How clover creates value and reporting on the six capitals
- How Clover creates value today
- Overview of Clover’s value creation process
- Reporting on the six capitals
- Clover’s business model
- Human capital
- Natural capital
- Manufactured capital
- Intellectual capital
- Social and relationship capital
- Financial capital
- How Clover sustains value for Tomorrow
- Clover’s future value creation philosophy
- Human capital
- Natural capital
- Manufactured capital
- Intellectual capital
- Social and relationship capital
- Combined Assurance
Human Capital
How Clover creates value today: Human Capital
The prevailing economic climate required ongoing focus on human capital to ensure optimal utilisation of people in the context of the evolving business strategy.
The workforce responded well to the demands placed on it which is testament to the commitment of employees to the business.
Clover is benchmarking its human capital processes against best practice to ensure that we:
- Optimise the performance culture in the business.
- Develop and grow all employees.
- Design the employee experience for engagement, productivity and growth.
- Create a competent and diverse workforce.
- Establish a pleasant, healthy and motivating work climate.
Clover’s human capital strategy is regularly revisited and aligned with the business strategy. Focus areas during the past year included the following:
FOCUS AREAS
legislative compliance
Ongoing initiatives were undertaken to ensure legislative compliance. Corrective action was taken to ensure compliance with “Equal pay for work of equal value” legislation. Ongoing adjustments had to be made to manage overtime hours worked. Clover continued with its efforts to keep employees informed about anti-competitive behaviour and Competition Commission requirements.
attraction and retention of employees
All aspects relating to the attraction and retention of employees were revisited. A non-cash recognition policy was approved and salaries were benchmarked to ensure that they are market-related and in line with Clover’s remuneration policy. Over and above a general retention strategy for critical positions, Clover is in the process of finalising a specific retention plan for identified employees who have the potential to progress to senior management levels.
CHANGE OF LABOUR LANDSCAPE
The changing labour landscape, resulting in a multi-union environment has added new complexities to the business, a stable labour environment has been maintained. Given the increase in levels of union engagement it is anticipated that there will be a greater demand on resources to manage labour relations. Specific actions were launched to upskill management to deal with the demands of this changing landscape.
productivity
Various initiatives to improve productivity were launched during the past year. A number of these initiatives impacted on employees through business restructuring. Staffing levels in the Commercial division were reviewed without negatively impacting service levels. The Gauteng distribution operation was streamlined which resulted in efficiency improvement and cost savings. Further productivity initiatives involved the mothballing of the Bethlehem factory; the closure of the distribution centres located in Kimberley and Upington and the opening of a distribution centre in Kuruman which is better placed to service the region.
alignment of employees
Increased focus on performance management has contributed to improved alignment of employees. During a summit, the management group together with sales and marketing personnel were exposed to the broader company strategy and business unit specific action plans. This forum also served to energise and mobilise personnel towards Clover’s Way Better approach and mindset. The short-term incentive scheme has been modified to be more heavily weighted towards the Group’s results to ensure better alignment with shareholders.
learning and development
Clover acknowledges the need for ongoing investment in learning and development. Emphasis is therefore on training that improves job-related skills and competencies that will prepare employees for management and leadership positions in the company. Despite the constrained economic environment, the upskilling of personnel at all levels remained a focus area. Use was made of the range of grants and funds available from the state.
Equipping our employees with the right skills remains a high priority. With this in mind the Company has invested in training and development as follows during the year:
| Intervention | 2017 | 2016 | 2015 | 2014 | 2013 |
| Number of employees trained | 2 526 | 2 786 | 2 601 | 2 127 | 1 953 |
| Total training spend per year (R’000) | 16 435 | 16 070 | 13 486 | 8 337 | 7 965 |
| Training spend per total number of employees per year (R) | 1 882 | 1 902 | 1 657 | 12 98 | 1 215 |
| Number of man days spent on training | 12 632 | 12 845 | 15 306 | 6 705 | 4 627 |
| 2017 | 2016 | 2015 | ||||||
|---|---|---|---|---|---|---|---|---|
| Intervention | Total employees | Black employees | Total employees | Black employees | Total employees | Black employees | ||
| Number of employees trained | 2 526 | 2 155 | 2 786 | 2 102 | 26 01 | 2 167 | ||
| Number of employees enrolled on Learnerships, Skills Programmes and Apprenticeships | 701 | 567 | 608 | 454 | 455 | 380 | ||
| Number of employees on Formal Workplace Experience and In-Service Training Programmes | 41 | 40 | 30 | 28 | 24 | 21 | ||
| Number of bursaries (employed/ unemployed) granted for degree and diploma studies* | 9 | 3 | 21 | 9 | 26 | 12 | ||
| Value of bursaries granted for degree and diploma studies* (R) | 120 000 | 120 000 | 120 000 | 120 000 | 325 113 | 191 864 | ||
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workforce planning
On the strategic resourcing front, ongoing assistance has been provided with the structuring and manning of Masakhane. Clover has been working closely with the Government Technical Advisory Centre on this ‘Jobs Fund’ initiative. Substantial administrative and reporting requirements need to be met on an ongoing basis. The staffing of Masakhane not only presents new opportunities for existing Clover employees but also placement opportunities for the unemployed. Initiatives were launched to improve the company’s talent acquisition procedures. This is bearing fruit with an improvement in the time taken to fill vacant positions together with a reduction in recruitment costs during the period under review. Further development will take place in this environment and will require improved systems.
mergers, acquisitions and restructuring
As far as mergers, acquisitions and restructuring are concerned: the service conditions and benefits of Clover Milnerton (ex-Good Hope) employees have been aligned with those of Clover; a plan has been developed to align Clover Milkyway (ex-Nkunzi) salaries and benefits over a three year period. The creation of Dairy Farmers of South Africa (DFSA) as a separate company resulted in a Section 197 transfer of all Milk Procurement employees. All HR-related legal and administrative requirements in respect of this new business were finalised as per the project plan.
employment equity
Clover fully supports employment equity in the workplace and various measures are in place to contribute to our employment equity objectives. Consultation is taking place at Employment Equity Forums at different levels in the business. Clover continues to make progress in establishing a more diverse workforce profile. Numerical targets at junior and middle management level for the year under review have been met. Clover supports the relevant Codes of Good Practice and does not accept unfair discrimination of any type. The company purposefully strives to provide equal opportunities for employees to grow and develop, based on merit and ability. Clover’s employment equity policy clearly sets out responsibilities for different levels of management in managing employment equity.
innovation and technology
In the sphere of innovation and technology the detailed requirements of the Learning Management System (LMS) were scoped with a view of rolling out the system in the new financial year together with the following modules: recruitment; onboarding; talent management and succession planning. This will enable Clover managers to better manage these critical business processes in line with best practice. Options for improving communication at all levels via electronic platforms are being investigated.
Total number of employees and total female employees at June 2017
| Company | Permanent | Fixed term/temp | Grand total | Total women | % Women |
| Clover SA (Pty) Ltd. | 7 417 | 522 | 7 939 | 1 891 | 23,82 |
| Clover Fonterra Ingredients (Pty) Ltd. | 15 | 15 | 8 | 53,33 | |
| The Real Beverage Company (Pty) Ltd. | 130 | 130 | 31 | 23,85 | |
| Clover Waters (Pty) Ltd. | 58 | 2 | 60 | 12 | 20,00 |
| Clover Dairy Namibia (Pty) Ltd. | 102 | 5 | 107 | 17 | 15,89 |
| Clover Swaziland (Pty) Ltd. | 36 | 7 | 43 | 9 | 20,93 |
| Clover Botswana (Pty) Ltd. | 357 | 12 | 369 | 102 | 27,64 |
| Clover Milkyway (Pty) Ltd. | 60 | 10 | 70 | 31 | 44,29 |
| Grand total | 8 175 | 558 | 8 733 | 2 101 | 24,06 |
KEY HUMAN CAPITAL INPUTS
- Dynamic management team with significant experience in the FMCG and the dairy industry
- 8 733 Employees
- Ongoing reassessment of our Human Capital strategy to ensure alignment with an evolving business environment
- Learning and development programmes ensure an optimally skilled workforce
OUTPUTS OF OUR ACTIVITIES ON HUMAN CAPITAL
| 2017 | 2016 | |
| Total amount paid in salaries and wages (R‘000) | R1 910m | R1 826m |
| Total number of Employees (and Contractors) | 8 733 | 8 949 |
| Percentage of Employees operating in SA | 94,1 | 94,6 |
| Percentage of permanent employees | 93,6% | 94,5% |
| Percentage of employees who are women | 24,06% | 23,7% |
| Percentage of employees who belong to a trade union | 50% | 48,73% |
| Employee turnover | 7,25% | 7,98% |
| Total number of person hours worked | 20 682 090 | 20 921 940 |
| Total number of employees trained | 2 526 | 2 786 |
| Percentage of employees trained in SA | 100% | 100% |
| Rand value of Training spend | R16 435m | R16 070m |
| Percentage of training spend in SA | 100% | 100% |
| Days lost to absenteeism | 55 853 | 53 122 |
| Days lost to industrial action | 0 | 1 337 |
OUTCOMES OF OUR ACTIVITIES ON HUMAN CAPITAL
- Rising expertise at all staff levels in preparation for new technologies, more efficient systems and internal transformation
- Reskilling and realignment of Human Resource function
- An efficient and motivated workforce, aligned to the businesses objective
Employee turnover for permanent employees
| 2017 | 2016 | |||
|---|---|---|---|---|
| Company | Total who left |
% | Total who left |
% |
| Clover SA (Pty) Ltd. | 537 | 6,65 | 555 | 7,21 |
| Clover Fonterra Ingredients (Pty) Ltd. | 1 | 6,67 | 2 | 15,38 |
| The Real Beverage Company (Pty) Ltd. | 19 | 12,67 | 23 | 18,40 |
| Clover Waters (Pty) Ltd. | 2 | 3,13 | 2 | 4,44 |
| Clover Dairy Namibia (Pty) Ltd. | 53 | 33,97 | 34 | 34,00 |
| Clover Swaziland (Pty) Ltd. | 4 | 10,00 | 10 | 29,41 |
| Clover Botswana (Pty) Ltd. | 31 | 8,14 | 35 | 10,42 |
| Clover Milkyway (Pty) Ltd. | 4 | 4,35 | 13 | 12,75 |
| Grand total | 651 | 7,25 | 674 | 7,98 |
Total number of person hours worked (PHw) |
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| Company | Permanent | Temporary | Gross man-hours Jul 16 to June 17 | Absent days* | Nett total man-hours for 2017 | Nett total man-hours for 2016 |
| Clover SA (Pty) Ltd. | 17 690 205 | 1 147 185 | 18 837 390 | 1 842 736 | 16 994 654 | 17 396 944 |
| Clover Fonterra Ingredients (Pty) Ltd. | 33 345 | 0 | 33 345 | 4 116 | 29 229 | 27 404 |
| The Real Beverage Company (Pty) Ltd. | 291 915 | 3 315 | 295 230 | 34 139 | 261 091 | 258 000 |
| Clover Waters (Pty) Ltd. | 129 090 | 3 900 | 132 990 | 8 679 | 124 311 | 104 736 |
| Clover Dairy Namibia (Pty) Ltd. | 241 605 | 8 580 | 250 185 | 19 086 | 231 099 | 227 028 |
| Clover Swaziland (Pty) Ltd. | 82 485 | 10 920 | 93 405 | 5 284 | 88 121 | 91 660 |
| Clover Botswana (Pty) Ltd. | 826 605 | 13 650 | 840 255 | 64 933 | 775 322 | 682 736 |
| Clover Milkyway (Pty) Ltd. | 177 840 | 21 450 | 199 290 | 11 216 | 188 074 | n/a |
| Grand total | 19 473 090 | 1 209 000 | 20 682 090 | 1 990 190 | 18 691 900 | 18 788 508 |
No man-hours lost due to strike activity
*All leave types included
Percentage of permanent employees who belong to a trade union
| 2017 | 2016 | |
|---|---|---|
| Company | % | % |
| Clover SA (Pty) Ltd. | 51,09 | 48,00 |
| Clover Fonterra Ingredients (Pty) Ltd. | 0,00 | 0,00 |
| The Real Beverage Company (Pty) Ltd. | 40,00 | 36,80 |
| Clover Waters (Pty) Ltd. | 68,97 | 66,67 |
| Clover Dairy Namibia (Pty) Ltd. | 19,80 | 33,00 |
| Clover Swaziland (Pty) Ltd. | 0,00 | 0,00 |
| Clover Botswana (Pty) Ltd. | 44,26 | 57,01 |
| Clover Milkyway (Pty) Ltd. | 46,67 | 37,20 |
| Grand total | 50,01 | 48,73 |
