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Thinking about cloud? Things to think about from a human capital perspective

cloud based HR

The Deloitte ‘Resetting Horizons Human Capital Trends 2013’ report highlights talent and performance management as two of the key trends impacting HR and organisations. The report calls for a more integrated approach to the managing of HR, as well as an understanding the value HR can add to the organisation. HR leaders are extolled to think like economists when managing the allocation of talent (a scarce commodity in the current global environment). This means that HR should not only focus within the organisation in terms of managing human capital, but also turn their attention outwards.

Being able to understand the impact of the broader economy and diverse factors such as workforce demographics, infrastructure development, technology trends will be critical in terms of adding real value to organisations. The open talent economy is another key trend highlighted in the report, the composition of the workforce in any large organisation has shifted over the decades from a predominantly full time workforce to one that comprises a mixture of full time, part time, freelancers and increasingly people with no formal ties to the organisation.

The growing drive to provide HR business partners with the tools they require to support such a shifting workforce is being met with an explosion in the availability and capability of cloud based HR solutions.

Click here to download the article

If you have any questions or require a more detailed discussion around cloud-based HR solutions, feel free to contact Jack Sellschop at jsellschop@deloitte.co.za and Lyle Cooper at lcooper@deloitte.co.za

As One – Better collaboration where it counts the most

asone

As any frustrated executive can vouch, the best plans count for naught if they are not implemented. Yet what exists, other than gut instinct, to inform leaders’ decisions around organisational engagement?

This Deloitte Review article discusses three conditions that have emerged consistently in the study among organisations where large numbers of people collaborate effectively. One (or more) of these three conditions was absent in every case of organisational failure in the study. These conditions include:

  1. Belong: People collaborate on behalf of organisations they feel connected to.
  2. Believe: People collaborate when they commit to carrying out specific actions.
  3. Behave: People collaborate when they share a common understanding of how things are done.

While these three factors do not in themselves amount to an answer key to the complex problem of collaboration across large organisations, they provide a basis for charting a course in what is typically a journey of ambiguity.

Download the full article . . . .  As One – Better collaboration where it counts the most

If you have any questions or would like to learn more about As One, contact Gert de Beer at gedebeer@deloitte.co.za

Secure your organisation’s future with a sound post-merger integration strategy

post merger integration

by Jane Viljoen (Manager in Deloitte Corporate Finance) and Bianca Apker (Senior Manager in Deloitte Corporate Finance)

“The deal is won or lost only after the deal is done.” (1)

Deal value is not only based on share prices and financial performance but also includes the extent that performance targets like cost synergies, cross selling, know-how transfer, implementation efficiency and social compatibility are met. Studies of post-merger performance show that only 17% of deals create significant value, 33% have created marginal value and 50% have destroyed value.

The majority of these merger failures are due to poorly executed integration and transaction errors, with the former comprising the majority. Research suggests that common integration errors include:

  • Inadequate integration planning
  • Lack of Programme leadership
  • Lack of a formal and fast decision making process
  • Lack of executive alignment on merger rationale
  • Too much time spent on organisation politics
  • Loss of focus on everyday operations
  • Merger synergies not driven through quickly enough
  • Customers getting forgotten

Therefore, one of the key factors to a successful transaction is to construct a detailed Post Merger Integration (“PMI”) strategy to explain how the merged entity is going to integrate, operate, grow and prosper.

PMI is defined as: “The part of the merger process, following the closing of the merger agreement itself, in which the assets, personnel, and business activities of the two companies participating in the merger are combined. The post-merger integration may take between a few months to multiple years after the merger agreement is signed.” (2) Inconveniently, a PMI strategy is not a generic pre-packaged product that can be purchased on-line and rolled-out on a repeat basis. Each transaction is unique and requires a particular strategy to meet the numerous and often competing pressures that a newly merged organisation must respond to such as returning value to shareholders and investors; keeping the business going if not growing; integrating two distinct working cultures; satisfying existing customers; and maintaining labour relations and productivity. (3)

“Companies are good at buying businesses but not good at integrating them. The challenge after signing is greater as that before.” (4)

A successful PMI strategy should typically focus on three key areas notably: clarity of purpose; control over the integration process and people management. (5) All of these key areas have the objective to ensure that the business functions successfully from Day One onwards.

  • Clarity of purpose involves establishing a “blueprint” as early as possible which enables a clear understanding of the rationale for the merger across all the areas of the business as well as to identify the sources of synergy and a timeframe put in place to achieve them. Further, strong leaders are selected to manage the entire process during this stage and a clear vision of how the entity should look on Day One is essential
  • Control over the integration process involves ensuring that the integration process does not divert attention from managing day to day operations. This can be achieved by making planning and reporting frameworks as practical as possible; tackling risks and issues quickly and making the tough decisions early.
  • People management involves removing uncertainty and ambiguity by implementing the new organisational design as quickly as possible. Further it involves identifying and recognising cultural differences at an early stage and implementing strong communication channels.

“PMI underscores the success of mergers. Culture and synergy management is critical, as are the right people, actions and plans because you only get one shot at getting it right.” (6)

If you have any questions or require a more detailed discussion on your post-merger strategy, contact Jane Viljoen at javiljoen@deloitte.co.za or Bianca Apker at bapker@deloitte.co.za

(1)   “Post Merger Integration, A successful combination,” Deloitte, 2012.

(2)   The Business Dictionary, http://www.businessdictionary.com.

(3)   Tom Fairley, “Post Merger Integration, Do you have a plan,” Taylor Vinters Solicitors, 2010.

(4)   Chairman FTSE 100, “When the ink dries, who is driving the post-integration process?,” Deloitte, 2012

(5)   Deloitte Viewpoint, “When the ink dries, who is driving the post-integration process?,” Deloitte, 2012.

(6)   “Post Merger Integration,” Roland Berger Strategy Consultants, 2011.

CEOs expect HR to play a more active role in enabling business strategies

HR business partnering

For a decade now, HR has been undergoing a process of transformation. For many organisations however, this process has increasingly failed to produce the results expected of it. During these times of rapidly changing economics, HR is faced with a stark choice. It can either evolve and make a significant contribution to the business or be diminished and dispersed into the business and other functions.

At today’s leading organisations, talent is becoming entirely integrated into business strategies, capital investments and operations. Human capital issues command increasing attention and, in some cases, has become a permanent fixture on board agendas. Senior business leaders consider talent to be perhaps the critical factor in the push for sustainable growth and the need to manage new opportunities and risks in a more complex – and interdependent.

Read the full article . . . .  Why CEOs expect HR to play an active role in enabling business strategies

For more information, contact Jack Sellschop (Director and HR Transformation Leader) at jsellschop@deloitte.co.za and Gareth Evans (Senior Manager and HR Transformation Centre of Expertise Leader) at garevans@deloitte.co.za

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Results of the Deloitte Snap Fraud Survey 2013

identity theft

In support of the Association of Certified Fraud Examiners’ International Fraud Awareness Week from 3 – 9 November 2013, we have prepared various articles relating to fraud. This is the third article, written by Bruce Thornton (Associate Director, Forensic), which presents the results of a snap fraud survey conducted by Deloitte.

Deloitte recently conducted a snap fraud survey. We have presented highlights from the survey and an infographic which reflects all the results:

  • Only 30% of the respondents who knew of fraud occurring within their organisations stated that the fraud was committed by an employee. Surveys performed across the globe have all highlighted the fact that employees are the prime perpetrators of fraud; therefore 30% is a very low statistic.
  • The two industries hardest hit by fraud are Financial Services (no surprises) and Technology Media and Telecommunications (big surprise). Globally, the industries hardest hit by fraud (apart from Financial Services) are in the Mining and Oil & Gas sectors.
  • The vast majority of respondents felt that management set the right tone at the top. This is at odds with global trends.
  • There is general consensus that there is a direct link between a global economic slowdown and the instances of fraud.
  • Cybercrime in South Africa is not yet seen as a major risk

View the infographic . . . .  Deloitte Snap Fraud Survey 2013 Infographic

If you have any questions or require a more detailed discussion, contact Bruce Thornton (Associate Director, Risk Advisory, Forensic at Deloitte & Touche) at bthornton@deloitte.co.za

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Development of black managers crucial to growth of South African economy

black management forum

by Sandile Gwala, Executive Director at Deloitte South Africa

The development of black managerial talent and leadership for both the public and private sectors is crucial to the growth of the South Africa economy and future entrepreneurs. Thus the opportunity to become a knowledge partner to the learning day at this year’s Black Management Forum Conference was one we took up without hesitation.

Skills development forms part of the Deloitte ethos and has seen the firm being recognised by industry bodies such as the Association for the Advancement of Black Accountants of SA (ABASA) as a leading producer of black chartered accountants for many years in a row.  We believe in producing skills for the firm’s own talent pool and for the broader economy – because we have to play our part in developing skills for South Africa.

The Deloitte corporate social investment budget is solely focused on supporting skills development initiatives. In addition to our CSI budget, Deloitte also spends in excess of R20 million a year on tertiary education bursaries. Our alumni also sit at the upper echelons of the auditing and other professional services organisations – the auditor general, parastatals and parts of the private sector.

It is at the back of this passionate commitment to skills development that we found the call by the President of the BMF, Bonang Mohale, to reconfigure its annual conference and incorporate a learning day as a timely and important call.

Some of the BMF managers are destined to be top global industrialists, top executives in multinationals, leading CEOs of JSE listed entities as well as senior managers and directors in government and state owned enterprises.

We believe managers will be more impactful when they are instinctly aware of the social challenges around their organisations, know how to use data better in their environment, are more informed on how they can govern responsibly in their organisations, and have more insight on how they can protect their organisations data from various types of risks.

Empowering black managers with broader managerial expertise and social awareness will advance transformation and enable them to remain transformation agents themselves and not miss opportunities provided by their own managerial positions.

At the conference, the break-away groups will learn and explore three topics in line with the theme of  Can Good Governance Increase Trust: Data Analytics; Cyber Crime and effective managers who advance good governance. We will present our content in an interactive manner based on practical examples.

There will also be a plenary panel of captains of industry, including a JSE Non-executive director, the public protector, an official in the Office of the President’s planning and monitoring and evaluation departments and other state-owned-company CEOs who have successfully driven governance turnaround journeys.

Deloitte has had a corporate membership with the Black Management Forum (BMF) for decades and always looks forward to its annual conference and corporate update dinner. The Deloitte association with the BMF was also cemented by their long standing advisor and associate, the late Lot Maduke Ndlovu, who was the former MD and president of the BMF.

If you are interested in attending the Black Management Forum Conference, click here to register on the BMF website. We will also be providing updates from the conference on social media. You can monitor updates on the 23rd October on Twitter by following the #BMFConf2013 hashtag or @DavidGrahamSA on Twitter.

 

Four strategies to develop and retain talent cost-effectively

Four strategies to develop and retain talent

Trends essentially indicate the need for stronger leadership and management and the need for better ways to develop talent faster and more cost effectively

Results of the Talent Edge 2020, launched by Deloitte, indicate that respondents anticipate greater executive leadership shortages over the next several years than any other talent category in their companies.

They also rank leadership as their most pressing talent concern. Trends essentially indicate the need for stronger leadership and management and the need for better ways to develop talent faster and more cost effectively.

Here are four strategies to cost-effectively develop and retain talent in your organisation . . . . click here to read more

If you would like to have a more detailed discussion relating to talent development and retention strategies, contact David Bischof at dbischof@deloitte.co.za

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Deloitte call for comments on the Draft Employment Tax Incentive Bill

draft bill

The Draft Employment Tax Incentive Bill was released for public comment on 20 September 2013. Deloitte will be preparing commentary on the Draft Bill and invite you to submit your commentary to Izak Swart at iswart@deloitte.co.za or Newton Cockcroft at ncockcroft@deloitte.co.za by no later than 8 October 2013.

The Draft Bill aims to incentivise the employment of young, first time workers between the ages of 19 and 29 earning less than R6 000 per month (R72 000 per annum).

The concept of an employment tax incentive was first announced by the President in his 2010 State of the Nation Address; and in the 2010 Budget. It is proposed that employers who are registered to withhold and pay tax on behalf of their employees (PAYE) will be eligible to decrease the PAYE employees’ tax that is payable for hiring qualifying employees by the incentive benefit.

This employment tax incentive is expected to commence on 1 January 2014, for employment commencing after 1 October 2013, and will be available until 31 December 2016.

Qualifying employees

It is proposed that a qualifying employee is a person who meets the following requirements:

  • The employee must be in possession of a valid South African identity card
  • The employee must not be less than 19 years old and more than 29 years old
  • The employee and the employer must not be connected persons as defined in section 1 of the Income Tax Act
  • The employee’s salary must be between the minimum wage for that specific sector and R6 000 per month, with a minimum of R2 000 per month applying where no sectoral determination is applicable
  • The employee is not a domestic worker as defined in section 1 of the Basic Conditions of Employment Act, 1997

The employment tax incentive is also available to employers operating through a fixed place of business located within a Special Economic Zone (SEZ), designated industries as well as certain public entities as nominated by the Minister of Finance by notice in the Gazette. Age limitations will not be applicable here.

Supporting documents (click on the titles below to download the documents)

Call for comments

Deloitte will be preparing commentary on the Draft Bill and invite you to submit your commentary to Izak Swart at iswart@deloitte.co.za or Newton Cockcroft at ncockcroft@deloitte.co.za by no later than 8 October 2013. You may also contact Newton Cockcroft on +2711 806 5298 or Izak Swart on +2711 806 5685.

Factors that will shape the future of competition between countries and companies

manufacturing for growth

The Future of Manufacturing report identified a number of factors that will shape the future of competition between countries and companies. Three areas rose to the top as the most critical: human capital and talent development; innovation and technology advancement; and strategic use of public policy emphasizing collaboration between policy-makers and business leaders.

This Manufacturing for Growth series addresses these key competitive factors and comprises of three volumes:

Appendix (Country Policy Comparisons Framework) compares tax, energy, and environmental policy instruments for the six focus countries discussed in Volume 1.

Click below to download:

Strategies for Driving Growth and Employment

Video posted with permission from the World Economic Forum.

If you have any questions or require a more detailed discussion, contact Karthi Pillay at kpillay@deloitte.co.za

 

 

The Chief Executive Officer’s guide to talent management

talent management2

What Is Talent Management?

A CEO we talked to told us that while he couldn’t provide statistics linking talent management to performance, he partially attributed his company’s growth from $6.4 billion to more than $10 billion over four years to the exceptional quality of his people. The company, a leading provider of medical devices, has seized opportunities ahead of some of its competitors. One of the crucial elements of this company’s success: This CEO spends about half his time on talent management.

Yet we still talk to senior VPs of human resources every day who complain that their CEO still treats talent strategy as an afterthought, failing to grasp both how it supports the CEO’s plans for the business and his or her role in steering its course. And while we talk to CEOs who know talent management needs to be a personal strategic priority, they seem unsure about the best path for their own company.

The changes in the global economic landscape over the past few years have no doubt fed this uncertainty, as CEOs have confronted the need for their organizations to change course, re-evaluate long-term plans, and reorder strategic priorities. While executives have had to try to figure out what their organizations need, and need to be in the future, it has become apparent that nobody really knows what the future will look like.

However, we contend that the rise and ebb of the global economy has provided an invalid template for executives when it comes to talent: Economic growth and contraction are cyclical; the need for talent is not. The war for talent that received so much attention over the past decade did not go away during the global recession. As author Claudio Fernández-Aráoz pointed out in a December 2009 column in BusinessWeek, the number of managers “in the right age bracket for leadership roles” will shrink by 30 percent by 2015. He also warned that the global war for talent is “being ignored in many C-suites.

On the other hand, CEOs who make strong commitments to talent management—like the CEO of the $10 billion company we cited above—are the ones who find their organizations best positioned to execute their business strategies and ensure long-term viability and success.

In these pages we will demonstrate the importance of talent management to meeting your strategic goals and taking your company to the next level. What’s more, we’ll offer some straight talk about what you need to know and what you may not have thought of, and show you what critical roles you need to play.

Download the full article . . . .  The CEO’s Guide to Talent Management

To strengthen the capabilities of your mid to senior level leaders and high potential leaders, Deloitte offers Business Impact Leadership which will enable them to confidently meet the critical leadership challenges that they need to master. Contact us to structure the most relevant solution to meet your current business objectives.

The Deloitte Human Capital Talent Management team is happy to answer any questions you may have and will welcome a more detailed discussion with you around your talent management requirements. Feel free to contact Julie Rautenbach at jrautenbach@deloitte.co.za

We invite you to subscribe to our weekly email where we introduce topical Deloitte articles to a targeted audience and to join the Deloitte South – Human Capital group on LinkedIn

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