Academic journal article SA Journal of Human Resource Management

Investigating the Turnover of Middle and Senior Managers in the Pharmaceutical Industry in South Africa

Academic journal article SA Journal of Human Resource Management

Investigating the Turnover of Middle and Senior Managers in the Pharmaceutical Industry in South Africa

Article excerpt

Introduction

Employee turnover is experienced by all organisations at one point or another, with reported rates varying from country to country, between industries, as well as between and within companies (Mobscot Corporation, 2011). The common nature of staff turnover does not underscore its importance and the deleterious effects that high turnover can have on organisations (Glebbeek & Bax, 2004), particularly when it involves knowledge workers. In an age where knowledge is a commodity, skilled knowledge workers, particularly in management positions, are the competitive advantage that organisations depend on for future success (Samuel & Chipunza, 2009) and their increased turnover has an adverse effect on productivity and profitability (Chiboiwa, Samuel & Chipunza, 2010). Across the globe, high staff turnover is a cause for alarm (Morris, 2010), not only because of the costs associated with recruitment, selection and training, but also due to the increasing scarcity of experienced talent to replace that which is lost (Selome, 2008).

In South Africa, employment, retention and turnover occur against the backdrop of a history of discrimination and inequality and attempts by government and organisations at redress. The Employment Equity Act (Republic of South Africa, 1998) and the Black Economic Empowerment Act (BEE) (Republic of South Africa, 2003), together with the sectoral charters, outline the various BEE targets for particular industries in order to facilitate transformation. It is argued by many that the high demand for specialised skills, together with key pieces of legislation that aim to address the demographic imbalances in the corporate landscape in South Africa, has resulted in an increase in staff turnover, particularly amongst knowledge workers (Kotze & Roodt, 2005; Vass, 2010). Further, inequality in the quality of education as a result of apartheid has caused a shortage of skilled black professionals, resulting in increased demand and high mobility of these individuals (Robinson, 2004). It is perceived that this high mobility further slows the rate of transformation in companies (Wocke & Sutherland, 2008).

Researchers and popular media alike have suggested that the regulations and skills shortages have jointly had a negative influence on the economics of the labour market in South Africa (Heymann, 2010), providing an unfair advantage to the designated groups1, further perpetuating high turnover amongst these groups.

Globalisation has introduced many multinational players to the South African business context, who bring with them international practices and global mobility for knowledge workers. In a survey of major South African companies, turnover as a result of global mobility was the cause in 21% of the total turnover (Bennet, 2003).

Purpose

The pharmaceutical industry in South Africa is saturated, with multiple players in the field (The Economist Intelligence Unit, 2010). Most of the multinational organisations found in large markets around the world have a presence in South Africa, with only four local companies being listed on the Johannesburg Stock Exchange (JSE, 2011). The sector is knowledge intensive, requiring senior employees not only to be technical experts in a given field, but also to have the ability to manage often complex situations (N. Guliwe, personal communication, 02 March, 2010). These positions are critical in that they are the ones that execute strategy and ensure the smooth running of operations. However, the skills required to fill these positions are scarce (Van Zyl, 2009), resulting in an intense war for talent and increased staff turnover (Sanofi-Aventis, 2010). The critical nature and the low availability of this talent often means that vacancies remain open for long periods of time with companies absorbing the costs and loss of revenue associated with the vacancies (B. Letsoalo, personal communication, 07 April, 2011). There is also an under-representation of black people at management levels in the pharmaceutical industry: less than 20% of senior management are black (Pharmaceutical Task Group, 2010). …

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