 Authored by: Christopher Palm, Chief Risk Advisor, Institute of Risk Management South Africa
The top risk in South Africa is structurally high unemployment; followed by growing income disparity and inequality, according to the 2019 IRMSA Risk Report. Stats SA says unemployment in the first quarter of 2019 increased by 0,5 of a percentage point, bringing the rate to 27,6%. The burden of unemployment is concentrated amongst the youth between the age of 15 and 34 years. Almost 4 in every 10 young people in the labour force do not have a job. The IRMSA report creates awareness of the risks facing the achievement of the South African country and industry objectives. More than 85 experts in their fields provided opinions and profound insights for each of the top ten risks facing the country and industry. In the IRMSA report VoxCroft Analytics specifically expressed concern that the growing disillusionment among the youth of South Africa could lead to a youth-driven protest movement, on a much larger scale than the student protest movement. Such a movement, if led and supported by other population groups in the country, would hold a particular challenge for the general political stability of the country. Nerine Kahn, CEO at Employment Relations Exchange, says unemployment is possibly the highest risk to the achievement of any or all of the National Development Plan’s (NDP) objectives. The NDP goals are targeted towards developing certain aspects of the economy, but require very significant skills and education levels. IRMSA recognises the NDP as the legitimate summation of the joint goals of government and private sector; to work towards a shared and prosperous future for the country and its people. Graeme Codrington, founding director of strategic insights firm, TomorrowToday, says South Africa is seemingly just limping along with not much changing, and yet, under the surface some significant shifts are taking place. The impact of fraud and corruption and State failure has shifted down the risk-list. It is now in the fourth place. In 2017 it was top of the list, and last year it was the second biggest risk facing the country. This reflects the ending of the Zuma-era; a decade that will be blight on the nation for some time to come. Last year saw the beginnings of a collective resolve to reverse the damage. Difficult decisions were made, such as raising the VAT rate with one percentage points, replacing the boards of key State-Owned Enterprises, dropping the nuclear deal and tackling the land issue. South Africa has a robust economy and currency (relative, at least, to our peer group which include countries such as Turkey, Argentina, Thailand, Indonesia, Mexico, Egypt and Nigeria). It has a stronger government than we have had for years. We are not where we want to be, but we are a long way ahead of where we once were. The first few years of the 2020s will see a more resolute approach to solving the land issue. We have no future as a country if a vast majority of its citizens remain locked in endemic poverty and landlessness. The ANC has pledged to deal with the land issue lawfully, carefully and without damaging the country’s economy. Small groups, with their own particular agendas, are using fear-mongering tactics along with “sophisticated psychological techniques” and the manipulation of social media, to sow seeds of fear, discord and enmity between ordinary South Africans. Business and individuals must get involved in solving the major issues that currently lock people out of their futures, especially education, employment and healthcare. Trevor Channing, head of governance and risk at the Chemical Industries Education and Training Authority (CHIETA), is of the view that South Africa’s second biggest risk - growing income disparity and inequality - will threaten the majority of the six priorities in the NDP. It will have a direct impact on our social cohesion, strengthening our democracy, citizenry and functioning as a capable and developmental state. The country now needs ethical political leadership for sustainable foreign investments, and an end to wasteful expenditure for resources to be applied in ways that will stimulate economic growth. The country needs all sectors of society to create a united front against the national issues that are holding us back. South Africa top 10 overall risks
ENDS MEDIA CONTACT: Rosa-Mari, 060 995 6277, [email protected], www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa/
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 Authored by: Jessica Knight, IRMSA Risk Intelligence Committee Member
The Fourth Industrial Revolution brings with it a fundamental shift in how we do business. Advances in technology and the increasing digitisation of many roles means that the conventional brick-and-mortar business model is quickly shifting towards a hybrid model of an international corporation with nuances of the exponentially popular gig economy. This hybrid is regularly defined by decentralised operations and autonomous employees. In this ever-transforming landscape, a key consideration for organisations is how to take advantage of the global marketplace to source top talent, through the use of digital nomads. Digital nomads are remote workers who typically travel to different locations while still fulfilling their professional obligations. They often work in coffee shops, co-working spaces, or public libraries, relying on devices with wireless internet capabilities like smartphones and mobile hotspots to do their work on the move. The average digital nomad is a Millennial between the ages of 22-35 who is tech-savvy and in hot pursuit of the optimal work-life balance. Rethink Productivity Measurement The rise of digital nomadism is causing companies to re-evaluate the traditional model of measuring productivity. Companies that are preoccupied with time spent working - as opposed to deliverables or results and the quality thereof - are focused on the wrong unit of measure. The number of hours a person works rarely equates to their productivity or achieved results. In a factory system you can achieve economies of scale through allocating and automating tasks that run on a time basis and can measure the cost/yield per hour of production. People are not machines and you cannot achieve the same utility by treating them as such, so why do we continue to use elements of the factory system in how we manage and govern businesses? Productivity and efficiency in humans should not be measured off the basis of hours worked. There is an ebb and flow that needs to be considered, differentiating human and machine elements. Enter the digital nomad, a role focused on results as "hours worked" becomes an almost ungovernable aspect of operations. The appeal of the 40 - 50 plus hours per week spent in a cubicle environment is dwindling in the face of defining your own operational environment through digital nomadism. Not all trends are relevant The integration of digital nomadism is not necessarily suitable to every organisation as it poses new risks stemming from hybrid business models, decentralisation and technological reliance. This refined form of freelancing is often ambiguous, lacks structure and is constantly adapting. Defining and managing your company’s risk becomes tricky when your workforce does not sit in the same place and operate using standardised methods. Controlling roles and responsibilities from a distance becomes a challenge when your team cannot be easily monitored. A business should be able to achieve the same or better results when considering the adoption of the digital nomad trend. Not all trends are relevant so adoption should always align to business objectives before pop-culture imperatives. The crux of governing digital nomads of the future is not to try and replicate a conventional business model for remote work, but rather to completely re-evaluate what a successful operational environment should look like. There are many metrics to gauge business success, but operational success - a holistic success factor for employees, their environment and the work that they do - is traditionally measured through a mishmash KPI structure with the occasional employee happiness/satisfaction survey sprinkled in-between. A company can still achieve good results with “sufficiently happy” or even unhappy employees. Effectively measuring and monitoring operations is not always a priority when the business is making money, but employee wellbeing is often the first to suffer when the business is not. Digital nomadism is an opportunity to completely overhaul this model of “average-at-best” operations by empowering employees with the ability to define their own operational environment. Making a success of digital nomadism requires providing employees with the autonomy to determine their working hours - companies must remain cognisant that not all employees perform best from 9am to 5pm, nor do all employees require 8 hours to execute the tasks expected of them. Further to this, productivity is likely to increase when employees are working in environments that make them work most efficiently. Leveraging the right technology for your business and maximising your human capital in the right way can be the difference between success and failure of the digital endeavour. Things to consider:
MEDIA CONTACT: Rosa-Mari, 060 995 6277, [email protected], www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa/  In the run-up to the important national elections in May this year, people were hopeful and desperately anticipating a change in the leadership of the country.
Everybody knew that this election was such an important time for all South Africans, fully aware of the implications for the country and hoping for certain outcomes so that the business landscape would remain secure and bring positive growth, put a stop to the pervasive fraud and corruption and most importantly, create jobs! Several months later things are still unfolding and developing, with uncertainty creating new risks and opportunities. “We need political stability in the country as it is affecting the economy. There are big issues to concern ourselves with such as stopping the mismanagement of public funds, reducing unemployment, and especially youth unemployment,” says Gillian le Cordeur, CEO of the Institute of Risk Management South Africa (IRMSA). The results of Stats SA’s Quarterly Labour Force Survey for the second quarter of 2019 indicate that the official unemployment rate increased to 29%, up from 27.6% in the first quarter. The country now has 6.7 million unemployed people. Stability and confidence “We need confidence in our leaders. Stability is key for us to move forward,” says Le Cordeur. She says the internal political struggles within the country’s local, provincial and national leadership are eroding the stability and confidence needed in South Africa from its citizens and international community alike. Adding to this, is the uncertainty around land reform weighing heavily on business leaders, investors and risk professionals and whether or not it will be dealt with responsibly. “We need to be thinking ahead and to have a strategic purpose for what our country and our organisations need.” It is IRMSA’s conviction that the country needs stronger risk professionals and stronger private and public sector leaders to be able to make the right strategic moves as we head into the future. Risk professionals that are able to reflect on the political and economic factors right now and how they could potentially play out in the next few months and how we need to prepare our organisations. To be on the forefront of informing decision making and enabling transformation - not only within our organisations but in the country as well. Corporate governance and ethics Le Cordeur adds that as much as IRMSA is concerned about the political and economic landscape they are also concerned about corporate governance and ethics. There have been too many corporate failures in recent times. On top of that South Africans are being swamped with reports of corruption and state capture. It is all very well to wait for this landscape to change from a political point of view, but at the same time the foundation of our society remains weak. “As risk professionals and business leaders we must make sure that our house is in order so that there can be no finger-pointing. It will be such a pity that you could not make an impact, because your house was not in order.” Post-election landscape IRMSA will be tackling pressing issues during its post-election event in Johannesburg later this month (August). Christopher Palm, Chief Risk Advisor at IRMSA says that linking risk to strategy, applying a systems-thinking approach to risk management and making sure that risk influences decision making through the development of predictive capabilities are critical success factors to build robust alternative futures over the short, medium and long term landscapes for South Africa and South African business. “Once you know how the landscape will unfold in the next few years, you are able to align your own activities and strategies to be able to deal with those risks,” says Le Cordeur. “We need to pull everything together to act pro-actively on the risks facing us on all fronts.” ENDS MEDIA CONTACT: Rosa-Mari, 060 9956277,[email protected], www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa/ |
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