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Human Capital Report

Number of employees down 4% to 11 563 (2016: 12 037)
In South Africa black employees comprise 93% of total employees (2016: 93%)
Female employees account for 73% of total employees (2016: 72%)
Employee turnover increased to 17% (2016: 16%)
Employee turnover at Truworths head office unchanged at 10% (2016: 10%)
R105 million invested in skills development (2016: R107 million)
11 386 employees trained (2016: 11 721)

In the current constrained retail trading environment Truworths’ human resources department has focused on maintaining its investment in training and development, and other practices aimed at attracting and retaining employees, and enhancing employee engagement and satisfaction levels.

Management has focused on consolidating the significant changes to human resources practices in recent years. One of the priorities has been to enhance the understanding of the new remuneration package structures to ensure employees maximise the value from their remuneration packages and make informed decisions following the transition to total guaranteed packages (TGP).

The introduction of TGP is one of the factors that has contributed to maintaining labour turnover at acceptable levels at head office.
The extension of benefits to longer-serving flexi-time staff in the previous reporting period has contributed to a reduction in labour turnover among this group from 37% to 30%. While labour turnover at head office has been stable in the reporting period, retention of key employees remains an area of risk especially in the current difficult trading environment.

The Truworths workforce comprises a core component of full-time roles and a larger component of flexi-time employees whose hours are dependent on demand. The number of full-time and flexible positions has been reduced through natural attrition and this has enabled Truworths to avoid retrenching staff. Management will continue to follow responsible and cautious staffing strategies to ensure that Truworths remains a stable employer for the many loyal and high-performing employees in the business.

Truworths’ human capital at a glance 2017 2016
Total employees 11 563 12 037
   Full-time employees 5 267 5 364
   Contract employees* 160 99
   Flexi-time employees 6 136 6 574
Full-time employee turnover (%) 17 16
Full-time employee absenteeism (%) 1.9 1.8
Skills development expenditure (excluding levies) (Rm) 105 107
Skills development spend per employee trained (R’000) 9.3 9.2
Total employees trained 11 386 11 721
Black employees as a % of employees trained in South Africa (%) 96 94
* Contract employees include interns and post retirement contractors

VALUES

The Truworths business philosophy and values underpin the human capital management strategy and have been central to guiding the business through the current challenging trading environment. These values are incorporated into everyday working life at Truworths, from recruitment to training and development, employee relations, recognition programmes and performance appraisals. The performance appraisal system has been amended to simplify the process and improve the balance between hard and soft performance metrics, including the extent to which employee behaviour is aligned to Truworths’ values.

EMPLOYMENT EQUITY

The Employment Equity Plan 2014 – 2019 guides the Truworths strategy to transform the Group’s South African employee base to reflect the demographics of the country and ensure that the workplace is free of discrimination. As an equal opportunity employer Truworths focuses on investing in talent and recognising excellence, with employees being encouraged to realise their potential regardless of race or gender. Refer to the Social and Ethics Committee report and the Social and Environmental report (available at www.truworths.co.za/investors) for information regarding the role played by the Transformation Committee.

Truworths met its annual employment equity plan targets for 2017 and continued to make steady progress in aligning the staff profile to regional and national demographics, although it remains a challenge to recruit black talent at senior management level. The focus therefore remains on developing internal talent to demonstrate commitment to sustainable transformation. The success of this approach is reflected in black representivity at junior management levels being 87% and 40% at middle management level. We are on track to meet our 2018 quantitative targets and affirmative action objectives.

Gender representation shows 73% of employees are female and this is evident across all levels up to middle management, while 40% of senior managers are female. Truworths is committed to improving representivity, and facilitating the accommodation and career progression of differently-abled people who currently comprise 1% of its workforce.

There were no referrals of unfair discrimination or employment equity compliance orders in the reporting period.

TALENT AND SKILLS DEVELOPMENT

Truworths continued to demonstrate its commitment to developing talent linked to the succession requirements of the business. This commitment is confirmed by the skills development element of the Broad-Based Black Economic Empowerment(BBBEE) scorecard , on which more detail is available in the Social and Environmental report (available at www.truworths.co.za/investors). The investment in training was R105 million (2016: R107 million) and 96% of staff were trained during the period.

The merchant graduate training programme continues to attract the top talent from fashion design colleges and tertiary institutions owing to its reputation as one of the most comprehensive programmes in the industry. This programme ensures that the business has an adequate pipeline of talent for scarce roles in the merchandise division, with 86% of the current merchants having progressed through this programme.

Additional funds have been invested in the bursary programme to ensure that Truworths continues to attract top talent and enhance employee retention, while achieving its employment equity and transformation objectives.

The learnership programme provides a pipeline for entry level positions and through collaboration with the Wholesale and Retail Sector Education and Training Authority, 1 124 (2016: 1 374) people were registered on accredited programmes in the reporting period. We have absorbed unemployed learners into flexi and full-time roles either post or during their learnerships, thus impacting the number of learnerships we were able to offer in the January 2017 intake.

As most training programmes are developed and run internally, Truworths is able to achieve economies of scale in its training initiatives and also protect its intellectual capital in the highly competitive retail market.

Mobile and video technology has been successfully rolled out to deliver training programmes to stores. This has resulted in us being able to speedily roll out high-impact, short, targeted training interventions to a multi-sited audience. We are also able to assess real-time which employees have completed their learning initiatives and the degree to which the training initiative has been understood through assessments that form part of our e-learning suite.

EMPLOYEE REMUNERATION

The achievement of Truworths, team and individual performance remains central to driving remuneration strategies.
All management and specialised full-time employees are now on TGP, which enable these employees to tailor the structure of the ratios of benefits to suit their personal lifestyles.

The percentage of staff that receives retirement benefits has increased from 41% to 59%.

The remuneration of executive and non-executive directors is covered in the Remuneration Committee report.

TRADE UNION RELATIONSHIP

Truworths concluded annual wage and substantive negotiations with the South African Commercial, Catering and Allied Workers Union (SACCAWU) for the 2017 period as has been the case for every year of the relationship agreement since 1990. SACCAWU represents 10% (2016: 7%) of all South African employees. Membership of SACCAWU has been stable for many years but this year has seen an increase in membership in the bargaining unit from 16% to 22%. The growth in union membership has been in business units where we converted flexi-time roles to full-time roles over the last two years. Union membership amongst our flexi-time employees has traditionally been low as they do not form part of the bargaining unit and this may partially account for the increase in membership in this group.

All employees are made aware of their right of freedom of association, including the right to belong to a union of their choice. There is no material union membership in other African operations and therefore Truworths only has a relationship agreement with SACCAWU.

Despite the difficult labour negotiating climate this year no time was lost to internal industrial action. However, the business has been impacted by industrial action in the external environment, specifically protest action related to transport.