INTEGRATED ANNUAL REPORT 2011 GRI RESPONSES  

Our people

A group strategic focus area
Value creation for and by employees
Equality is a central tenet of employment across Barloworld
Continued commitment to training and development
Tragically, two work-related fatalities
Improved LTIFR of 1.31

Barloworld understands that its employees are the foundation and drivers of its success. Accordingly, ‘People’ is identified as one of our strategic focus areas. Central to this approach is value creation through and for employees by attracting, developing and retaining globally competitive people to implement our strategy and meet our growth targets.

Specific activities include developing internal human resources for promotion through detailed and individual development needs analysis, leadership/ management development programmes, and continued focus on enhancing technical skills.

We are committed to recruiting from communities in which we operate. As these are predominantly developed urban locations, most of our required skills base is local, as are sub-contractors.

Where required skills are not available, the focus is on expatriate assignments and a commitment to develop the local skills base. There is a small contingent of 250 international assignees who principally support operations in southern Africa. Senior divisional management is mostly locally based, with 12 currently in expatriate positions. Overall, 1.3% of employees are expatriates. We comply with legislation when recruiting locally and procedures for hiring include advertising, developing people from within the company, and ongoing involvement in the community and schools to source potential employees and learners.

Empowerment and transformation legislation and objectives in South Africa reinforce our commitment to local recruitment and development of employees. In other regions, localisation requirements also inform recruitment procedures.

Overall headcount (permanent and contractors greater than 12 months) increased after including our Russian operation and the Equipment division’s expansion in Africa.

Number of employees – group

Divisions 2011   2010
  2009
 
Equipment 6 848   6 121   6 436  
Automotive and Logistics 9 135   9 477   9 040  
Handling 2 582   2 471   2 534  
Corporate 106   98   103  
Total 18 671   18 167   18 113  

Region 2011   2010
  2009
 
RSA 11 403   11 267   11 018  
Rest of Africa 1 905   1 650   1 496  
UK, Europe & Russia 3 743   3 198   3 558  
Middle East & Asia 291   771   769  
Australia 492   477   439  
North America 837   804   833  
Total 18 671   18 167   18 113  

Critical success factors for employee value creation

Handling apprentice wins award
Adam Payne, apprentice engineer from Barloworld Handling in Cardiff has won the Forklift Truck Association (FLTA) Apprentice of the Year Award at its annual awards for excellence. Barloworld partners with a select number of learning providers across the UK including the City of Bristol College to support its four-year apprentice programme.

Six critical success factors guide the group in managing its people. These are appropriately implemented throughout the group via a range of interfaces and interventions. An Individual Perception Monitor (IPM) surveys employee opinion on the status of these success factors, and results are used to identify areas requiring attention. The IPM has a four-point scale and the group target is to achieve a rating of at least three in all business units for all factors. Scores of above three are considered excellent. The IPM survey is conducted every two years and each division conducted the IPM survey in the 2011 reporting period. The scores are reported under each section below.

The critical success factors and their salient features are:

Clear purpose and direction

Focused interventions and communications ensure employees understand the group strategy and priorities, and their role in achieving our goals. This engenders a sense of common purpose and commitment that drives value-creation activities in our business units. In addition, the Barloworld Global Leaders conferences ensure collective support and commitment to our purpose and direction from senior leaders and executives, resulting in strategic alignment, common purpose and community of interest throughout the group. The 2011 conference was held in March.

Business unit IPM scores on this element range from 3.29 to 3.57 (maximum 4).

Alignment

Value creation is enhanced by aligning all associated elements in the organisation – strategy, organisational design and culture, business processes and individual roles – to achieve the common purpose. Balanced scorecards, job models and organisational competencies ensure all employees understand their role in the organisation’s value-creation activities and have the required skills. This is underpinned by appropriate reward and incentive schemes.

Business unit IPM scores on this element range from 3.19 to 3.52 (maximum 4).

Inspiring climate

Barloworld’s caring, equitable and professional work environment motivates employees to contribute and be proud ambassadors of the group. An inspiring work climate assists in employee engagement.

Business unit IPM scores on this element range from 2.94 to 3.22 (maximum 4).

The group strives to achieve such an environment through:

Strong leadership that inspires confidence, loyalty and commitment which fosters a dynamic culture, encourages individual and collective wisdom, and instils a passion for winning.
Remuneration and employee benefits are attractive, well-structured and competitive. All remuneration and employee benefits are in line with applicable legislation. The group’s remuneration practices are regularly reviewed and we are committed to removing discrimination in pay scales. In South Africa, pay differentials are disclosed in terms of employment equity legislation. Ongoing reviews ensure alignment and removal of unfair anomalies. A review of executive and senior management remuneration indicates a small variance of 5.8% and 2.6%, respectively, in favour of males. It is believed that this is linked to tenure and role and does not reflect entrenched discrimination.
Consistency and equity are ensured through the Towers Watson (previously Watson Wyatt) global job-grading system which has been fully implemented across the group.
Transfer and promotion opportunities within and across departments, business units, divisions and regions offer employees the chance to pursue varied and meaningful careers in the Barloworld group. Although hiring is primarily localised, Barloworld is not a primary employer in any region.
Collective labour relations are constructively managed on the principle of freedom of association. Employees may choose to associate with representative organisations and trade unions. There are no operations where the right to exercise freedom of association and collective bargaining is at significant risk. There were no violations of these principles during the year.

Employees represented by trade unions and collective bargaining agreements by region

  % unionised % collective bargaining
Region 2011   2010   2009   2011   2010   2009  
RSA 48   51   46   39   46   47  
Other Africa 26   8   8   23   10   6  
Europe & Russia 11   14   12   52   68   64  
Total 34   35   31   37   41   42  

In the 2011 financial year, 3 019 employee days were lost to industrial action at our logistics operations in South Africa, equipment (Spain) and equipment (South Africa).The South African lost days related to industry wage disputes, while the Spanish days related to committee and union consultations.
Minimum notice periods on significant operational changes vary across the group. These are covered in individual employment contracts, prevailing legislation, applicable industry agreements and other negotiated recognition agreements.
Employee safety is a primary concern and conformance with safety rules and procedures is rigorously enforced. Occupational health and safety are key determinants in our business success and adherence to safety rules and procedures is closely managed. This begins with risk assessments that identify hazards associated
with any particular job or task and implementing safe work or task procedures to address these hazards. Employees are trained in safe work procedures and planned task observations are conducted to evaluate compliance. Depending on the hazard or workplace conditions, engineering or work-practice controls to manage or eliminate hazards are implemented. The company adheres to the applicable notice period.These measures are complemented by personal protective equipment.
Tragically, there were two work-related deaths during the year in the Equipment division – one in Isando and the other in Botswana. Both accidents were fully investigated, but the inspector’s report is still outstanding on the fatality in Botswana. Relevant action has been taken to improve safety standards in both regions.

The group has a philosophy of zero injuries or harm to employees. Business units operate under a strict risk management audit protocol incorporating health and safety.

Health and safety statistics

  LTIFR Fatalities
Occupational diseases
Division 2011   2010   2009   2011   2010   2009   2011   2010   2009
Equipment 1.37   1.80   1.40   2   1       1   2    
Automotive and
Logistics
1.20   1.19   1.12           3            
Handling* 1.70   2.28   1.67               2   2   1
Corporate                                  
Average total 1.31   1.51   1.27   2   1   3   3   4   1

A number of employee wellness and support programmes are in place, including medical aid schemes and assistance programmes. HIV/Aids receives particular attention in countries with high prevalence rates. Programmes to address HIV/Aids cover education, prevention, voluntary counselling and testing (VCT) and disease management, which includes providing anti-retroviral medication. All employees are encouraged to take the necessary precautions to prevent infection and to regularly check their status. Currently 128 employees receive HIV/Aids assistance through medical aid, company- and state-sponsored programmes.

HIV/Aids statistics in Barloworld South Africa

  Employees Employees who
know their status

% who know
their status
  % of those tested who
are HIV positive
Division 2011   2010   2009   2011   2010   2009   2011   2010   2009   2011   2010   2009  
Equipment 3 149   2 896   3 020   2 211   2 035   1 411   70   70   47   4   4   6  
Automotive and
Logistics
7 674   7 850   7 481   5 031   4 315   4 534   66   55   61   7   6   5  
Handling* 474   423   414   262   262       55   62       1   1      
Corporate 106   98   103   106   42   103   100   43   100   4   10   6  
Average total 11 403   11 267   11 018   7 610   6 654   6 048   67   59   55   6   5   5  

* Handling SA employees tested with Equipment in 2009.

There is no child, forced or compulsory labour in any Barloworld operation. This would be contrary to the organisation’s values, policies, recruitment practices and illegal in the countries in which it operates. No Barloworld operations are identified as being at risk for any of these aspects.

Sustainable competence and intellectual capital

We recognise that achieving our vision and sustainable value-creation objectives rests on the ability of our people. Attracting, developing and retaining talented and globally competitive employees is central to ensuring competence and intellectual capital in the group.

A shortfall in strategic employee skills is a high-ranking risk in the organisation given the ambitions reflected in its vision and strategic focus areas, particularly financial returns and growth aspirations.

Business unit IPM scores on this element range from 2.74 to 3.05 (maximum 4).

Initiatives to ensure sustainable competence include:

Training programmes cover apprenticeships, learnerships, internships, management and leadership development programmes, technical skills and sales skills, all of which develop lifelong skills and ensure the ongoing employability of employees. The group also conducts appropriate career-end programmes. These include retirement planning, financial planning and life skills.
A wide range of training and development initiatives ensure the ongoing development of employees at all levels. These include internal and external initiatives and are identified for employees through individual development plans linked to detailed job models and projected career paths.

Motor retail leads the way with e-learning   Training upfront   Equipment southern Africa drives AET   Africa’s first three Caterpillar dealer instructors

Barloworld Motor Retail trains on average 12% of the industry’s apprentices. A new, online, interactive automotive training system has been introduced and provides Automotive Service Technicians with an effective way to earn Automotive Service Excellence (ASE) certification. With its state-of-the-art online learning, the system provides an e-learning platform that can be efficiently leveraged for use across the education, assessment, certification and professional training markets.

 

Motor Retail launches the “Frontline Training Project”. This initiative is in the form of a learnership for all service advisors and service managers and will result in a qualification (Certificate: Automotive Sales & Support Services – NQF Level 4, National Certificate Level).

 

Adult Education and Training programme for basic literacy and numeracy is growing rapidly in Barloworld Equipment with 29 graduates in 2010/2011 who achieved certification at four different levels.

 

Three operator trainers from Barloworld Equipment Operator Academy became the first people on the African continent to join a select group of only 188 Caterpillar Dealer Instructors (CDI’s) in the world. As CDI’s, the team will provide skills analysis and production assessments on customer sites and carry out training to optimise machine operation aligned with Caterpillar specifications.

From left to right: Enoch Kgwale, Sam Magabane, David Motitswe


An intellectual capital review, which considers employees’ careers, is conducted annually. As part of this process, the group CEO reviews the positions and performance of the most senior employees, including those in critical positions, to ensure succession in critical roles, appropriate careers and development of key individuals. Similar processes are conducted at divisional level to effectively manage and develop senior managers by identifying high-potential employees with leadership ability and, through benchmarking opportunities, evaluate and develop future training and development interventions for these individuals.
Barloworld leadership and executive development programmes have been developed in conjunction with leading universities. These are usually run annually and provide unique opportunities to develop and groom identified talent, future leaders, senior managers and executives required by the group to fulfil its value-creation objectives. Delegates are exposed to our strategic framework and aspirations, global best practice and required leadership characteristics and behaviour. A leadership development programme was run in 2011 and, to date, 461 employees have completed this programme. The executive development programme was also held this year and, to date, 121 employees have completed the programme. The leadership programme will run again in 2012 and the executive programme in 2013.
The Barloworld Global Leaders’ conferences play a significant role in developing the sustainable competence and intellectual capital we require to achieve our vision and fulfil our value-creation objectives.
Given the nature of the group and its growth aspirations, technical skills development remains a priority, despite difficult economic conditions. Significant learnerships and apprentice programmes were maintained to ensure the required skills to support present and future opportunities
At present, 1 263 learners and apprentices are employed throughout the group – over 75% are based in South Africa, supported by two extensive training facilities in Barloworld Equipment southern Africa and Automotive’s Motor Retail Training academy.
In total, the group has 4 211 artisans, technicians and technologists as well as 4 297 graduates and diplomates. We are also financially supporting 269 employees studying towards degrees or diplomas, and assisting 70 individuals in training, including work experience, through a number of internship programmes.

Overall direct training and development spend increased 48% from 2010 due to increased activity and the ongoing commitment to upskilling our employees. Higher spend on middle management reflects the investment in the executive development programme for 2011.

Average training hours by category

Category Average
hours
2011
  Average
hours
2010
 
Board* 7.42   8.00  
Executive 16.63   27.37  
Senior management 28.39   16.40  
Middle management 35.44   29.09  
Skilled upper 29.86   29.89  
Semi skilled/
apprentices/trainees
38.45   25.85  
Labour/unskilled 31.03   7.30  
Total 33.34   27.79  
* Includes executive directors only

Equipment learners graduate   Avis leads industry training

The first 39 NQF 2 learners graduated at Equipment’s Technical Academy after completing the 12-month course and have now entered the business to build their experience under the guidance of mentors. A final summative assessment will be completed later this year to ensure they become certified maintenance mechanics.

 

Avis Fleet Services employees successfully completed the learnership programme which is one of many initiatives introduced to empower and develop people. This has enabled them to embark on a certificate in fleet management as endorsed by the Southern Africa Vehicle Rental and Leasing Association.

Percentage training spend by category

Category 2011
%
  2010
%
 
Board* 0.02   0.03  
Executive 0.27   0.18  
Senior management 1.13   0.61  
Middle management 16.98   16.90  
Skilled upper 45.80   51.54  
Semi skilled/ apprentices/trainees 33.50   30.43  
Labour/unskilled 2.30   0.31  
Total spend (R million) 119.1   80.5  

* Includes executive directors only

Employee turnover

Year   Resignations   Transfers   Retrench-
ments/
redun-
dancies****
  Retirements*   Dismissals   Deaths**   Other***  
Total 2011   1 703   26   227   245   475   62   795  
Total 2010   1 466   37   176   277   430   66   505  
Total 2009   1 482   110   1 075   203   561   65   422  

* Including due to ill health
** including accidental deaths (work-related/non-work-related) and deaths due to illness
*** Reflects sales of business and termination of fixed-term contracts
**** Includes voluntary terminations

In 2011, 3 378 new employees were recruited and 34 people joined the group as a result of acquisitions. These figures exclude Russia, with a headcount of 535.

During the period, 89 employees went on maternity leave and of these 73 returned to work. The majority of employees who did not return to work were ‘outside South Africa’. As this is a new indicator, these figures do not yet reflect the total group. This will be addressed in the next report.

Performance management

The group’s value-creation activities are underpinned by entrenched performance management processes, based on aligned and integrated balanced scorecards. These establish agreed performance criteria, objective and transparent mechanisms for performance review, and instil a sense of duty and ownership. They also ensure regular communication about performance, identify areas requiring support, and link into development plans and career paths.

Some 69% of employees received career development reviews during the year. Senior employees receive at least two formal performance reviews a year.

Business unit IPM scores on this element range from 2.76 to 3.12 (maximum 4).

Structured team forums

Central to achieving our vision is the ability to harness, focus and direct the collective wisdom, knowledge and experience in the group. Accordingly, regular, structured team meetings at all levels have become an established feature of our employee engagement approach. These meetings provide an opportunity to share information, motivate employees and enhance commitment, promote and encourage collective problem solving, build cohesive teams, recognise performance, ensure employee involvement and provide efficient communication structures in the group.

Business unit IPM scores on this element range from 2.83 to 3.19 (maximum 4).

Employee engagement

In addition to the six critical success factors measured in the IPM, employee engagement is also assessed.

The extent to which employees are committed to the company, have a common sense of destiny and are inspired to contribute their time and effort, measures the success of the group’s employee value creation approach and effectiveness of the related critical success factors.

Business unit IPM scores on this element range from 2.73 to 3.29 (maximum 4).

Barloworld Finanzauto recognised for service excellence
In March 2010, Caterpillar launched a service excellence campaign to measure and reward product support excellence within its EAME (Europe, Africa and Middle East) Cat dealerships.

In May 2011, at the EAME product support meeting hosted by Caterpillar in Malaga, Spain, Barloworld Finanzauto (Spain) was the only dealer to be awarded Gold Level in the 2010 Service Excellence Programme.

 
From left to right: Juan Aragon Matamela, Jorge Escamilla Santiago, Francisco (Paco) Jose Martos Lopez, Isabel Vicente Granda

CEO Awards 2011

Gordon Bussicott was named the 2011 Barloworld CEO Award winner

  Gordon, the SAP Implementation manager at Barloworld Equipment has lived the "Barloworld Way" with his commitment to all our stakeholders – our principal Caterpillar, his colleagues, the community and the environment. He has led the SAP project team since 2002 and has been successful in rolling out seven challenging major projects including driving his team's involvement in seven community projects each year.

The finalists
From left to right: Mike Chen, Guillermo Vega, Gordon Bussicott, Clive Thomson (CEO), Juan José Sanchez, David Rosillo, Ryan Hilligan. Inset – Natalia Shvenk.

Mike Chen, Financial Manager – Barloworld Corporate Office
Mike has added value since his appointment as financial manager. He has implemented many controls and systems to improve effectiveness within the accounts department and has played a very important role in our training programme for aspirant chartered accountants.

Barloworld Finanzauto, Spain, International mechanic team: Ángel Sáez Garcia, César Coyago Grijalva, David Rosillo Gallego, Eddy Moreno Alfonso Moreno Narciso, Guillermo Torres Acosta, Juan José Sánchez Santos: Sorin Szekely Sitea
In April 2010 Barloworld Finanzauto was contacted by South African construction company WBHO, an important Barloworld Equipment customer who needed a team of mechanics to support a Cat fleet in Sierra Leone. For the past year our team of seven has excelled on site in the Tonkolili region of Sierra Leone, ensuring achievement of all the planned objectives.

Natalia Shvenk, Mining Commercial Manager – Barloworld Equipment Russia (Vostochnaya Technica)
Since 2008, Natalia has shown commitment and tenacity in overcoming numerous challenges to meet customer demands and was part of the team that delivered a record result for VT and utilised her extensive network of contacts to dispose of excess stock during the economic crisis in 2009. Natalia has been closely involved in securing orders and successfully delivering major fleets to three of our largest customers.

Ryan Hilligan, General Manager representing the Nike team - Barloworld Automotive and Logistics
The supply chain solution provided by the Barloworld Logistics Nike Customer Service Centre (CSC) created a blueprint of excellence in the construction of a new dedicated facility, including the integration of various software systems, and managed Nike’s logistical requirements for the African Confederations Cup and the Soccer World Cup. They were awarded the Nike EMEA international award for best supply chain project as well as a platinum award at the South African Logistics Awards.

Guillermo Vega, Account Manager – Barloworld Handling, USA
After two years in an aftermarket role, Guillermo moved into equipment sales and set a record in unit sales for an individual account manager in the 2010 financial year. Guillermo earned the nomination for going above and beyond the call of duty every day in the workplace and using the same tenacity to help one’s community.