BY: MAMIKI MATLAWA, MD AT QUNU STAFFING SOLUTIONS
“Until companies fully embrace the societal issues and the legislation that promotes IDE, we will continue to not meet the mark.”
perating a business in the ever-evolving fourth industrial revolution, competitive advantage can often be short-lived. However, inclusivity, diversity, and equality (IDE) is a factor that companies are starting to consider to enhance their competitive advantage in the market. This approach is largely due to a push from investors, new employees and society. The business case for diversity in the workplace is crystal clear, with a recent study from McKinsey reporting that companies with greater gender diversity are 25 percent more likely to have above average profitability compared to their competitors.
A sustainable competitive advantage is a force that enables business to have a more refined focus, more sales, better margins, and customer and staff retention,
compared to their competitors. It will be almost impossible for companies to maintain that advantage without adequate funding as well as acquiring new employees who are able to bring new skillsets into the business.
The George Floyd Movement has spurred companies to look at their inclusivity and diversity strategies, aboveas customer activism is at a high and competitive advantage needs to be maintained. The need to understand and be sensitive about race, gender and other social issues is becoming clearer. Businesses need to acknowledge, address and work towards an equal and unbiased system in order to remain competitive.
Globally, investors are pushing for commitments and are vowing to intensify engagement with companies based on IDE. Companies that are aiming to maintain long term competitiveness are most likely to feel the pressure, especially when growth needs to be funded. In South Africa, we have seen a move towards inclusivity at board level, as this is still a very male dominated space. It is important that business leaders view IDE as being part of social justice, corporate responsibility, and regulation compliance in terms of the Employment Equity Act and Black Economic Empowerment (BEE). South Africa’s regulations has come some way to push for IDE, however, investors and employees play a much bigger role in bringing about change.
Until companies fully embrace the societal issues and the legislation that promotes IDE, we will continue to not meet the mark. For example, rather than making BEE a tick box exercise to ensure that their scorecard achieves a certain rating, businesses need to remember the impact and purpose of the law. Embracing the skills development side of BEE allows locals to enhance themselves, participate in the economy and let their voices be heard. Furthermore, boards will not have members to achieve set out specifications to ensure the business is ‘compliant’, but boards will be made up of individuals from different backgrounds who are best suited for the position. True inclusion in a business sense brings enormous amounts of advantages, but the biggest advantage is the perspective on the world that can be capitalised and ensure that the organisation is remaining abreast societal issues. Mr. Alan Mukoki, CEO of South African Chamber of Commerce and Industry (SACCI), highlighted the importance of IDE in South Africa, by saying, “We can only build economies when people have rising incomes.” Our country faces massive unemployment, low economic growth, and inequality. Most people facing this will fall under the IDE scope. Only when the majority that are excluded, become included, will this bring much needed rising incomes that the country so desperately needs. Skills will also be in abundance, thus improving the skill level that organisations are able to retain.
There is a short-term approach from many businesses where they don’t see this linked to long-term competitiveness of both their company and our country. We cannot grow and create value if IDE is not part of our strategic imperative in a country such as ours.