Lifestyle offers keep workforce happy

Africa seems largely untouched by the current economic slump, at least as
far as recruitment and retention go. Some companies provide benefits such as
staff hospitals and schools for the children of employees, reports Alan Hosking

The global economic slowdown has not affected staff recruitment or retention
in Tanzania – at least not as far as John Aclan, managing director of De Beers
diamond mine in Tanzania, is concerned: "When I advertise for staff I get
killed in the rush," is how he bluntly puts it.

When recruiting local nationals in Africa, the law of supply and demand
allows employers to be highly selective. There are simply more people than
jobs. When Aclan assumed responsibility for the mine, he had to reduce its
staff from around 1,400 to just fewer than 500 to ensure the operation’s cost

Such actions put the balance of power in the employer’s hands, which means
local nationals can be recruited quite cheaply. But ‘cheap’ is a relative term.
Because of inherited employment practices that are rooted in paternalism, Aclan
provides a full range of benefits to local employees which include a school for
their children and a fully functioning hospital for staff and their families.

The lack of good healthcare and other infrastructures in Africa has led most
large multinational employers to provide such facilities for their staff. The
coin has two sides: one involves social responsibility and good corporate
citizenship, and the other is a business imperative to ensure a workforce’s
health and well-being, enabling the company to meet its production targets.

A substantial skills gap typically exists between local and expatriate
employees, therefore recruitment and retention practices differ for the two
groups. Expats in Africa are attracted not only by financial rewards but also
by lifestyle factors, enhanced for most with a ‘six weeks on, two weeks off’
clause in their contracts.

South Africans are particularly keen to work elsewhere in Africa as they can
earn US dollars and adjust to life fairly easily in an African country for a
two-year contract. Locals, on the other hand, are attracted simply by the
opportunity to earn a living.

Locals fall into one of three categories: Unskilled (the majority); those
who have a few basic skills acquired from local job experience; and those who
have been fortunate enough to have been educated elsewhere, such as in the UK,
US or South Africa, and who have also gained working experience in a developed

Highly skilled locals are attractive to employers because of their expertise
and knowledge of local customs, cultures and languages, and are therefore more
likely to have greater job mobility. Unskilled and semi-skilled locals depend
heavily on their employers, and are less likely to have job mobility.

In Africa’s more remote locations, employers provide considerable
infrastructure, such as schools and hospitals for their employees, so the
concept of ‘one job for life’ is not too unrealistic – at least for locals.

When Aclan first took over the De Beers mine he also found himself
responsible for running much of the town in which his employees lived. He took
steps to privatise shops, for instance, and other measures to encourage
entrepreneurial activity.

Statistics from a 2001 economic survey in Kenya indicate that the domestic
economy’s poor performance in 2000 adversely affected employment creation in
all sectors. In such an environment, HR directors are not under pressure to
focus on retention strategies.

Locals in Kenya face further grim prospects in the wake of the global
economic situation, restructuring initiatives in both the private and public
sector as well as businesses downsizing or even closing. As a result, local
workers will take what little work there is. Thousands of university graduates
with what are referred to as ‘baroque degree certificates’ who cannot be
absorbed into the severely constrained job market are also roaming the streets
in search of any kind of work. These ‘baroque’ qualifications are often awarded
in obscure and out-of-date fields, and are effectively useless in today’s
business world.

A much-discussed trend in the Middle East involves the targeting of certain
nationalities to fill specific job categories. In a region where there is still
a strong demand for suitably qualified IT professionals, recruiting and
retaining them appears to be a science of its own because of the complex and
heterogeneous information contained in systems being built. The IT recruitment
industry apparently refers to such hard-to-find people as ‘purple squirrels’.

The trend to recruit from specific nationalities is based on several

– because different countries use particular software which makes it easier
for nationals from that country to operate a company’s systems

– for communication reasons – where specific language skills such as French
or Arabic are required

– for financial reasons – in that people from the west are inclined to be
more expensive than their counterparts from the east

– because the company may already be employing a large number of nationals
from a particular country who may resent nationals from another country being
taken on.

With regard to retention in the Middle East, the main reason given by IT
professionals for remaining with a company was the opportunity to take part in
‘interesting, challenging and experience-gaining projects that have concrete

Pay depends a lot on a company’s size. Two people from different companies
who have the same responsibilities could easily have very different packages if
one is employed in a government or multinational organisation and the other in
a small- or medium-sized business.

According to Arnett and Associates, the ‘menu’ approach to expat
remuneration packages that can include a long list of allowances and benefits,
even to the point of compensating an expat for money lost in the sale of the
family car, is changing.

Pressure to reduce costs has resulted in expatriates being allocated a sum
of money that can be used in whatever way the expat feels appropriate. This has
shifted the contracts away from the ‘don’t worry, we’ll take care of
everything’ approach to ‘you’re going to have to play your part in making this
a success’.

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