did not share this perspective. Why do you think they insist on getting their demand met regardless? 

Despite government having shared openly with labour the country’s fiscal position as outlined above, they still chose to stick to their demands.

Are you optimistic that the parties will finally reach a settlement, and why?

Government remains optimistic, hence the call for labour to come back to the table to commence negotiations for the 2023/24 financial year. — Thabo Mohlala

Only qualified, competent people are assigned to positions of responsibility, thanks to the National Framework towards Professionalization of the Public Sector.

In South Africa, widespread protests against the delivery of services are now commonplace and frequently accompanied by violence and reckless property destruction. From August 2020 to the end of January 2021, the Incident Registration Information System of the South African Police Services recorded about 1000 protest actions nationwide.

A close analysis of the protests shows that their root cause is the inability of local authorities to provide reliable and quality basic services such as water, electricity, safety and security and road maintenance. Experts attribute this to a struggling public service sector that is not fit-for-purpose and unqualified, incompetent and corrupt civil servants.

Professionalising the public service sector

To buck this trend, the sixth administration under President Cyril Ramaphosa has adopted a new policy framework to re-calibrate the current public service machinery. The National Framework towards Professionalisation of the Public Sector emphasises that only qualified and competent individuals will be appointed into positions of authority. They must internalise, embody and promote the values and ethos of the constitution, Batho Pele and the Public Service Charter. Cabinet approved the framework on 19 October 2020, paving the way for nationwide structured public consultations.

Acting Minister of Public Service and Administration Thulas Nxesi spoke to the Mail & Guardian to highlight some of the salient elements of the document. These range from conditions of employment for directors-general (DGs), DDGs, and heads of department (HoDs), pre-entry, recruitment and selection to integrity assessment and continual learning professional development.

He said the framework aims to achieve the following goals:

The tightening of pre-entry requirements as well as effective recruitment and selection processes that inform meritocratic appointments across all levels.

Undertaking workplace orientation and induction programmes that are linked to on-boarding and mainstreamed as an intervention for organisational development.

Effective HR planning, performance management and appraisal systems, including performance standards and assessment instruments for different categories of employees. Performance management can also be aligned with professional body/association registration.

Public servants return to the simulator by undertaking continuous learning and professional development. This will include public sector officials being encouraged to register with professional councils, starting with specific categories of occupations in the public sector.

Managing the career progression and career incidents of public servants and heads of department respectively.

In one of his recent weekly letters, President Cyril Ramaphosa echoed Nxesi’s sentiments about the significance of professionalising the public service. He said it is only a capable, efficient, ethical and development-oriented state that can deliver on the commitment to improve the lives of the people of this country.

“This means that the public service must be staffed by men and women who are professional, skilled, selfless and honest. They must be committed to upholding the values of the constitution, and must [do so], as I said in my inaugural speech,” said Ramaphosa.

Depoliticising public service

The current configuration of the public service does not protect the tenure of senior management such as DGs, DDGs and HoDs.  Senior managers are changed or replaced each time a new minister is appointed, creating chaos and administrative turmoil. What the new framework seeks to achieve is to adopt a non-partisan approach that will depoliticise these positions. The bureaucracy will remain loyal and diligent in implementing the political mandate of the voters, and managers will be insulated from politics and political parties.

Nxesi said the cabinet decided that the DG in the presidency will be designated as the head of public administration (Hopa). “In the provinces, this function will be designated to the directors-general in the office of the premier. The Hopa will assist the president and premiers in the management of career incidents of HoDs, and also serve as a mediation mechanism in order to stabilise the political-administration interface. This is part of overall efforts to improve the retention of HODs and create stability at the HOD level, with the objective of improving the capacity of government to deliver on public goods and services, as mandated by citizens,” he said.

Tightening pre-entry requirements

Another key aspect of the framework relates to the requirements for individuals to be appointed into the public service sector. Appointments will be based primarily on merit and requisite technical expertise. Nxesi said the Nyukela, the existing pre-entry to senior management course, will be revised and extended to employees in the defence services, state security, police and correctional services, local government and to prospective boards of state-owned enterprises (SOEs). Staff appointed into political offices, including advisors, must also complete the Nyukela, pre-entry competency and integrity assessments within 60 days of appointment into office. He said the pilot has been successful, with full compliance in national and provincial departments, and, subject to finalising the arrangements with SALGA and the Legislative Sector, the pre-entry course will be extended to them.

Tightening competency assessments tests

Nxesi said integrity assessment will become mandatory in the public sector and occupation-based competency assessments and pre-service entry exams for entry into the public sector will be tightened up. He said this will include the review of the middle management service and senior management service competency frameworks, so that they sufficiently reflect political and economic competencies, including competency attributes for a developmental state. The current pre-employment competency assessment will also be reviewed to include occupation-specific assessment to determine the technical challenge competencies of shortlisted candidates, added Nxesi.

Orientation programmes

All serving public servants must undertake compulsory participation in public sector re-orientation programmes. This must take place simultaneously with the induction into Public Sector and Workplace Orientation. In terms of the new professionalisation framework, participation in induction programmes will be introduced before one assumes duty. These will include employees in local government, boards of SOEs, the defence, state security, police and correctional services. In addition, officials employed to support the institution of traditional leadership, staff appointed into political offices and special advisors must also take part in induction programmes upon their appointment.

Planning and managing performance

Performance management, planning and appraisal systems as well as performance standards and assessment instruments for various categories of employees are key elements of the professionalisation framework and will receive priority. According to Nxesi, they “are working towards aligning performance management with professional body or association registration. It is important for the state to ensure greater alignment across the public sector and to optimise the nexus between planning and performance management”.

Normalising continual learning and professional development

Mainstreaming continual learning and ensuring public servants receive regular professional development is vital in helping to build state capacity. The National School of Government will be charged to determine appropriate training and learning pathways to assist in the professionalisation of employees. This will include the launch of the executive education portfolio of programmes to support the professionalisation of the executives within institutions. “We are going to professionalise various categories of public servants, which include specialist, technical and administrative employees,” said Nxesi, adding that employees in these specialised areas will be professionalised and gain certification with statutory professional bodies or non-statutory professional bodies.

Progressing careers of public servants

Career progression of public servants, in accordance with the national policy for an integrated development system for South Africa, will be introduced so that the public sector remains an employer of choice.

De-linking the tenure of office to politics

To ensure there is stability and continuity of administration, the tenure of municipal managers will be de-linked from a political term.  Nxesi said COGTA will facilitate the transitional measures towards the employment contracts of 10 years for municipal managers and their deputies to be adopted by SALGA. This will be subjected to a rigorous process for recruitment, selection, training and development, performance management and reviews, and consequence management for non-compliance or non-performance.

Driving economic growth through SOEs

SOEs are the key to delivering the country’s economic growth and social transformation. They provide vital infrastructure and services such as electricity generation, commuter transport, water provision, freight logistics or telecommunications. The formation of these enterprises was informed by the need to deliver basic needs for all South Africans, particularly the poor and vulnerable. Therefore, they must be overhauled to effectively drive economic growth and transformation. To achieve these objectives, care should be taken to ensure they appoint ethical and professional board members who are not susceptible to corruption or manipulation.  — Thabo Mohlala