Human capital report

Illovo is a major source of employment for the many urban and rural communities in which it operates, offering direct employment through full, part-time and seasonal jobs across the spectrum of its agricultural and manufacturing activities. Our ongoing strategy of striving to be an employer of choice within the southern African agri-business sector is coupled with a commitment to continual investment in our people in order to sustain the business and to maintain our position as an industry leader. Our human resource philosophy is based upon equal opportunity, irrespective of race, religion or gender, and recognises excellence within our existing employee base to favour internal succession management.

Total complement of permanent and non-permanent/fixed contract (seasonal) employees
2014 2013
Permanent 5 679 5 480
Non-permanent 5 063 4 520
2014 2013
Permanent 1 015 1 043
Non-permanent 4 414 3 760
  South Africa
2014 2013
Permanent 2 224 2 150
Non-permanent 1 804 1 866
2014 2013
Permanent 1 213 1 229
Non-permanent 1 619 1 631
2014 2013
Permanent 908 870
Non-permanent 2 034 2 073
2014 2013
Permanent 1 917 1 873
Non-permanent 4 031 4 171
2014 2013
Permanent 16 16
2014 2013
Permanent 12 972 12 645
Non-permanent 18 965 18 021

Human resource management and associated operational strategies are determined by the business needs of the group’s operating entities with direction from the corporate office. These strategies appropriately embrace the macro-environment prevailing in each country of operation, with alignment being achieved through the group’s Strategic Intent. Ensuring that the operational strategies are met is a work ethic of continuous improvement which encourages focused, skilled employees to realise their full potential and to “make a difference” in their areas of operation.

The group’s values-driven leadership forms part of Illovo’s strategic advantage by creating a sustainable and vibrant organisation driven by motivated and enlightened leaders. The Illovo Values of Empowerment, Inclusiveness, Commitment, Accountability and Integrity represent what Illovo stands for and informs all that we do, across all our operations. Our leaders are entrusted with emulating and living these values through their behaviours on a daily basis. Since the initial unveiling of the values-driven leadership, numerous workshops, communication sessions and system and process alignment activities have taken place. As we continue to embed the Illovo values throughout the organisation in a process driven by our leaders, we know that they will continue to inspire and motivate others to follow in their footsteps.

Key areas of human resource focus include workplace safety; continuous improvement benchmarking; targeted manpower succession planning; talent and performance management; the maintenance of collaborative industrial relations; human resource development and business understanding; BEE-linked employment equity and localisation programmes; and the health and welfare of employees and their dependants.

Employment profile and statistics

We provide substantial employment with 12 972 people employed on a permanent basis and some 18 965 seasonal employees engaged on a fixed-term contract basis.

Our employment emphasis remains on ensuring diversity within both our local workforce and senior management positions in order to increase internal capacity building and promote the advancement of members of local communities. Members of our senior staff are appointed by executive management according to group policy guidelines and in line with specific country-based local hiring and employment equity/localisation policies.

Talent and skills development

The group’s values underpin its people management strategy and define leadership characteristics framing an organisational culture of openness and integrity. Employees are encouraged to participate fully in their areas of expertise and to take ownership of their development opportunities.

Another important area of talent management is the area of performance management as this is one of the key processes to achieve our annual objectives and the Strategic Intent. It requires all employees to take full responsibility of their own career development by ensuring that they establish and achieve their own annual objectives. Illovo has its own custom-made performance management system that helps to drive this process across all its operations. Results from the financial year ending March 2014 indicated that 83.6% of management employees went through a formalised annual performance review. In terms of retaining and deploying employees, a structured approach to career reviews leads to individual career and development plans, contributing to both the succession and retention of key personnel.

We continue to focus on talent management and manpower succession planning to develop and retain managerial and technical skills, especially within our identified key disciplines and positions. This is considered an essential enabler for our business to deliver on its current business targets as well as its longer-term sustainability and growth. The group’s talent management programme lends structure to this process and ensures we have a talent pipeline to provide the required number and quality of managers and specialists for operations.

A variety of employee training and development strategies, as represented in the bar chart above right, have been deployed, being an investment across the group of approximately R73 million over the year under review. This represented 3.5% of the group payroll and involved 29 346 permanent and non-permanent employees.

Group-wide programmes during the year under review included:

  • structured formal technical trainee programmes and apprenticeships, with 73 and 114 employees respectively enrolled in such programmes across the group;
  • management development programmes, aimed at first-line to upper management, with 83 managers having completed these;
  • leadership programmes, conducted in partnership with business schools, targeting high potential middle, senior, general and executive managers identified via the succession planning process, with 45 managers having completed these;
  • six-month rotation of early and mid-career graduates between Illovo and AB Sugar’s other businesses, with four graduate engineers having been deployed in China, Spain and England, while a number of graduates from those countries experienced development opportunities within Illovo;
  • the provision of full bursaries to 37 students to further their tertiary education with a view to inclusion into the Management Trainee Programme upon successful completion of their studies. In the year under review, at any given time, there were some 71 graduates progressing through this programme; and
  • successful implementation of assessments and personal mastery workshops aimed at developing our senior managers in line with the values. There were a total of 108 senior managers from across all our operations that went through this process.
Total complement by country, gender and age 2014
Age range Malawi Mozambique South Africa Swaziland Tanzania Zambia
Male Female Male Female Male Female Male Female Male Female Male Female
<30 615 102 95 16 253 124 72 20 89 16 193 39
30-50 3 892 137 468 119 1 004 316 663 120 448 55 1 205 144
>50 969 24 290 27 468 59 288 50 253 47 310 26
Total 5 679 1 015 2 224 1 213 908 1 917

Employee relations

Success in a competitive industry cannot be achieved without a motivated, committed and unified workforce that is focused on achieving common objectives. To this end, we strive to create an environment in which our employees feel valued and support the company’s values, strategies and priorities.

In Illovo, as a multi-national organisation, communication with our employees is considered an important criterion towards the building of their understanding of the company. To this end, we present an annual group-facilitated Business Understanding Programme to all employees, and in 2013/14, approximately 20 000 of our people were exposed to this programme.

With diverse and widespread senior management teams operating across six countries, regular communication forums and executive-led site visits are also undertaken. At group and country management team level, formal management forums are held, aimed both at reviewing operational performance and engagement in strategic planning processes.

In our observation of the UN Global Compact, and the ILO Declaration on Fundamental Principles and Rights at Work, we comply with internationally recognised labour practices as legislated in our countries of operation, ensuring that sound employee relations prevail. Freedom of association is acknowledged and where our employees have adequate representation, recognition agreements are put into place. Collective bargaining forums, which determine the levels of wage rates and other substantive employment conditions via negotiated collective agreements, are established in all countries of operation. The management of collaborative relationships with trade unions, along with open communication forums, allows for internal issues to be dealt with as effectively as possible, resulting in the company not losing any days to strike action in 2013/14.

Standard notice periods for employees are covered within the employment policy of each country of operation. Regarding operational restructuring, if applicable, the notice periods of the affected employees are determined with input from relevant employee representative bodies.

Trade union involvement is a normal part of this process and on average 89% of our non-management employees are unionised.

Training spend as a % of payroll  
  Malawi Mozambique South Africa Swaziland Tanzania Zambia
2014 4.3 2.1 3.9 4.0 2.2 3.2
2013 4.2 3.0 3.9 2.2 1.9 2.9


In the different categories, employee turnover was as follows for 2014    
Age range Malawi Mozambique South Africa Swaziland Tanzania Zambia
Male Female Male Female Male Female Male Female Male Female Male Female
<30 2.60 3.92 4.21 0 0 0 2.78 5.00 7.87 25.00 2.59 5.13
30-50 2.71 2.92 3.42 2.52 6.18 8.54 3.35 0.83 3.01 5.45 2.13 2.78
>50 7.64 16.67 4.48 22.22 12.82 6.78 7.29 4.00 11.07 2.13 13.55 7.69

(Rm) 2014 % 2013 %
Accommodation 119 49 85 52
Healthcare* 74 30 62 26
Education 27 11 18 11
Community 17 7 13 8
Environmental 8 3 5 3
Total 245 100 183 100

* The calculation of healthcare costs includes employee medical aid contributions paid by the company

Remuneration and benefits

Illovo’s remuneration packages are merit-based and market-competitive. These packages are reviewed annually, as are the range of short and long-term incentives such as performance-related bonuses, share purchase and phantom share schemes which are also offered to our people.

Aligned with our objective to be an employer of choice, we offer competitive wages, which exceed country-based standard minimum wages, and are determined through negotiations with relevant country labour unions, via collective agreements and bargaining councils. All labour-related practices are framed within the context of the ILO Decent Work Agenda, to which most countries of operation are signatories.

some examples of additional benefits offered to employees
Retirement funds
  • Contribution towards post-retirement benefits (includes risk benefits such as death, disability and critical illness)
  • Predominantly on our sugar estates outside of South Africa, combined with associated utilities. The accommodation that we offer our employees and their families varies between formal staff housing, villages and hostel dwellings for fixed-term contract employees. The accommodation includes the provision of utilities such as potable water and electricity, together with day-to-day maintenance, eg sanitation management
  • The recent introduction of group minimum accommodation standards, as informed by the International Finance Corporation (World Bank) guidelines
  • Group-run primary healthcare clinics/hospitals (the use of which extends to employees’ direct dependants), or medical aid/insurance
  • Public health services (provision of potable water and the proactive prevention of communicable diseases, eg malaria via co-ordinated spray and educational programmes)
Educational facilities/assistance
  • As part of our ongoing commitment towards social upliftment, our estates embrace community-based educational activities, extending from pre-school through to secondary school levels. This includes support for local projects to upgrade schools, such as classroom-building, and to provide assistance to improve school administration and management. In many instances, these entities are funded entirely by Illovo
  • Financial assistance with employee dependants’ education is available to eligible staff members. An allocation of bursaries, grants and loan funding for higher/further education is also administered in all countries of operation
  • Includes the provision of amenities such as potable water, sanitation, electrification, sewerage disposal and refuse removal
  • Estates provide club and community centres, estate community policing, sport and recreational facilities along with sponsorship

Illovo is a major source of employment for the many urban and rural communities in which it operates, offering direct employment through full, part-time and seasonal jobs across the spectrum of its agricultural and manufacturing activities. Average annual direct employment stands at approximately 32 000 people.

During the year, 29 346 permanent and non-permanent employees received training and/or attended development programmes, the cost of which amounted to R73 million and represented 3.51% of the group payroll.

We offer our employees additional benefits based on factors such as performance, or length of service. During the year under review, the group spent approximately R245 million on the provision of benefits to our employees, such as accommodation and amenities, healthcare, educational assistance and community projects.

These benefits, with a number of variations, are available to both permanent and non-permanent employees. The only exception, ie benefits which are not available to non-permanent employees, is educational assistance and membership of retirement funds.

Retirement funding schemes

In addition to the benefits of legislated national retirement funds, we offer membership of a number of provident and defined contribution pension funds. Elected employee trustees represent the interests of members and assist with the prudent management of the various funds. The benefits associated with our retirement schemes include, inter alia, retirement, death, disability, funeral, critical illness and life insurance.

Employee share purchase schemes

A share purchase scheme provides assistance to employees of our South African and Swaziland businesses to purchase shares in the company, providing them with the opportunity to share directly in the continued profitability and growth of the business. A separate share purchase scheme operates in relation to our listed subsidiary in Malawi for the employees of that company.

Employee health and welfare

Managed healthcare

Access to healthcare is provided to all our employees and their dependants, either through the network of group-run primary healthcare clinics and hospitals, or through the provision of medical aid/insurance schemes. Total spend on employee health in 2013/14 amounted to R74 million. Where no other public medical facilities exist, these services are extended to members of our surrounding communities at nominal cost. In support of these activities, the company also provides public health services not supplied by government such as potable water, sanitation and refuse removal, by upgrading these where deficient.

We operate 24 primary healthcare clinics and four hospitals, staffed with 10 full-time and nine part-time doctors, together with other clinical and auxiliary staff. The focus of the healthcare service is on health promotion, preventative services and primary healthcare.

Occupational health

Illovo Sugar operates in Least Developed Countries (LDCs) with significant developmental challenges. Providing a working environment in which our employees can operate in a healthy, energised and engaged manner is vital to maintaining personal development and to our business success. We strive to provide a workplace free from undue health risk emanating from our core activities. We also aim proactively to reduce workplace health risks by anticipating, assessing and managing health risk, and providing access to quality healthcare and educating, informing and empowering our management and staff to take responsibility for their own health and wellbeing.

Occupational health is a primary function of medical services delivered at all of our operating sites. Qualified nursing practitioners and doctors provide occupational health services. Employees who work in demarcated risk areas are subjected to base-line medical examinations on engagement and routinely monitored by the occupational healthcare staff during their career with Illovo. Our group medical consultant is engaged in matters of occupational health and safety and takes particular responsibility for ensuring that the more significant health hazards are appropriately managed in the workplace.

Occupational diseases

Occupational diseases are reported within the NOSA framework and are captured with the general safety statistics.

Communicable diseases

The group continues to take a proactive stance against life-threatening epidemics such as HIV and AIDS, tuberculosis and malaria and these are being managed, largely on a preventative basis, to negate their impact on the business and employees themselves.


Our business strategy is aligned with that of UNAIDS, referred to as the “Triple Zero” strategy of zero new cases of HIV; zero deaths among people living with HIV and AIDS, and zero discrimination. Our efforts are thus aimed at identifying and maintaining the negative status of the majority of our employees, determining which employees are HIV-positive and ensuring that they are on suitable medical management programmes, and work to reduce stigma and discrimination around HIV and AIDS. During the year, 1 498 employees were tested, of which 206 were found to be HIV-positive. This brings to 1 768 the total number of employees who are HIV-positive, of whom the majority are attending Illovo’s Wellness Programme and are receiving anti-retroviral therapy.


Tuberculosis is a focus of our medical services, particularly in areas of HIV prevalence. Our efforts are directed at prevention in HIV-positive individuals through prophylaxis and the early diagnosis and treatment of tuberculosis in employees. We continue to apply the successful Directly Observed Treatment Short-course (DOTS) strategy, which lends itself very well to workplace health services.


Malaria remains a key challenge at our operations in Mozambique, Malawi and Tanzania. We are confident that, building on our successes in South Africa, Swaziland and Zambia where we believe we have virtually eliminated malaria transmission on our estates, we will also achieve the same outcome in these countries. We have reviewed our integrated malaria control strategy at these operations and are implementing new programmes. We have been heartened by the success in Mozambique where we have entered into a public-private partnership with the government of Mozambique to extend the reach of our indoor residual spray programme to the surrounding community.

By way of example, we commenced the new malaria spray programme at Maragra in September 2012, but our impact only became evident in 2013. Using 2012 as the base year, during which 11 149 cases of malaria were recorded, we commenced our new spraying campaign in April 2013 and through to December of the same year, we sprayed 93% out of a possible 3 523 houses in which 10 546 people live.

As shown in the graphs below, the results of the campaign were significant, with recorded cases falling to 4 212 representing a 62% reduction overall. At a total cost of R8.77 per month per person, the results have encouraged us to continue and broaden the campaign, with ongoing support from government and non-government health authorities in Mozambique.

Other public health initiatives

Illovo continues to provide clean water and sanitation to employees living on company estates, thereby reducing the transmission of waterborne diseases. We continue to provide services in respect of maternal and child health, reproductive health and neglected tropical diseases, eg bilharzia.

Non-communicable diseases

Conditions and diseases such as obesity, high blood pressure, smoking, diabetes mellitus and various cancers are emerging healthcare issues in developing countries. We are implementing control programmes at all our operations in this regard.

Health and safety management systems

The NOSA Integrated Five-star System covering safety, health and environmental management is implemented at our cane growing and factory operations, all of which were accredited with a minimum Four-star NOSA rating during the year under review. Both Merebank and Glendale in South Africa have received Occupational Health and Safety Management System OHSAS 18001:1999 accreditation.

Occupational safety

Safety performance improvement remains a core priority focus, with ongoing initiatives around the group. Our goal is to achieve an increasingly safer workplace while promoting a culture of safety among staff so that injuries are reduced and safety rules are understood and upheld. Each operation has developed safety improvement strategies to ensure robust processes are implemented to manage health and safety. These processes are implemented in accordance with the statutory requirements of the relevant in-country occupational health and safety regulations, as well as group policies. Health and safety committees are active at each operation, with full staff representation, reporting directly to senior management to ensure compliance with all internal and legal requirements.

Our overall safety performance has shown a positive downward trend year-on-year with significant improvements achieved at some of our operations. In the 12-month-rolling period to 31 December 2013, the group achieved its lowest recorded disabling injury frequency rate of 0.10 and total injury frequency rate of 2.17. Overall, in the season under review, the number of disabling injuries reduced by 31% compared to the previous year. Company safety data is calculated on a “person-hours worked” (PHW) basis. In 2013/14, PHW amounted to 76.3 million man-hours as verified by our external safety audit service provider.

Regrettably, three of our own employees and two external contractors died while performing routine activities within our agriculture operations. These incidents, as for every fatality, were reviewed thoroughly in a robust incident-investigation process led by senior management, following which preventative measures were implemented and shared with operations across the group.

Most positively, our South African operations improved their annual 12-month rolling DIFR by 71%, reducing their incident rate from 0.54 in 2012/13 to 0.15 in the year under review. This significant improvement can be attributed to the successful implementation of the “Target ZERO” campaign, together with increased safety awareness and revised risk management structures. Examples of this best practice are being implemented across the group and we strive towards continual improvement and ZERO harm to employees.

We measure our safety performance using the industry standard DIFR, which is based on 200 000 hours worked. The DIFR rate includes lost-time injuries and restricted work cases where employees may not carry out their normal duties. The group DIFR ended at 0.11 which was an improvement from the 0.16 of the previous year and is well within the target of 0.35.

Operations that achieved a ZERO 12-month rolling DIFR:

DIsabling injury frequency rate
  2014 2013
operation Actual Target Actual Target
Malawi 0.11 0.35 0.14 0.4
Mozambique 0.09 0.09
South Africa 0.15 0.18
Swaziland 0.12 0.18
Tanzania 0.03 0.03
Zambia 0.18 0.18
Group 0.11 0.16

Diversity and equal opportunity

In line with the UN Global Compact Principle and the ILO Declaration on Fundamental Principles and Rights at Work, Illovo is not only committed to the principle of upholding the elimination of discrimination in respect of employment and occupation, but is also committed to eliminating the effects of past discriminatory practices in this regard.

To realise fully the growth of our organisation, we work towards ensuring that our workforce sufficiently reflects the demographic profile in terms of race and gender of the economically active population of the regions in which we operate. While abiding by local laws and regulations, we actively promote equal opportunity and fair treatment in employment through the elimination of unfair discrimination. We also encourage inclusiveness with regard to human resource practices, irrespective of race, gender, nationality or religious affiliation in an effort to promote global diversity throughout our workforce. For instance, there is no arbitrary distinction on remuneration levels based on any of these grounds and any differentiation is based on objective grounds largely related to performance and market considerations, although in some cases, it is based on length of service as a product of past agreements with trade unions.

In South Africa, Illovo is committed to contributing to, and promoting, social transformation in the interest of nation building, most notably through the continued advancement of B-BBEE initiatives. Employment equity is a socio-economic and business imperative that strives to ensure that South Africans from all cultural backgrounds are able to participate in, and benefit from, the activities of the economy in a fair manner. We submit annual employment equity and income differential reports to the Department of Labour and the Employment Equity Commissioner respectively, which detail progress made in respect of the company’s Employment Equity Plan, a key pillar of our B-BBEE programme. Progress is monitored through a group Central Co-ordinating Forum which includes representation from local consultative forums at the various operations.

Relevant statistics in respect of designated employees are shown in the table below for the period under review and the preceding two financial years, with the table on representative areas being the most important as it reflects the current status, particularly with respect to trainees, highlighting a focus on the future.

Representative areas Designated %
2014 2013 2012
Senior management (SM) and above 45 47 44
Management, all levels 68 67 66
Skilled level 93 92 92
Management trainees 73 64 62
All trainees 93 90 84
Recruitment and promotions (SM and above) 39 68 63
Recruitment and promotions (management, all levels) 66 78 70
Recruitment and promotions (skilled) 96 99 89

We continue to give overall focus to designated appointments in the more senior levels of management.

In a new development, our B-BBEE performance in 2013 was measured against the new AgriBEE sector charter which recognises land ownership. Recognising our significant transfers of agricultural land to black people in the mid-1990’s, well before the introduction of the Employment Equity Act in 1998 or the B-BBEE Act and codes in 2003, we scored additional bonus points under the new “land ownership” element of the score card, resulting in our overall score rising to 75.30, which increased our rating from a level 5 to a level 3 company.

The component B-BBEE verified scores
  Score (%) Maximum possible score (%)
Element 2013 2012 2013 2012
Ownership equity n/a 4.69 n/a 20
Land ownership 25 N/A 20 N/A
Management control 4.81 4.02 10 10
Employment equity 5.59 7.27 10 15
Skills development 11.06 6.84 20 15
Preferential procurement 7.84 17.27 20 20
Enterprise development 10 15.00 10 15
Socio-economic development 11 5.00 10 5
Aggregate 75.30 60.09 100 100

In addition to the improved score, Illovo was also assessed to determine if the company met the status of an “empowering supplier” in terms of the new B-BBEE codes which, although not yet applicable, are already being applied. An empowering supplier is one which meets at least three of the criteria indicated below, of which we met all four:

  • at least 25% of cost of sales excluding labour cost and depreciation must be procured from local producers or local suppliers in South Africa;
  • 50% of jobs created are for black people, provided that the number of black employees since the immediate prior verified B-BBEE measurement is maintained;
  • at least 25% transformation of raw material/beneficiation which includes local manufacturing, production and/or assembly and/or packaging; and
  • at least 12 days per annum of productivity spent in assisting black EME (exempt micro-enterprises with annual revenue of R5 million or less) and QSE (qualifying small enterprises with annual turnover between R5 million and R35 million) beneficiaries, to increase their operational or financial capacity.

Human rights

We are distinctly aware of the diverse cultures and the differences in laws, norms and traditions which the business needs to acknowledge and respect. Illovo is guided by the values of the international community, in particular the UN Universal Declaration on Human Rights, the UN Global Compact Principles, the ILO Tripartite Business Declaration of Principles concerning Multinational Enterprises and Social Policy, the ILO Core Conventions on Labour Standards, and the ILO Declaration on Fundamental Principles and Rights at Work.

As reported in the Corporate governance report and the Social and Ethics Committee report, in upholding international norms, Illovo supports and respects the protection of internationally proclaimed human rights and endeavours to ensure that we are not complicit in human rights abuses. We do not tolerate discrimination of any kind, nor any form of forced or child labour. We take measures to address the risk of child and forced labour in our supply chain though engagement with the ILO to provide guidance, by requiring our suppliers contractually to undertake to adopt a zero tolerance approach to these. In the year ahead, educational programmes and awareness initiatives will be implemented with grower associations and other suppliers, to inculcate a culture in our supply chain that promotes human rights and is committed to abolishing child and forced labour and other human rights violations. Fairtrade audits assist us to monitor and embed compliance with these imperatives.

We strive to provide fair working conditions and maintain a safe and healthy working environment. Open communication is encouraged to resolve workplace issues between team members or between our employees and management. Where employee issues cannot be resolved by direct line management, these are taken up through various dispute resolution mechanisms. Permanent employees receive training in these values, which include unfair discriminatory practices and employee and trade union rights, as part of induction upon commencement of service. Human rights principles are also included in Illovo’s labour relations policies pertaining to safety, health and environment, and corporate social responsibility.

In South Africa, human rights abuses are monitored by the South African Human Rights Commission, under the auspices of the Human Rights Commission Act, No 54 of 1994. Outside of South Africa, communications relating to human rights abuses are generally directed through the relevant labour unions.

The company has a robust, independently managed anonymous reporting facility, Tip-offs Anonymous, which employees and people outside the group may utilise to report any wrong-doing anonymously.

In order to embrace best practices, we participate in the training sessions conducted by the UN Global Network South Africa and the National Business Initiative (NBI) in relation to the implementation of good human rights practices in our operations, business relationships and supply chain. The knowledge acquired from this training is implemented into policy development and practical embedding of human rights practices by the company.

During the year under review, no incidents of discrimination, limitation or violation of employees’ rights to exercise freedom of association and collective bargaining, or of forced, compulsory or child labour, were reported by any Illovo employees or any other persons. There were also no violations of the rights of indigenous people, and none of the operations were identified as posing any significant risks in this regard.

Values-driven leadership

The group’s values-driven leadership forms part of Illovo’s strategic advantage by creating sustainable and vibrant organisation-driven leadership by motivated and enlightened leaders.