Interfront Annual Report 2022

PART D:HUMAN CAPITAL MANAGEMENT 61 In the period under review, the human capital environment faced some significant challenges. Due to the COVID-19 pandemic and imposed lockdowns, remote working rapidly emerged, which has, in an already scarce market, grown the playing field for IT human resources even further, increasing the risk of staff turnover. This was amplified further by the limited increases in financial incentives as a result of pressure on the fiscus and associated budget cuts. The full impact of this materialised towards the end of the previous reporting period and continued into the reporting period under review. As a result, this became the number one risk during the financial year. Interfront thus only partially achieved its goals of limiting staff turnover to 14% and maintaining a minimum staff complement of 110 employees. Several measures have been implemented to address the risk, which resulted in a slight decrease in the high staff turnover rate at the end of quarter three, but additional measures must continuously be sought to ensure a high level of long- term employee retention. On a positive note, Interfront’s employees have successfully adapted to the remote working environment, which will result in savings over the long run if managed well and applied to mitigate the risks on Human Capital. Interfront has subsequently adopted a hybrid working model, which allows employees the flexibility to work from home or in the office. While most of the employees prefer to work from home, they are required to visit the office for a minimum number of days every month to facilitate engagement and camaraderie. Currently, we are monitoring the performance of the new model and have not adopted any formal policies to ensure formal changes are well-planned and that high levels of productivity and employee engagement are still achieved following the formalisation of a model. 1. OVERVIEW 2. HUMAN CAPITAL PRIORITIES FOR THE YEAR Retaining high-performing staff is critical to Interfront’s long-term success. Company-specific experience generates valuable intellectual capital. Furthermore, replacing employees is expensive both financially as a result of recruitment costs, as well as from a productivity standpoint. Lead times to upskill staff impact both newly hired employees and employees who assist in the upskilling process. The cumulative loss in productivity can thus be substantial. Due to the highly specialised fields in which we operate, Interfront’s learning curve for a new employee can take up to a year and thus there is a significant delay before reaching optimal performance levels. Interfront made an effort to improve employee engagement and retention during the period under review by reintroducing some initiatives, such as market positioning. A staff engagement survey will be conducted to establish a baseline for assessing staff engagement. Upon review of the engagement survey results, an action plan will be drafted, and special emphasis will be placed in the next 12 to 24 months on improving the baseline and creating an environment conducive to high staff engagement.