How your business can boost productivity, tap into productivity schemes: Tim Modise interview

The government has announced and put in place several funds to help small and medium scale businesses survive the harsh economic crunch that the lockdown has brought on. One of these is an initiative by the Department of Labour to provide training and debt management to companies through Productivity SA, which has been given a grant of R104m to reach small and medium businesses. Broadcaster Tim Modise speaks to the CEO of Productivity SA, Mothunye Mothiba, and looks at the projects that will be running to get some of the struggling enterprises afloat again  – Bernice Maune.

Productivity in SA

Tim Modise: The South African economy is in a difficult situation at the moment, with predictions and forecasts saying that it might shrink by up to 17% for this year. But for now, the immediate forecasts are that it will decline by about 7% or so. And, of course, the impact of this is that people will be losing jobs and businesses will be closing down. And Productivity SA has stepped into the fray and has got a few ideas and schemes and projects that it is working on to support South African businesses as well as to improve productivity. So I caught up with the CEO of Productivity SA Mr Mothunye Mothiba, who is going to tell me a bit more about their partnership and support that they are receiving from the Department of Labour, as well as tell me about the decline of South Africa’s standing in the World Global Competitiveness Report. Ntate Mothiba thank you very much for joining me. Now I would like to find out from you what this R104m from the Department of Labour is going to do and what it’s all about.

MM: Thank you, Tim. And greetings to your listeners.

Productivity, say, is our forecast on two things. At one level, it’s improving the competitiveness and sustainability of enterprises, particularly small enterprises, and as you indicated in your intro, the issue of how do we really move enterprises that are in distress out of that debt challenge so that they can retain jobs.

The R104m that we were talking about today is allocated for the business turnaround and recovery program. It’s one can say, one of the offshoots of the resolutions of the Presidential Job, Summit Framework agreement of 2018. That the entity must be capacitated to ensure that we are capable of saving jobs. So we basically intervene in those enterprises that are facing the possibility of retrenching workers so that we save those jobs. And with R104m, we’re looking at supporting over 174 companies. But as part of this program, we also have to create future forums. The future forums are actually workplace collaborative teams comprising of management as well as workers.

Training to improve productivity

So that after we have intervened over a period of nine months, we will also be taking them through this program so that we train and capacitate them to be able to deal with issues of faith, operational inefficiencies once we have left. So at one level, it is the companies that we will take out of distress. But at another level, it’s also ensuring that in every company where we intervene, we leave a future forum. Another said leg of intervention to use the R104m is to come up with what you call productivity champions.

The idea is to actually put a productivity champion in the to 44 districts so that, you know, in the past, we used to have our community development workers so that this companies, they can also have somebody close by. We can assist them when they need their help. So the community development, sorry the productivity champions would actually be supported.

Now tell me, how did you go about identifying these companies that you will be providing support for?

The companies that we will be providing support to because this money comes from the Unemployment Insurance Fund. Now the Unemployment Insurance Fund allocated this money in terms of their provision and then in terms of the Section Five D of the Unemployment Insurance Amendment Act. So these companies are actually contributors to the Unemployment Insurance Fund.

The R104m that we were talking about today is allocated for the business turnaround and recovery program

To the extent that our interventions, in essence, as I said at one level, is to save jobs. But at another level, once a company is up and running, then they continue contributing to the Unemployment Insurance (Fund). So we take from the database of the Unemployment Insurance Fund, we also work with the CCMA in terms of Section 189, a lot of their Labor Relations Act.

Productivity SA – where it fits in

So our encouragement to South Africa is even before you get to that level, approach Productivity SA so that we can be able to walk the journey with you. And in this team that we’re talking about, we actually have a memorandum of agreement with the CCMA, a memorandum of agreement with the Unemployment Insurance Fund. And currently, we’re working collaboratively with a Presidential Job Summit Committee and the task team called Temporary Employer and Employee Relief Skills Task Team.

South Africa has been declining on the Global Competitiveness Report. Why is this the case?

Given that we have Productivity SA and we know that South Africa attends the World Economic Forum. Our leaders do now and again, and we take these things seriously. But in recent years, the position of South Africa has not been improving. If anything, it’s been declining what is going on there.

It’s about talk and not walk the talk. Eh, we as a country do not actually address productivity holistically at a national level, at a sector or industrial level, as well as at an enterprise level. So most of our interventions over the number of years that Productivity SA has been existing, has been at enterprise level, but equally so it is very minimal level.

Registered enterprises

I’ll give an example. We have over 2,5m registered small enterprises in this country. Seven hundred thousand of them are what you would refer to as the formal economy. Now, quite often when we talk intervening, we intervene in those, which means those 1,7m that are in the informal economy we’d leave them to chance. And unfortunately, Productivity SA the reason why we were launching this program is because two years ago we had to suspend it in 2018 because we did not have funds.

Read also: Covid-19 just makes the corruption pot bigger, activist says

Our funding has just been dismal to the extent that we could just do as little as we could. But then to come back to your issue, if you look at what happened in 2010, I think our productivity and our competitiveness was around 40 out of say 63 countries, as measured by the Institute of Management Development in 2019. We were at 56 and then we dropped to 59.

Competitiveness ranking

Tim, there are four things that we’ll look at when we look at the competitiveness ranking as well as scope The first one its government efficiency has this issue about the ease of doing business in South Africa. We’re not good at it. If you look at how long it takes to register a company and then issues of fair legislation and so on, which is not friendly to enterprises particularly emerging enterprises. So the structure of our economy, it’s a problem. The second issue, it’s what we call economic performance.

And you can see it in terms of their unemployment rate inequality rates and so on. The third issue it’s business efficiency, and that’s the space where Productivity SA and related entities that has to do with enterprise development play a space. Now, in that space, you are going to find one, productivity and efficiency, two, management practices. The relationship between management and workers, the business processes that companies have and so on. And thirdly the culture of work and fourth our labour market efficiency. Now, if we can get those four things, right, just in terms of this third pillar that I’ve mentioned, that’s why competitiveness will continue declining.

And now, given the fact that since said the pronouncement of the lockdown in March that a number of companies had to stop operations somewhere scaling down in order to just survive, it means that 2021 ranking is going to come up with if we don’t do something. Tim, I think I will send you a paper that we have put across as productivity which talks about unlocking the potential of productivity in South Africa beyond 2020, I mean, beyond Covid-19. And we’re raising a number of things.

One, looking at productivity and competitiveness as it relates to enterprises. Secondly, looking at training and development programs. Thirdly our research and development and fourth productivity culture in this country, as I indicated, unfortunately, we walk the talk. If you look at the top-performing economies, your Singapore, your Denmark, those in the Nordic economies, and in Asia, productivity ranks very high in India, in their economies and that’s what we appreciate in this sense, in this space. If Productivity SA and the latest government entities that are playing a role in the small business sector can be capacitated, we’re going to win this war.

Well, it’s very encouraging that at least we’ve got the information and we know what needs to be done. So the next thing is to get it done. Unfortunately, for several years, we’ve not really done it. So we can only hope that the disaster that’s unfolding now is the result of businesses shutting down and the economy shrinking will spur us into action and productivity SA for instance is working on a post Covid-19 recovery program. What is that going to entail? I mean, outside of the announcement of R104m that’s been given to you. What is the big picture going forward? And practically. So what are you going to do?

Our focus, as I said, it’s in two areas. At one level, it’s improving the competitiveness and sustainability of small enterprises. Now, with this program, in essence, we’re just looking at those enterprises that have survived but did not retrench workers. How do we come up with programs?

There are various programs to like what we call Kaizen which is continuous improvement. There’s a program called Score by the International Labor Organisation that does a number of programs that Productivity SA has partnered with your international labour organisation. And we are also now talking to the special economic zones because we want to intervene, particularly in those sectors, priority sectors as identified by the Department of Trade, Industry and Competition as captured in the master in the sector master plan. That’s where we want to intervene because if you ramp up the capability of those enterprises, you are able to at least create an environment for them to create jobs.

Strategic partnerships

That’s at one level. So there’s a number of strategic partners that are critical in this space, as I said. Seda it’s critical. One argument we are advancing is that government should be the first port of call for funding and we should remove this issues about, you know, red tape, produce this paper, produce that one so that as we proceed with it, ensuring that we support, particularly, as I said, over 1,7m in small enterprises in the informal economy. Surely you need to do things differently.

Read also: Pick n Pay warns 50% drop in earnings; alcohol, tobacco to blame

And then the second program is the one that we’re talking about today. Business turnaround and recovery. So that once these companies are in operation, let’s not allow them to go into decline before we intervene. So you can see the interrelatedness of the two programs once the company is on on the business turnaround and recovery program, which runs us over a period of nine months. That’s what we call aftercare then we put them on our workplace challenge program to sustain them so that they are sustainable over a period of time until they can, they can fly on their own. So this is a cycle.

All that we are wanting to do is say, let’s not allow our enterprises to suffer. And there’s a number of things that has to come in here. If you talk about the future of work. So the issue of us killing programs has to change the adoption of enterprises of technology has to be advanced. So all these things, if you talk about digitalisation of our platforms and so on and so forth, as I count two, we need to begin to look at systems holistically. And that’s why we say as a country we need to look at productivity holistically, at a national level, at a sector level, as well as enterprise level. So in that paper, those are the themes that you’re going to find.

Thank you very much for talking to me. Appreciate your time. And also sharing with me your insights and good luck on your initiatives.

We’re going to be in a long haul beyond Covid-19 and thank you team for giving us the opportunity.

Visited 118 times, 1 visit(s) today