Workforce Holdings Limited(“Workforce”) (JSE: WKF), which recently announced a solid set of results for the 2014 fiscal year, is reaping the rewards of its decision to diversify its business, and has realised significant growth across its portfolio of five businesses.The group is also intending to embark on an acquisition trail to fuel this diversification strategy even further, led by its chairman Ronny Katz and Lawrence Diamond, its CEO.
Year-end results for December 2014 highlighted the following: ·
- Revenue increased by 8,6% to R1,8bn (2013: R1.66bn) ·
- Gross margins improved to 22% (2013: 20%) ·
- HEPS increased to 26,2 (2013: 1,6 cents) ·
- Group DSO improved to 42 days (2013: 47 days) ·
- EBITDAincreased by R50m to R79m (2013: R29m)
“Our 2014 results and our continued growth during 2015 are built on the diversification strategy that we have had in place for some time now, which has equipped Workforce to offer its clients a turnkey staffing solution,” says Diamond. “Our core business remains that of staffing solutions, and we expect this to grow in spite of recent regulatory changes, because our company focuses on the people it places in temporary employment as much as it focuses on our clients that provide them with a decent wage.”
“However, in our commitment to provide a holistic solution for our assignees, beyond simply arranging work assignments, we also provide training, financial services and employee wellness solutions, equipping workers with the skills that they need to ensure consistent work, as well as providing workers and their families with wellness solutions traditionally available to permanent workers” Diamond adds.
Workforce has built strong technology systems, built in-house by developers that understand the sector intimately, effectively differentiating it from its competitors in the staffing solutions sector. It offers these systems to its clients as a value-added service.
Its approach to offering turnkey staffing solutions to clients, supported by a holistic approach to workers, has not gone unnoticed beyond South Africa’s borders. Workforce is actively engaging with stakeholders beyond the country’s borders and into neighbouring territories, where its solutions have been identified as potential ways to address staff shortages and unemployment.
Together with staffing and recruitment, the group offers training and consulting, financial and lifestyle products, employee health management and process outsourcing to its workforce.
Staffing and Recruitment
Workforce facilitates job creation and provides its clients with valuable, reliable productivity, while providing workers with decent wages. The company currently manages more than 33 000 assignees daily across a national client base of 3 500 clients. Operational delivery is managed through 100 branches throughout South Africa, and it is currently in the process of establishing a footprint in sub-Saharan Africa, specifically in Mozambique and Botswana.
Training and Consulting
Workforce understands that skills development remains a core challenge for South Africa. The company is committed to developing capability in its workforce to ensure they are sufficiently qualified to earn a decent living and add value to the economy. During 2014 it hosted more than 1 000 learnerships and over 200 internships both internally and within its client-base. It currently has training operations in all major centres across South Africa and has begun to roll out training for clients in Mozambique and Ghana. Workforce training programmes are aligned with the South African Qualifications Authority (SAQA) and accredited with SETA Quality Assurance departments. The company also advises clients on the recently introduced Employment Tax Incentive (ETI) Programme.
Financial and Lifestyle Products
Workforce is responding to its assignees’ desire for a better quality of life through its financial services and lifestyle businesses, incorporating Babereki (a registered credit provider), which offers employee loyalty programmes and responsible micro-loans. Its recently established niche business division, Essential Employee Benefits, offers insurance-based death and disability plans for fixed-term contract employees and family members, normally only available to those with permanent employment.
Employee Health Management
Businesses are obliged to provide occupational healthcare to their employees to ensure a healthy and productive workforce, to prevent the risk of liability, and to comply with the Occupational Health and Safety Act. Workforce Healthcare offers its clients a comprehensive range of on- and off-site primary and occupational healthcare services. Workforce Healthcare incorporates a physical and psycho-social focus in its wellness programmes, including a 24 hour call centre with counselling and case management, face-to-face counselling, education programmes, HIV/Aids management, substance abuse management, state hospital admissions and an emergency assistance programme.
Employers are demanding more specialised models for the management of their staffing and resourcing requirements, including statutory and legal processes. This is a growing trend internationally as the human resources and operations value chain matures, and Workforce assists its clients by taking on more risk and responsibility for processes and the resultant outputs.
The Workforce leadership team believes that a number of acquisition opportunities exist in the market across the group’s portfolio of businesses, and the company intends to pursue these opportunities with a view to extending its share of the market and increasing its profitability.
“Workforce has demonstrated robust growth in revenue and profitability over the past year and is considered a significant competitor in the staffing, training and employee health management industries,” says Diamond. “We believe we are only at the beginning of this growth trajectory and that there are multiple opportunities to capture significant commercial value from Workforce and its diverse business portfolio in the future.”
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