transformation - what's already been done

The transformation pillar of the Good business journey embraces the dti scorecard framework including: equity ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development.

Woolworths has set a target to become a level 4 BEE contributor (dti codes) by 2012. Work has continued in close collaboration with employees, franchise partners, suppliers and government to meet the targets.

Significant capacity building has taken place in all business units to drive delivery of the targets and ensure integration into the business strategy.

All business units understand the BEE status of suppliers, are focused on transforming the supplier base where possible and support new enterprise development. This ensures compliance and commitment to the targets.

BEE employee share ownership scheme

The BEE employee share ownership scheme was established in 2007 to accelerate transformation initiatives by spreading equity ownership more broadly across Woolworths. The scheme also provides a retention incentive to employees. A board of trustees has been established and there were two dividend payouts in September 2007 and March 2008. The full benefits of the scheme become due in 2015.

Unfortunately employee turnover amongst the retail sector as a whole and particularly amongst employees benefiting from the BEE employee share ownership scheme has adversely affected the Woolworths ownership status.

Woolworths was a level 7 contributor in the 2007 financial year, established though a self-assessment process.

Woolworths improved its status to a level 6 contributor in 2008, as verified by PKF BEE Solutions, an ABVA-affiliated BEE verification agent.

BEE scorecard against last FY and targets

		BEE score as at:	Target:
BEE components	Weighting	June 2008	2011/12
Direct empowerment
Equity ownership	20	3.8	6.5
Management	10	8.4	8
Human Resource Development
Employment Equity	15	9.8	11
Skills Development	15	10.5	15
Indirect Empowerment
Preferential procurement	20	2.4	13
Enterprise development	15	5.3	11
CSI	5	5	5
TOTAL	100	45.2	70
Contributor level		Level 6	Level 4
Level range		(45 – 54.9)	(65 – 74.9)

transformation – what we’re doing

management control

Woolworths continues to focus on representivity of black non-executive members and senior executives through succession planning and talent management processes. At an executive board level, Zyda Rylands was recently promoted to the position of Chief operating officer: Support services.

employment equity

Employment equity and diversity is a critical component of the transformation of Woolworths. This is embedded and aligned to the business strategy, succession planning and talent management processes. Woolworths has a leader-led employment equity strategy and human resource practitioners who play an enabling role.

Woolworths meets the dti set minimum targets for all occupational categories except for disabilities. There has been an increase in the percentages of black representation in all occupational categories since June 2007. In line with the BEE strategy, Woolworths strives to meet the Employment Equity Act requirements. Below is Woolworths workforce profile.

	Male			Female			White		Foreign nationals
Occupational levels	A	C	I	A	C	I	Male	Female	Male	Female	Total
Top management	0	0	0	0	1	0	2	0	1	0	4
Senior management	3	14	11	4	6	6	59	45	12	6	166
Professionally qualified and experienced specialists and mid-management	52	134	44	55	173	48	250	300	18	12	1 086
Skilled technical and academically qualified workers, junior management supervisors, foremen and superintendents	350	339	68	450	543	96	234	267	6	10	2 363
Semi-skilled and discretionary decision-making	2 372	923	125	6 275	2 581	344	174	269	8	19	13 090
Unskilled and defined decision-making	604	213	29	683	259	20	16	12	1	1	1 838
Total permanent	3 381	1 623	277	7 467	3 563	514	735	893	46	48	18 547
Non-permanent employees	3	3	0	10	5	0	0	0	0	0	21
Grand total	3 384	1 626	277	7 477	3 568	514	735	893	46	48	18 568
Employees with disabilities	16	8	3	25	15	1	5	10	0	0	83

Note: A = African, C = Coloured, I = Indian and W = White

Woolworths employment equity profile as at 30 June 2008 by occupational levels

skills development and training

Learning and development continued to be a key enabler for the development of a black talent pipeline for key roles in the business. Woolworths initiated the process to accredit the learning interventions with the relevant Skills Education Training Authority (SETA).

A total of 709 black employees are on learnerships, including employees in receipt of educational assistance, co-op students and accredited learnerships. This represents 3.8% of Woolworths total employees.

Number of interventions

Comparison
per skills year	African		Coloured		Indian		White		WW Ave
	Male	Female	Male	Female	Male	Female	Male	Female
2007 – 2008 Plan	4.1	4.3	3.7	3.5	4.4	5.6	2.2	2.1	3.9
2007 – 2008 Actual	2.6	2.0	2.2	1.4	3.7	2.8	3.8	3.0	2.2
2008 – 2009 Plan	1.4	0.9	1.6	1.4	3.1	3.0	2.6	2.3	1.4

Number of training days

Comparison
per skills year	African		Coloured		Indian		White		WW Ave
	Male	Female	Male	Female	Male	Female	Male	Female
2007 – 2008 Plan	4.5	4.4	4.5	3.7	5.2	6.0	3.1	2.7	4.2
2007 – 2008 Actual	3.5	2.6	2.9	1.7	5.4	3.9	6.0	4.3	2.9
2008 – 2009 Plan	2.4	1.5	3.7	4.5	9.0	5.9	9.9	13.7	3.6

Ntingwe tea: One of Woolworths enterprise development projects

preferential procurement and enterprise development

Woolworths is committed to supporting BEE supplier partners and developing new enterprises to add value to the supplier base.

The total score of 2.4 out of 20 points is based on supplier credentials accepted for verification and therefore excludes self-assessed suppliers.

Woolworths has supported its black-owned franchisees as preferential business partners as part of the enterprise development (ED) strategy.

Finding the relevant and appropriate BEE suppliers for the product required by Woolworths still remains a challenge.

There are not that many opportunities that lend themselves to small businesses, and sourcing viable small suppliers is difficult, so Woolworths continues to encourage existing suppliers to improve their BEE status as well as coaching new SMME’s into the Woolworths supplier base.

In formulating our strategy, Woolworths ED aims are to address the challenges facing small black-owned businesses by assisting these businesses in moving from survivalist to sustainability.

Furthermore, in line with the Woolworths strategy of building long-term relationships with its suppliers and partners, we focus our ED effort on emerging organisations in our greater supply chain. Our assistance takes the form of financial assistance through:

• Loans;
• shorter payment terms; and
• grants (limited).

This is combined with assisting in the development of business skills through training, coaching and mentoring.

We recognise that in order to be able to make a meaningful contribution, we will need to partner with many other organisations. Partnerships are also being established with funders, as well as organisations that can assist with providing business skills training and coaching.

We see our ED strategy as an investment in the future of our business, the wider economy and the society in which we operate.

where we’re going

• Focus on attracting, developing and retaining black management skills;
  
• ongoing focus on delivering employment equity targets;
  
• bring the learning centres on stream to accelerate the development of retail skills by providing focused and accredited courses required for modern retail – these learning centres will provide a skills pipeline to address the shortage of black skills in the retail sector; and
  
• drive preferential procurement and enterprise development.