South Africa seems to be getting close to broad representation in the workforce — 80.7% of economically active people are black African, as are 72% of employed people in the public and private sectors.
But there are differences higher up, towards top management — and between the private and public sectors, especially at the top end.
This is the key finding of new public interest research by Cape Town-based research company 71point4 and the Bureau for Economic Research. Their report analyses the annual EEA2 reports filed between 2016 and 2022 by employers defined as “designated”. The EEA2 reports provide a breakdown by race, gender and occupation as required by the Employment Equity Act.
“The issue of transformation can be difficult to engage with productively, and so we think it best if we ground that engagement in data,” says 71point4 manager Illana Melzer.
Given that unemployment is arguably South Africa’s biggest crisis, the information is a critical addition to official labour market data.
For 2022, the data covered 27,502 firms and 7.21-million employees, because only larger firms must submit EEA2 reports. All government departments and state-owned enterprises are meant to comply as well, but many don’t; according to the EEA2 data, there are only 1.2-million government employees, compared with Stats SA’s official tally of 2.6-million.
“To the extent that the missing entities show similar patterns in terms of transformation to the entities that do report, the EEA2 data may be significantly understating the transformation picture,” says Melzer.
One striking finding is that in the private sector, on average, only 36% of professional employees in designated firms are African, compared with 73% in the public sector. At senior management level 21% are African, compared with 73% in the public sector, and at top management 14% are African compared with 71% in the public sector.
Large corporates which employ 2,000 or more employees have higher rates of transformation: 42% of their professional employees, 25% of senior managers and 21% of top managers are African.
Even after 30 years, our education system remains appalling, and it is not difficult to draw a straight line from that to outcomes in the workforce
— Illana Melzer
The gap between the private sector’s numbers and the country’s demographic profile is less stark when the recruitment pool at the top end is limited to those who are 40 or older and have a university degree. This is the pool from which managerial staff are typically drawn; only 55% are African even though they make up about 80% of the economically active population.
“Even after 30 years, our education system remains appalling, and it is not difficult to draw a straight line from that to outcomes in the workforce,” says Melzer.
This helps explain why, in 2022, between 97% and 99% of all temporary, unskilled and semi-skilled government posts were filled with workers from designated groups (African, coloured or Indian). In the private sector the range (92%-95%) was not far off. The gap between the private and public sectors starts widening only at the level of skilled designated (or black) workers — 91% of employees at this level in the public sector are black, against 78% in the private sector.
Comparing data from 2016 and 2022, the study finds significant upward movement in the proportion of black people employed in the private and public sectors at higher levels.
For instance, whereas in 2016 49% of professionals in the private sector were black compared with 84% in the public sector, by 2022 the private sector had narrowed this gap to 58% vs 87%.
At a senior management level, private sector firms raised the proportion of black employees from 34% in 2016 to 42% in 2022, and at a top management level, the ratio climbed from 25% to 32%.
However, the public sector continued to maintain its lead over the same period by pushing the ratio in its top two management layers up into the high 80s. It achieved this despite just under 70% of people who are 40 or older and have a university degree being black.
The EEA2 data does not reveal the age of employees. “That would be so useful at top and senior management level,” says Melzer, “because that would give us a sense of the opportunities that should be opening up at that level as older (and whiter) employees exit the labour market.”
The study also finds significant upward movement in women’s representation. In 2022, women made up 26% of top management and 37% of senior management positions, up from 22% and 33% in 2016. Even so, women remain underrepresented in the public and private sectors.
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