Having completed what CEO Richard Pike calls a "fourth wave of empowerment", recruitment and training group Adcorp Holdings clinched first place in the 2008 Top Empowerment Companies (TEC) survey. Last year, Adcorp was placed second, but this year its overall score of 81,69 pushed it into pole position.
"We see empowerment not as an event, but a journey," says Pike.
The company's inclusion of women in its shareholding and management structure has contributed significantly to the improvement of its score from 73% last year. This is because the new BEE codes issued by the department of trade & industry come with a gender adjustment principle, which allows companies to earn bonus points when they include women interests in their BEE initiatives.
Seeing that BEE was mostly benefiting a few individuals, mainly black men, the revised BEE codes imposed the 50% gender adjustment principle. That means every target across all the seven elements of the broad-based BEE scorecard must encompass 50% gender bias. Adcorp has taken the gender principle to another level.
"About 80% of our employees are women," says Pike. "And our transformation strategy has involved helping staff to participate in the ownership of the company, which has meant more women are economically involved."
Adcorp's ownership score was boosted by its high level for voting rights for black women and the economic interest held by black women in the company. This is part of the reason why Adcorp earned two bonus points, giving the group a total of 22 ownership points. The ownership element commands a 20% weighting in the broad-based BEE score with a maximum of 20 points. But then a further three points are available to companies who go out of their way to include designated broad-based BEE and women groups in their BEE dealings.
Adcorp introduced broad-based black groupings into its ownership structure through its 2007 empowerment deal. The R512m deal delivered 25% of Adcorp's issued shares to a consortium made up of Women Investment Portfolio Holdings (Wiphold), Simeka Group and an Adcorp employee share incentive trust. Wiphold landed a total of 8,7% of Adcorp's shares. More than 50% of Wiphold's shareholding is owned by or for the benefit of black people and 60% is owned by women. Simeka got 6,52% of Adcorp shares in last year's transaction. The employee share incentive trust, which will benefit about 1 500 Adcorp employees, gained a 10% stake. More than 50% of the employee scheme beneficiaries are black.
This transaction left Adcorp with black voting rights and economic interests of 32%, of which 31% is due to black women interests. Adcorp still has some way to go in terms of transforming its top management, though at lower levels more than half of the group's management is black.
Pike admits that a deal in which the group sold its Graphicor and Simeka TWS Communications businesses removed some of Adcorp's black management from the main group, though it did boost the company's enterprise development score. A consortium headed by divisional director Thendo Ratshintanga paid R13m for the two businesses and formed a new company called Tshirundu Communications. Adcorp agreed to help fund the transaction and to provide ongoing management support to Tshirundu Communications as part of its enterprise development strategy.
Adcorp's 2006 annual report's employment equity figures show that 40% of the total staff complement of 1 810 are black women.
But what sets the group apart is its strong performance across all measures of the scorecard particularly on the procurement, enterprise development and socioeconomic development measures. The company scored full marks on all three.
"It's not often that we see companies performing so well across all aspects of the scorecard," says Empowerdex project manager Stephen Hawes.
Adcorp began its empowerment journey in the early 1990s. The company previously had two empowerment shareholding structures at operational level in two of its subsidiary companies, Adcorp Communication Solutions (ACS) and Adcorp Flexible Staffing Solutions (AFSS). Adcorp disposed of ACS operations in 2006 and re-acquired a 25% interest in AFSS, which was owned by a consortium comprising the Black Management Forum Investment Company (BMFI), Zungu Investments and Vunani Capital Holdings. Campbell Bomela, who was BMFI MD, has remained with Adcorp and is the executive director in charge of BEE.
Last year's R512m empowerment deal also boosted black representation within Adcorp's ranks. Wiphold's Louisa Mojela, Gugu Dudu and Tryphosa Ramona were appointed to the Adcorp board.
"Most of our work is in financial services, ICT and the public sector - all early initiators of empowerment charters," says Pike. "So we started adapting our strategy early to meet demand."
One of the main growth drivers in the recruitment industry has been the increased demand for affirmative action candidates across sectors, as companies race to comply with BEE targets.
"The balance in the market has shifted away from a constraint in new employment positions to a constraint in candidate availability," says Pike.
He says because Adcorp is focused on the development of people and staff, skills development plays an important role in the company's empowerment strategy. Pike says the call centre environment has significant job creation potential and Adcorp has numerous initiatives in this area. Adcorp is also active at blue collar level with warehousing, packers, pickers and nursing staff.
Adcorp commits 1% of its annual profits to corporate social investment (CSI). These funds are channelled into the support of agricultural projects, specifically vegetable gardens in disadvantaged communities. Adcorp's projects help unskilled and semiskilled unemployed people in these areas and, where practical, preference in the transfer of skills is given to women. Each project is designed to be self-sustaining within two years, operating as individual micro-enterprises.
"We want to up the ante on our CSI initiatives," says Pike. "We want to provide bursaries to students with potential."
Adcorp is listed on the support services sector of the JSE, which comprises a range of companies, from environmental waste management, security and cleaning, to skills development and human resources companies.
Adcorp owns a portfolio of premium brands in the business of human capital management services. These include permanent staffing operations like DAV, Premier Personnel and Jobvest. There is also a contractual staffing division that includes operations like Quest, Capital Outsourcing Group and Emmanuels Advance. The group has almost doubled its revenue base over the past five years, from R1,5bn in 2002 to R2,7bn in 2006 through organic growth and strategic acquisitions. As a staffing operation, empowerment is almost a natural feature in the group's line of duty.
