TALENT RETENTION

Optimal organisational design and leadership capacity

The review and implementation of the organisational design for all divisions was completed during FY23 and the appointment of executives to populate executive structures was mostly concluded in FY24 and FY25. As part of this process, several changes were made to the composition of corporate services and divisional Excos to align executive capacity with strategy implementation.

We believe that these changes have created a solid executive leadership layer that will reposition the group strategically for strategy execution and growth. To reduce the risk of turnover and misaligned job expectations, a formal integration framework will be developed and implemented in FY26 to facilitate executive team integration and ensure that new executives become fully functioning members of the organisation.

Incentivisation aligned with strategy

In June 2024, the board approved the group’s five-year strategic plan, which is the mechanism used by the group to quantify the financial impact of the strategic focus areas. In terms of the board-approved remuneration policy, the variable pay measurement criteria incorporate financial and operational targets aligned with the group’s five-year strategic plan to incentivise management for the implementation of strategic and operational initiatives that support group performance.

Executive key performance indicators (KPIs), aligned to the group’s five-year strategic plan, form part of the vesting criteria for the executive long-term incentive (LTI) scheme. Individual KPIs have also been included as one of the measurement criteria for the FY25 Annual Incentive Bonus scheme for the KAP corporate services executives, excluding the KAP executive directors.

In addition to these schemes, each division has incentive programmes targeted to middle and junior management that are aimed at driving divisional performance against financial and operational targets. Executive KPIs are determined based on the KAP and divisional strategies. The individual KPIs for all LTI participants have been defined and will be monitored as part of normal performance management processes.

Leadership development and succession

We do not have significant executive succession risk considering the current age profile of our executives and our mandatory retirement age. In the event of unplanned succession, we have sufficient internal executive and functional capability to ensure business continuity while suitable external candidates are recruited. Through our internal recruitment function, we are adopting proactive recruitment strategies to close potential succession gaps in critical and scarce roles. Our divisions are also implementing initiatives to develop leadership competencies with the objective of growing future leaders, which will improve our internal leadership talent pipeline and improve leadership capacity across all management levels.

Onboarding

We have invested in comprehensive employee onboarding processes to integrate new employees into the group. We believe this will contribute to increased employee engagement and retention levels. Through the onboarding processes, new employees are familiarised with the company policies, values and culture. The processes also enable managers to clarify the roles of new employees and key results areas to improve performance and reduce the risk of misaligned job expectations.

Training and development

Our training and development activities are aimed at supporting the group strategy through various leadership and technical development initiatives.

These include:

• Learnerships and graduate placement programmes which deliver a pipeline of junior technical skills, typically absorbed into our divisions on completion.
• Technical and work-integrated learning programmes provide the requisite skills to improve operational efficiencies.
• Bursaries are awarded to employees to assist in furthering their academic progression in job-aligned areas.
• In addition to technical skills programmes, we support leadership development training focused on supervisory, middle and senior management levels to build leadership capacity and a pipeline to address succession gaps.

Our expenditure on training and development was R118 million (FY24: R122 million), with the lower expenditure due to lower headcount. We offered internships, learnerships and apprenticeships worth R63 million to both employees and unemployed learners as part of our human capital development programme, with our total training initiatives amounting to 7 615 (FY24: 7 211). We offer both on-site and off-site training by accredited providers.

Our training and development include health and safety training, which amounted to R6 million during the year, spent on 3 397 employees.

Race diversity

Our permanent workforce comprises 90% black employees (FY24: 89%), and 65% (FY24: 60%) of management (junior management and higher) comprises permanent black employees. On a senior management level, black employees comprise 15% (FY24: 15%) of total positions.

As we are witnessing higher turnover rates of our junior and middle-management black employees, we are focused on increasing black representation across all managerial levels in line with the five-year binding sectoral EE targets published in terms of the amended EE legislation.

Gender diversity

Management has set internal targets to improve gender diversity in leadership positions, and to improve female representation across all operations. At board level, 33% of our directors are female, with 25% of the board comprising black females. Females comprise 21% (FY24: 20%) of our permanent workforce and hold 30% (FY24: 30%) of managerial positions (junior management and higher).

On a senior management level, females hold 19% (FY24: 19%) of total positions. In addition, divisions will set internal gender targets in line with the five-year binding sectoral EE targets published in terms of the amended EE legislation.

Age diversity

Age diversity provides an opportunity for employees of different ages to collaborate, share knowledge, offer different perspectives and transfer skills. Most of our workforce is between the ages of 30 and 50.

We are also committed to providing an accommodating work environment for people with disabilities. Of our employees, 42 permanent employees (FY24: 40) and 277 learnerships are people with disabilities.

HEALTH AND SAFETY

Safety

We are committed to providing a safe working environment for all our employees and contractors and we target zero fatalities. At an operational level, we have comprehensive safety management systems, processes and procedures in place aligned with the Occupational Health and Safety Act (‘OHSA’), which covers employees, contractors and members of the public that enter our facilities or sites. Several facilities are ISO 45001:2018 accredited. Each division identifies, measures and reports on health and safety matters. Compliance is reported at the divisional audit and risk committee meetings and monitored at the KAP compliance committee meetings.

We continually train employees and contractors in health and safety procedures applicable to their work environment. All employees and contractors undergo general health and safety training during induction and annual refresher training, in addition to the continuous training required by OHSA. 

Due to the diversity of our operations, the latter is performed in line with the type of operations and operational exposure, as required by OHSA.

Our divisions are regularly assessed by internal health and safety representatives. Where required, assessments by accredited, external, independent assurance providers ensure compliance with relevant health and safety statutory and legal requirements. The frequency of assessments depends on the statutory health and safety requirements specific to their facilities and operations.

Our occupational health and safety policies include a risk management plan that is supported by a legal, risk and incident register, which allows for the identification of hazards, as well as regular risk assessments, internal audits, safety training, management reviews and third-party audits. These are undertaken on existing business and new projects. In-depth investigations of all incidents are conducted, and mitigation procedures are reviewed regularly.

Because the equipment and certain raw materials used at some of our manufacturing facilities can potentially be dangerous to our employees, they are trained to strictly adhere to all required health and safety regulations. Specific training, such as working at heights or in confined spaces, lockout and safe work procedures, is given to specific employees and contractors who work in these environments, in accordance with a training plan which is tracked and monitored.

In our logistics operations, road accidents present the most material risk to the safety of our employees. To reduce road accidents, we invest in safe vehicles and equip them with suitable technology, conduct driver training and roll out broad-based road transport safety campaigns for our truck drivers. Optix focuses on improving safety on our roads by deploying video telematics and predictive analytics.

Our safety performance is summarised below: 

Health

We have invested in on-site occupational and primary healthcare clinics for our employees at most of our manufacturing sites. In cases where these are not available, we ensure that our employees and contractors have access to healthcare facilities nearby. The clinics offer first aid and play a crucial role in dealing with injuries on duty. They are run by qualified nursing staff, who are assisted by medical doctors. The services they offer include workplace health risk assessments, chronic disease screening and management (including for tuberculosis and HIV), industrial hygiene and medical surveillance.

They also offer primary healthcare medication and family planning. Where there is no on-site clinic, an occupational health practitioner is contracted to perform medical surveillance. In our logistics environment, mobile clinics are available on the main routes we use.

These clinics test for chronic conditions and dispense chronic and primary healthcare medication.

HIV/Aids is addressed in all divisional policies, and each division has a comprehensive, holistic programme in place to promote awareness, prevention and voluntary testing, as well as to provide support. Policies cover issues such as confidentiality and protection against discrimination. We are committed to implementing programmes that are relevant and valuable to our employees in each division. Where applicable, local communities are involved in initiatives such as World Aids Day and HIV/Aids education.

Our divisions have wellness programmes and employee assistance programmes to assist employees with their overall wellness, both from a professional and a personal perspective.

LABOUR RELATIONS

We nurture the belief that constructive engagement with our employees is critical to the sustainability of our business. We comply with the provisions of applicable labour and employment legislation in all the countries in which our businesses operate.

We have sound relationships with our key stakeholders, including industry organisations and trade unions, and we create an environment conducive to achieving mutually beneficial outcomes and collective agreements with these unions. We also play a meaningful role in industry collective bargaining structures, including the bargaining council structures and employer organisations in the industries in which our divisions operate.

Trade union representation remains stable and continues to form a solid base for employee engagement with approximately 60% (FY24: 70%) of our South African workforce belonging to collective bargaining units in FY25.

Our divisional union representation is summarised below:

The decline in union membership is mostly due to the deregistration of a union, loss of a contract in Unitrans, and employee turnover.

FAIR LABOUR PRACTICES AND REMUNERATION

Our approach to our labour practices and remuneration is outlined in our human rights policy. We comply with the provisions of the Labour Relations Act, Basic Conditions of Employment Act and other labour laws, which promote collective bargaining, prohibit forced labour, regulate hours of work, meal intervals, rest periods and overtime work. We do not employ children under the age of 18.

Our divisions monitor and report on overtime work to ensure that we have a healthy workforce and create a safe working environment for our employees. We have established an employment compliance committee as part of our combined assurance framework to develop and implement the controls, systems and processes necessary to ensure labour and employment legislative compliance. Our employees have the option to participate voluntarily in both medical and health schemes, while membership of a retirement scheme is compulsory for all our permanent employees.

We meet or exceed all minimum wage requirements as legislated in South Africa and all the countries in which our businesses operate and are committed to fair and responsible pay practices.