There are numerous challenges of transformation faced by the fleet management industry, but what does transformation in fleet management entail?
It is the intention of the government to transform fleet management by introducing black owned fleet management companies to the fleet management industry. It should be of utmost importance for organisations to unlock the potential in the fleet management industry and create opportunities for growth and education in South Africa.
According to an article published on Moneyweb, an independent financial media group listed on the JSE, “the various industry charters that have defined Broad-Based Black Economic Empowerment (B-BBEE) structures as a vehicle for transformation mean well. But they’re not innovative enough. They’re riddled with old-style business thinking, predicated on debt funding and keep shareholders away from the heart of the business.”
Amasondo Fleet Services, a QSE and Level 2 contributor is a leader among South Africa’s black empowered fleet management companies. EQSTRA/EnX Fleet Management has a 60% shareholding in this business.
In order to better meet the fleet management requirements of entities falling under the auspices of the Public Finances Management Act (PFMA), EFM felt it prudent to create a black-owned division that would satisfy the more stringent BEE requirements of this sector.
We recently spoke to Ndaba Mhlanga, the Director of Amasondo Fleet Services to find out what his views are on the topic. Here are his insights:
“Transformation means attracting the right skills for the industry. However, people are not as informed as to what the fleet management industry is all about which in turn makes this industry unattractive to talented individuals from the previously disadvantaged groups. People are not aware of the opportunities that exist in the fleet management industry and tend to think it’s similar to the motor industry – but there’s a huge difference between the two industries and the opportunities on offer.
To address the differences between the two industries, transformation in this sector must include education about the fleet management industry itself and this should start at grass root levels, where both schools and universities need to be educated about fleet management.
Future employees in the fleet management industry are required to have a technical understanding coupled with commercial acumen. Public Sector entities, for example, look to service providers to provide these educational and transformational programs. They require programs which include a measurable transfer of skills – programs which can be reviewed to ensure that transformation is working. These programs must be aimed at both their own employees and the community in general.
A strong government policy which is clear and concise, which also defines what needs to be implemented in the fleet management industry is necessary as effective transformation requires good intent from both the government and the corporate world.
Two major benefits of transformation are upskilling the communities and job creation. At present, South Africa is suffering from a lack of job creation and unemployment is at 26.7%, according to Statistics South Africa. It’s important to stimulate the communities to get them involved which will result in job creation.
However, this is a collective responsibility and should involve all sectors of our community, from Government, through to the corporate environment. For this to take place, more recognition for black talent within the fleet management industry is required as a lack of recognition leads to frustration and therefore black talent leaving their companies or the fleet management industry altogether. These companies then lose critical skills which they should be nurturing instead.
There is a great opportunity for existing businesses within the fleet management industry to act as mentors to new and emerging businesses created by black business owners. Amasondo Fleet Services, for example, leverages off from the skills base and experience at EQSTRA Fleet Management. But for this to happen, existing businesses must recognise the opportunities that will be created through mentorship which will help the industry to grow and create more job opportunities
Successful transformation can only take place if education about the fleet management industry occurs and recognition is given to those who deserve it. The strategies of fleet management companies need to be carefully aligned with government’s vision and the various requirements for fleet management. If these aspects aren’t addressed, transformation can’t take place in this industry in South Africa.”
Is your fleet ready for IFRS 16? Find out below:
