Our people

Staff per business unit

Telkom currently operate seven business units, supported by the Corporate Support Centre. The headcount per business unit is shown below:

Table: Number of permanent staff per business unit.

Strategic workforce and cost planning

The Strategic Workforce and Cost Planning (SWCP ) methodology uses the group strategy as the point of departure to identify the gap between our current workforce and future needs. As a result of international trends affecting traditional fixed line operators (e.g. flat/ declining revenue due to increased competition, migration of voice to mobile, commoditisation of voice, growth in data and the need for high-speed networks) our workforce needs are declining. However, we endeavour to minimise the impact of this on our employees and thus commenced with a voluntary separation offer to employees towards the end of the 2013 financial year.

The SWCP process and methodology is repeated annually as illustrated in the update cycle below.

How SWCP informs business and budget decisions

The result of this process is a solid indication of workforce requirements that allows us to plan accordingly. Strategic workforce planning helps to achieve the transparency needed to facilitate the development of detailed, measurable initiatives that inform budget requirements. These initiatives are incorporated into the group business plans.

Workforce movements

Table: Staff trends at Telkom: 2009 – 2013.

Employee trends in subsidiaries

Workforce demographics

The permanent employee headcount increased from 20,939 to 21,209 in the year under review, while temporary headcount decreased from 3,028 to 2,938. Females represent 30.9% of the permanent workforce with black representation at 64.9%.

The average age of a Telkom employee has gradually risen from to 43 (female: 40, male: 44) over the last year, and the average length of service is 18 years (female: 14, male: 20). This data reveals an experienced and mature workforce with a proven track record.

Total workforce by political region

The subsidiaries operate in six regions and a corporate support centre, with approximately half of the total staff being based in Gauteng.

Total workforce by age group

Age distribution Telkom SA (Permanent employees)

Age distribution

Graph: age distribution as at 31 March 2013

Total number and rate of employee turnover by age, gender and region

Our natural attrition rate increased from 2.3% in 2012 to 2.8% in 2013 (2010: 3.7%, 2011: 2.7). Resignations increased from 1.6% in 2012 to 1.8% in 2013 (2010: 2.5%, 2011: 1.7%). The recruitment rate increased from 1.9% in 2012 to 4.3% in 2013 largely due to the conversion of temporary workers to permanent workers (2011: 1.9%). The low attrition rate and limited recruitment needs will continue to constrain our ability to significantly transform the demographic profile of our workforce. As indicated in the table below, black representation is 64.9% (2011: 62.9%, 2012: 63.9%) while female representation is 30.9% of the permanent workforce (2011: 29.0%, 2012: 29.8%).

Note: Labour turnover (natural attrition) and benchmarks do not include company initiated losses such as packages.

Recruitment rate

Culture revitalisation

Culture revitalisation across the Group was identified as a priority in our transformation process. The Barrett Culture Tools and transformation process are being used to advance the Group to a value-based performance culture. Following the 2009 Culture Values Assessment (CVA), five core values – Continuous performance improvement, Honesty, Accountability, Respect and Teamwork (CHART) – were identified.

Employees then identified five desired behaviours associated with each of the core values. Interventions to entrench these new values and the associated behaviours were then put into place through the use of an online awareness tool, workshops, discussion sessions, and cultural fit assessments.

Entropy

Entropy is the identification of non-productive or limiting aspects of Telkom’s organisational culture. It is encouraging that the level of entropy decreased by 5% to 25% in the year under review. An entropy level of 10% is regarded as healthy.

Companies with highly engaged employees usually have low levels of cultural entropy that, in turn, results in:

Diagram: entropy levels for the Group.

Diversity and transformation

We were able to positively influence the Group’s workforce demographics during the financial year.

Status of workforce demographics at 31 March 2013 – Telkom SA

Employment equity statistics

Female distribution over time (numbers)

Female distribution over time (%)

Race distribution over time (numbers)

Race distribution over time (%)

Table: gains and losses (Telkom SA )

Table: employee gains and losses (Trudon)

Performance management

All employees undergo regular performance assessments. This is a process that involves regular feedback and review sessions, which provide performance and development plans.

A short-term incentive plan to reward the achievement of group and business unit performance targets has been in place for a number of years. I n addition, we embarked on a process to develop a differentiated reward model, which is intended to link remuneration to market related salaries and also differentiate pay based on performance.

For more information refer to the remuneration report commencing on page 134 of this report.

Talent, training AND retention management

During the financial year, R 255 million (2012: R 245 million) was invested in training.

We recently completed the first phase of the installation and commissioning of a new training network. This dedicated training network is a protected simulated learning environment that poses very limited security risks to the production network. This network will enable high-quality training at a significantly lower cost than would be possible through the use of external vendors.

Table: comparison of training days (Telkom SA only)

Executive leadership development

The development of a sustainable leadership pipeline is critical to Telkom’s continuity from a human capital perspective. This has become increasingly pertinent to the organisation following the resignations of senior leaders during the 2013 financial year.

A revised succession planning process was implemented in April 2012. A phased implementation approach was followed, commencing with succession planning for the GCEO and Exco roles. Further to this, we have identified frontline leadership and critical skills positions to ensure that successors are identified and developed for those specific areas of the business.

People development

Below are the key people development initiatives in support of the Group strategy. These initiatives also support the mitigation of some of the key human capital risks.

Impact of the NGNEC rollout

To ensure staff are prepared for the migration to an IP network, we commenced training of field staff in NGN skills to facilitate a smooth transition from legacy technology in which they were trained and to which they are accustomed. Since February 2012, 1,267 candidates were trained, amounting to 6,335 training days. Training is planned in a just-in-time manner to occur alongside the planned network rollout over the next three years.

Programmes for skills management and lifelong learning

Centre of Excellence programme

This is a collaborative programme between Telkom, academia, the telecommunications industry and government to promote research in communication technology and associated sciences. Sixteen Centres of Excellence have been established across the country, making it the largest co-ordinated research effort in ICT in South Africa. Telkom participates in this collaborative programme by granting full-time bursars the opportunity to continue their studies and research via the Telkom Centre of Excellence programme. At present there are 34 individuals conducting research at the various Centres of Excellence.

In addition, Telkom provides sponsorship to three universities (University of KwaZulu-Natal, North West University and the University of Limpopo). This commitment assists previously disadvantaged students who fail to meet the university entrance requirements in gaining eligibility to study engineering via the bridging programme.

Graduate development schemes

It is the policy of Telkom to promote and invest in the development of skills and knowledge that will enable employees, their immediate dependants and external applicants to meaningfully participate in the mainstream of Telkom’s business and in the South African economy.

Over the past financial year Telkom has dedicated itself to secure young talent resources and build an ICT skills pipeline in line with the national agenda for job creation and employment. There are currently 145 active fulltime bursary students who should complete their studies and be ready for placement (dependent on academic performance) as follows:

2013 : 90
2014 : 45
2015 : 7
2016 : 3

During the 2013 financial year, 58 full-time bursary students successfully completed their studies.

Change management

Telkom carried out various change management initiatives over the past year at the individual, group and organisational level to ensure business projects and initiatives are implemented successfully. Examples are the implementation of shared services and customer experience projects as well as other initiatives prompted by technological, structural and system changes. These change initiatives help employees to deal with and understand change.

Telkom established a change management philosophy, methodology, process and tools based on the Prosci’s Change Management Model.

Employee relations

The table below records the percentage of employees covered by collective bargaining agreements.

Table: union membership as at 31 March 2013

Consultative framework

Organised labour is engaged based on the following consultative framework:

Lost days due to industrial action

In December 2012, 56 man-days were lost as a result of the Cosatu organised e-toll strike. Man-days are counted on an individual employee basis, meaning that 56 employees went on strike for one day.