The Ten Myths of Black Economic Empowerment and Employment Equity

By Teresa Oakley-Smith

Myth One: Employment Equity is reverse racism.

Employment equity was never envisaged and should not be implemented as reverse racism. It should be implemented however in order to address the imbalances of the past. It is necessary therefore to have unequal treatment in the short term in the interests of ultimately achieving equity in the long term. The process does not involve artificially keeping the non-designated group back but rather accelerating the progress of the designated groups.

Myth Two: We implement BEE because the government expects it, but it won’t impact on the “bottom line”

The major reason to implement BEE is precisely because it should impact favourably on the “bottom line”. Effective implementation of BEE should create an extended customer base, open up more favourable procurement possibilities, and bring in new people with new ideas. Well managed diversity impacts positively on team work, motivation, morale and ultimately productivity. All of these are “bottom line” issues.

Myth Three: Employment Equity only favours blacks

The designated groups in EE compliance include white women and all persons with disabilities. Blacks in the designated groups cover Africans, Indians and Coloured South Africans. Contrary to popular opinion there is no mandatory “pecking order”. However, those companies which recruit and promote white women at the expense of black South Africans must ask themselves whether or not they are acting in the spirit of the Act. Remember the goal is to redress past imbalances.

Myth Four: EE Compliance means having to meet Government Targets and Quotas

The government has not imposed any targets or quotas. Each company determines its own numerical goals in line with its industry and company strategy. The Department of Labour will look at sector benchmarks.

Myth Five: BEE and EE are just fancy names for Corporate Social Responsibility (CSR)

Effective CSR can certainly strengthen an overall BEE strategy but effective BEE implies looking at ownership as well as other issues. These are identified in the Balanced Scorecard approach advocated by the Mining and Financial Services Charters. Aspects of the Balanced Scorecard include internal empowerment. Effective employment equity compliance can help to bring this about together with an appropriate Skills Development strategy. Certainly implementing development interventions, however worthy, in isolation of an effective broad BEE strategy will not meet an organisation’s obligations in this regard.

Myth Six: Employment Equity will inevitably result in a lowering of standards

Unfortunately, South Africa does not have a great record in the areas of productivity and management to begin with and effectively implementing EE can in fact result in a raising of standards. It means a break away from the old mindset of “my way is the only way” and a recognition that different people, supported and well managed can bring with them creativity, innovation, open doors to new markets and access different customer bases. Diversity doesn’t mean less than, or greater than, it simply means “different”. What is critical in this debate is recognising the need to develop an “enabling environment”. Creating a workplace where people feel valued and supported, able to try, even to make mistakes, is a major challenge facing many workplaces.

Myth Seven: Affirmative Action failed in America so it is bound to fail here:

AA is just one tool in the business arsenal aimed at creating a BEE company. AA will fail if it is done haphazardly without the necessary support structures in place. Our Employment Equity Act puts in place supporting mechanisms for AA in terms of Skills Development, Diversity Training and a legislative framework. AA cannot work without the support of an effective company policy and realistic goals set. South Africa is not the USA. Here the majority were deprived of opportunities, education and development. We need to redress this issue. In the USA, the target group for AA still make up the minority.

Myth Eight: All black employees are Affirmative Action employees

Not all black employees are affirmative action appointees. Companies need to spell out what they mean by Affirmative Action. In many instances many black people in organisations will fall outside of the definition. Affirmative Action candidates are those that have potential to succeed but due to a lack of opportunity, education and/or training need initial support such as mentoring, coaching in order to succeed in their positions. This implies the need for effective performance measurement and appropriate career pathing.

Myth Nine: BEE is about giving away companies to a handful of elite Black South Africans

BEE is a complex strategy but nowhere does it suggest that organisations should be given away. In terms of ownership, which is indeed a significant part of Black Economic Empowerment, companies and shares in companies can be sold to new black owners and money can be raised to finance this in various ways. But, BEE also involves addressing challenges in the organisation through employment equity and skills development so that the internal culture and climate compliments and supports the new external ownership. That is why we hear mention of “The Balanced Scorecard” approach in the Mining and Financial Services Sector Charters.

Myth Ten: “There’s Nobody Out There!”

This is the cry that goes up very often when organisations are under pressure to transform. At entry level the huge numbers of unemployed black graduates fly in the face of this assertion but companies need to be prepared to develop and train new entries and prepare them for the world of work so that they are not set up for failure. At other levels organisations need to look at” home growing” their own people and establishing a strategy with short, medium and long term aims. This might involve providing bursaries, supporting schools and actively marketing their industries. The Setas should prove very valuable partners in this regard. The idea of finding one good black person to put in a senior position does very little to transform an organisation and often such a person is regarded as a barrier by his black subordinates. The process should ideally involve the identification of exceptional talent at the top end supported by a mid level core of developing and developed employees working to bring people from the designated groups through the ranks. Numbers can be determined by the EE plan of a particular organisation. All of this however cannot succeed if work is not also done in the creation of a culture which values and supports diversity.

Theresa Oakley-Smith
Managing Director of Diversi-T