Twelve Winds provided a detailed model of the predicted impact of HIV/AIDS on he workforce and profitability of Alpha Cement, including recommendations of how to mitigate that impact.
Apha Cement (now part of the AfriSam and LafargeHolcim groups) is the leading black-controlled construction materials group in southern Africa. Founded in 1934, the company is one of the most widely spread cement groups in the southern African region, with operations in South Africa, Botswana, Lesotho, Namibia and Swaziland. AfriSam employs nearly 2,000 staff members and almost 1,000 contractors.
Like many other large South African employers, Alpha Cement was increasingly concerned about the impact that the growing HIV/AIDS epidemic was having on its workforce. As the epidemic increased, the firm wanted to have a clear understanding of the financial and human impact of the disease, so they could implement the most appropriate company-wide mitigation strategies.
As the leading expert in the actuarial analysis and workforce management of HIV/AIDS, Twelve Winds was asked to conduct a full impact review and make strategic recommendations.
Twelve Winds took a four-phase approach to the HIV/AIDS impact analysis and recommendations for Alpha. This included workforce assessment, KAP survey, and balanced scorecard.
1.0 Workforce assessment
Broad impact The HIV/AIDS epidemic will severely impact upon Alpha as an employer as well as the way in which it functions as a business entity.
1.1 Corporate risk profile
Twelve Winds uses its proprietary actuarial models to project the most likely prevalence and impact of HIV/AIDS on companies such as Alpha Cement. In order to select the risk profile most appropriate to Alpha Cement, we briefly reviewed several demographic factors that have the most bearing on HIV prevalence. These include the age structure, gender breakdown, income levels, regional breakdown and racial breakdown of the workforce. Further detail on these risk factors is provided below. In more detailed analyses, usually provided for very unique or unusual workforces, we would consider a variety of other demographic characteristics. These include, amongst others, marital status, family sizes, educational levels, nature of work, migration patterns, etc.
1.2 Employee benefits
HIV/AIDS affects the pre-funding of retirement benefits, the insurance of death and disability benefits, and the cost of health benefits. Accordingly, the various components of an employee benefits programme were considered together in order to arrive at the most satisfactory solution. In keeping with the principle that employee benefits should be non-discriminatory, yet remain economically viable, we produced an overview of Alpha’s current employee benefit arrangements, highlighting the potential cost impact due to HIV/AIDS and recommending appropriate courses of action. The various areas where HIV/AIDS would have an impact were analysed, including, but not limited to the following:
• Increased costs of risk benefits such as group life and disability
• Impact on funding for the member’s retirement and the cost of employer contributions
• Medical scheme arrangements and benefits provided
• Other employee benefits, eg housing loans.
1.3 Manpower and productivity
The impact of HIV/AIDS on Alpha’s investment in human resources is particularly important in a labour intensive industry. The potential loss of manpower becomes a critical issue if replacements for experienced or managerial staff are limited.
We provided an overview of the various costs that will have an impact on Alpha, including, but not limited to the following:
• Direct cost of an HIV-positive employee
• Absenteeism – both authorised and unauthorised
• Re-training: greater training costs will be incurred as employees dying of AIDS are replaced
• Reduced productivity
• Increase in sick and compassionate leave
• Increase in the administrative burden in respect of providing employee benefits
• Increased administrative burden on management in dealing with AIDS related issues in the workplace.
1.4 Human resources & industrial relations policies and procedures
Legal Various regulatory controls determine practice regarding employees and prospective employees living with HIV/AIDS. These protect the rights of employees against unfair discrimination in the workplace. For the employer, this can be problematic, as the rights of the individual need to be balanced against the rights of the total workforce (including those not infected by HIV/AIDS). Critically, the company needs to stay profitable to remain in business and to support its employees.
HR policies (eg recruitment and disability practices) are examined. Recommendations were made in line with the proposed Code of Good Practice and possible cost implications to the relevant company are highlighted.
The following areas will be specifically addressed:
• Recruitment and dismissal
• Sick leave and compassionate leave
• Performance management of an employee with HIV/AIDS
• Managing ill-health
• Victimisation and discrimination of employees with HIV/AIDS.
1.5 AIDS policy
The objective of the AIDS policy is to state Alpha’s position on HIV/AIDS. It will include a general statement of the company’s policy and position in relation to HIV/AIDS as well as provide specific guidelines and procedures regarding how issues are to be addressed. The outcome of such a policy is to:
• Establish consistency regarding practices around HIV/AIDS in Alpha
• Set standards of behaviour for management and employees
• Guide employees on how to address HIV/AIDS and where to go for assistance.
1.6 Proposed strategies
We proposed strategies to manage AIDS costs in relation to employee benefits including:
• Benefit changes, treatment protocols, case management and communication strategies in respect of existing medical benefit and health care arrangements
• Development of possible solutions for the retirement funds, including the affordability of benefits, and the long-term viability of the risk benefits arrangements
• Development of alternative structures to alleviate the administrative burden to the employer as a result of increasing AIDS related claims.
2. KAP survey & assessment of training needs
We conducted a Knowledge, Attitudes and Practices (KAP) survey. The survey will target managers and employees independently in separate approaches. It is an essential first step in an effective AIDS information and education programme and it aims to achieve the following objectives:
• Increase HIV/AIDS awareness amongst Alpha employees
• Provide background information for the design of future information and education programmes
• Assess management and employees’ attitudes towards people living with HIV/AIDS.
Once the survey had been completed, we made recommendations regarding the implementation of future education programmes for both management and employees.
3. Balanced scorecard
Twelve Winds has adopted a Balanced Scorecard approach for the management of AIDS in the corporate environment in order to ensure the success and sustainability of AIDS programmes. As a management tool that aligns corporate behaviour with strategic vision and goals, the Balanced Scorecard has proven invaluable in assisting companies to focus their AIDS strategy. And because the Balanced Scorecard balances forward-looking and historical perspectives on the programme, it enables companies to demonstrate past successes as well as be flexible enough to ensure ongoing sustainability.
We worked with Alpha to develop a Balanced Scorecard for its AIDS programme and provided reports based on the Scorecard every six months. These reports detail the success or failure of the programme and provide recommendations on how the programme should be adapted to ensure success in the future. In addition, Twelve Winds Senior Consultant, specialising in HIV/AIDS management, was made available to Alpha for one meeting per quarter with the senior management, AIDS steering committee, and other appropriate staff of Alpha. This service offered Alpha management expert advice on the development of an AIDS strategy, the choice of interventions, and the identification and monitoring of service providers.
Alpha Cement understands that HIV/AIDS is an important social issue in South Africa and that the epidemic has significant implications for the company and its employees. Alpha is committed to responding to the epidemic with a serious, well planned programme that is based in an understanding of the needs of the company, its HIV positive employees, and its HIV negative employees. The detailed information and advice provided by Twelve Winds enabled Alpha to develop appropriate and sustainable response to the epidemic.
Even after several changes to the ownership of Alpha (including Holcim and AfriSam), this commitment continued in all of its related companies. Based on the success of its HIV/AIDS programmes, LafargeHolcim South Africa decided to expand its actions and focus on more general employee well-being. The objectives of this are:
- To build on the success of the AIDS prevention and treatment program;
- To improve the physical and psychological health of LafargeHolcim employees in South Africa and therefore everyone’s well-being.
The company continued to repeat the annual knowledge, attitudes and practices survey conducted to assess the success of the company’s healthcare initiatives in South Africa. Based on these results, the Work Wellness Program was expanded to focus on six themes:
- “Living healthily, living well”,
- “Alcohol, drugs and you”,
- “Breast cancer”,
- “Managing stress”,
- “TB and you”
- and “Let’s celebrate our lifestyle improvements”.
Meanwhile, the AIDS prevention and treatment program is continuing to pay off, with the prevalence rate of AIDS within LafargeHolcim South Africa significantly below the national average.