Transformation hinges on skills availability

Business Opinion Published

South African banks and financial services companies are steadily shifting their ownership into black hands, in line with the industry’s empowerment charter, but they are still struggling to train — and retain — black managers.

This is a worrying weakness in the transformation of the financial services industry in SA. The progress that the industry has made in terms of changing its ownership, and providing financial services to disadvantaged South Africans, is laudable, even though there will always be — sometimes justifiable — calls for the banks and others to do more, better and faster.

But, unless the industry can secure a cadre of young black managers and professionals to lead it in coming years, any progress in its transformation will only be temporary. And, in the long term, this will threaten the sustainable growth of the country’s sophisticated financial services industry, a competitive advantage for SA in international markets. Without necessary skills, no industry can grow and thrive.

It bears repeating that employment equity programmes, especially in a growing industry such as financial services, does not mean the exclusion of whites with skills and experience from the advancement of their careers in companies.

In this week’s edition of Business Times, we report on a draft version of the financial sector charter’s annual review. The final report is due for release tomorrow. As with all these things, the devil is in the detail. Too many of the transformation targets are proving to be hard to measure, or there are no clear targets to achieve.

Average direct black ownership of the institutions that submitted returns to the charter council rose to 17.78% from 16% a year ago — well on track to the 25% ownership by 2010 set out in the charter.

According to the report, the banks are also doing relatively well in recruiting black executives. However, they fell short on the recruitment of junior and senior managers.

No doubt this will be grist to the mill of the Black Management Forum which has argued that companies often do not invest enough in appropriate training and support for young black managers. While there may be some truth to this, it is also a reality that the country’s education and training system is failing to produce the necessary skills to support faster economic growth.

The financial services industry has provided the money for many of the empowerment deals that are transforming the economy. Its transformation is essential to the success of empowerment in SA.