Social performance

Recognising our people

We recognise that our people play a fundamental role in achieving sustainable business success. Our broad-based approach to the management of our people – which includes defined strategies to attract and retain talent, enhance motivation amongst staff and increase attention to positioning the Group as the chemical sector’s employer of choice – is crucial to the sustainability of Omnia.

Employee turnover dropped significantly to a five-year low of 10% during the period under review.

Remuneration policy

The Group’s remuneration policies are integral to our retention strategy. To remain competitive, remuneration is benchmarked against the broader industry, and revised annually through internal mechanisms such as Remuneration Committee meetings, as well as discussions at industry bargaining unit forums.

In addition to competitive salaries and benefits, we offer short-term incentives such as performance-based commissions and bonuses. Short-term incentives for senior management are based on an economic value added (EVA) formula. EVA incentives are calculated as a percentage of EVA the Group generates annually and then pooled, with allocations rolled over a three-year period.

Developing talent

Training and developing our current and potential workforce are cornerstones of our strategy. In addition to ensuring a pool of motivated, skilled employees, building individual capabilities contributes fundamentally to more sustainable societies. Development initiatives are underpinned by a focused effort to identify and address specific training needs at every level. In addition, these initiatives are aimed at entrenching a culture of lifelong learning and giving our people the life and technical skills they require to succeed in a rapidly changing world.

Ongoing learning is facilitated through a range of initiatives and includes on-the-job training, in-house development projects and financial assistance for external studies ranging from Adult Basic Education and Training (ABET) to post-graduate degrees.

The identification and development of talent within the Group is an established principle and part of Omnia’s advocacy of a learning culture. Underpinning the learning culture is a dedication to encouraging discussion, forming partnerships to solve problems and mentoring programmes to facilitate personal development.

The Group value proposition of leveraging intellectual capital to provide differentiated products and services finds expression in the offering of training and development opportunities available to staff at all levels within the organisation.

Impacting on training is the new National Skills Act, which came into effect during 2009, and the establishment of the Quality Council for Trades and Occupations (QTCO), which will see the enforcement of work skills plans being required in terms of the new Organisation Framework of Occupational Codes that replaces the previous occupational categories.

Although this requires that Omnia will need to review its training initiative, significant progress has been recorded in the training and development of employees.

During 2010, the average number of training days recorded across the Group increased from 4,5 days to 6 days per employee. Our training days target per employee has until recently been 5 days; however, benchmarking against international companies as well as our counterparts within the chemical sector indicated that this target should be reviewed. A best-practice benchmark is deemed to be a 7 to 10 day target per employee.

2,5% of the leviable payroll was spent on training (compared to 2,18% in 2009). According to the DTI BBBEE Codes of Good Practice, the target for training of black employees is 3% of the leviable payroll. We have adopted the 3% target across the board for training spend on all employees, regardless of race.

The split of training costs and training days between black and white employees are reflected below:

Training hours by category and training spend during the period under review compared to the prior period were as follows:

Training spend

Training and development initiatives during the year included:

	The skills development section of the BEE verification audit was completed and submitted to Empowerdex for auditing. Based on the information supplied for verification purposes, Omnia reached a target of 6,8% – which exceeds the BBBEE target requirement that learnerships awarded to black employees must represent 5% of total headcount.
	The Group provided financial assistance through bursary programmes for tertiary education at universities and tertiary institutions in disciplines ranging from accounting, agriculture and engineering to information technology, marketing and general business management. BME, achieved its target of having at least seven students studying various engineering disciplines and ended the year with eight students, one of whom has joined BME in a permanent capacity. The Group recruited three new students in the IT and engineering fields of study, whilst a chemical engineering student, supported by Protea Chemicals, completed her studies and has joined the Chemicals Division in the Western Cape. 15 external bursary students, seven of them black, will continue their studies in 2010.
	Omnia has facilitated the training of 47 artisans, of whom 45 representing various disciplines were employed with Omnia Fertilizer. Accredited as a training site for artisans, Omnia Fertilizer qualified 10 artisans during the year. In addition, 22 chemical operators achieved National Qualifications Framework (NQF) Level 3 and 4 accreditation. Several workplace experience grants were made available, enabling employees with practical “on-the-job” experience to work towards formally recognised qualifications.
	Protea Chemicals facilitated a process that enabled 16 employees, of whom 14 are black, to undertake NQF Level 3 qualification studies for general management.
	Across the Group, 105 employees, of whom 88 were black, participated in learnerships during the period under review.
	Financial assistance for part-time studies was extended to 157 employees (compared to 133 employees in 2009), of whom 55% were black. The students registered for diploma and degree qualifications in management development, logistics and supply chain management, engineering and financial disciplines.
	Registered as a Training Outside Public Practice (TOPP) provider for accountants by the South African Institute of Chartered Accountants (SAICA), Omnia focused on providing training that meets the exacting requirements of the accounting industry. During the year, due to the loss of one student and the failure of another to make sufficient progress in two calendar years, the TOPP acceptance criteria were amended to include a minimum entrance qualification for new students of a Certificate in the Theory of Accounting (CTA). Four black male students who met this requirement were enrolled as TOPP students.
	Training offered through the Omnia Academy of Learning, which is overseen by senior management, has been expanded. The Academy is tasked with the delivery of training developed within Omnia to meet the specific demands of the business and ensuring that knowledge is transferred across the Group to enhance skills and company service levels.
	Personal skills development courses offered through the Academy of Learning continued to be well supported by employees, and included modules on management, personal and inter-personal effectiveness, selling skills, presentation skills and finance for non-financial managers.
	Qlikview, originally developed as a business information tool for financial reporting, has been expanded and is now used to provide a high level of transparency and integrity in the management of human resources information. The expanded Qlikview now also covers equity reporting by measuring ratios of appointments and actual headcount. In the BEE Skills Development Matrix, it assists in identifying the additional, secondary costs associated with managing the BME Training Centre optimally.
	Besides the Nutriology® curriculum training introduced in 2009, a new supply chain course covering an introduction to sales and operations training and demand forecasting has been developed to inculcate skills required by the Quality Assurance Division (QAD) in the area of demand management. The intake of employees on holistic Nutriology® training was curbed during the year because of the number of employees already trained during the previous reporting period. Developed by the Omnia Agriculture Division to create a favourable soil environment and manage the life cycle of crops to increase production and improve farmer profitability, the Nutriology® training is instrumental in creating a strong, sustained relationship between Omnia and its agricultural customers.

Developing leaders

The Omnia Leadership Development Programme (LDP) was established in 2009, in conjunction with the GIBS Business School at the University of Pretoria, to promote the development of a strong leadership cadre within Omnia. The initial offering at GIBS included a Fundamental Management Programme and a Programme for Management Development, both of which were completed in May 2010. A graduation ceremony will take place in August 2010, where we expect to see 24 students, of whom 13 are black, graduate from the Fundamental Management Programme, and a further 29, of whom 12 are black, from the Programme for Management Development.

As an integral part of both programmes, students were expected to complete “Action Learning Projects”. These projects, undertaken by syndicate teams comprising at least six Omnia employees each, were required to address problems or challenges within the company. Each team was expected to suggest solutions to the identified business challenge and present their findings to Omnia senior management. A professional GIBS coach assisted the teams through the entire problem-solving exercise.

Managing and monitoring performance

Managers conduct regular sessions with their staff to discuss performance, training and career paths, and to ensure that they receive continuous and relevant training. The spirit of these sessions is one of jointly finding ways to maximise performance and ensure appropriate career development.

Industrial relations

Trade union membership has remained constant at about 33% of the permanent South African workforce of Omnia. Membership is spread across five unions, with the largest union representing 14% of the workforce.

During negotiations around the 2009 wage increases, two of the four participating unions, the Chemical, Energy, Paper, Printing, Wood and Allied Workers Union (CEPPWAWU) and the General Industries Workers Union of South Africa (GIWUSA), called a national strike which lasted for 10 days but did not garner the support of all union members.