What service does 21st Century Pay Solutions offer clients?

21st century advises companies in terms of their pay practices in order to reduce inequality over time. Inequality is not only between the CEO who is at the top and the lowest paid person at the bottom, it is the way everyone on the curve is paid.

If a South African earns 6,000 rand a month at the bottom end the CEO is earning 3 million rand at the top end, we are looking for a smooth curve between those ends, which then reduces inequality. That curve is a measure of what the Gini coefficient is.

South Africa has been debating whether or not to introduce a minimum wage. Economists will say that a minimum wage affects the supply and demand of labour and may produce the unintended consequence of increasing unemployment. We create a pay scale with a living wage for our clients, which then defines the wage curve.

21st Century was founded in 1996, just after the end of Apartheid. In your opinion, what have been the changes in social transformation and equality? What is your outlook for the future?

There has been massive transformation since 1994. It gets overshadowed by reports on the highest figures of unemployment in the world, but if we look at the burgeoning middle class, it has been phenomenal in reducing inequality and allowing more people to access the country’s resources.

We have over 1,500 clients, we work with more than 67% of the JSE, and we can clearly see the transformation. The biggest companies have taken onboard that transformation willingly, not because of legislation.

At 21st Century we decided to have a 51% ownership deal within our own employees. The good will, commitment, and change in the vision of the team has been fantastic.

BEE is seen as a prohibitive concept from outside investors. What innovative solution makes BEE a profitable prospect?

BEE has different components: ownership, skills acquisition. Your resources are your people, your human capital investment is in BEE people. If investors see that in a negative way it means that they are not willing to invest in the citizens of South Africa.

The biggest innovation in South Africa is its entrepreneurs starting new businesses and growing them quickly. Those entrepreneurs are enabled through BEE legislation. Instead of just buying from the standard traditional companies, we are encouraged to invest in entrepreneurial companies and drive their growth and the country’s growth. You want to invest in a country that is innovative, that is expanding and doing it in a sustainable way.

21st Century is the largest remuneration consultancy in Southern Africa. What is your strategy to grow outside South Africa?

We are operating in 11 countries across East, West and Southern Africa. These countries each offer different things, even if their borders touch each other. Investors need an investment strategy that suits them: to invest where the network is good, or where the market is unsaturated. We have chosen countries based on the maturity of the market and the ease of doing business.

There are two models for entering into an African country using South Africa as a springboard: the business local partner model, where you have to find one that you can trust; and the more costly option, which is to install offices in each country. We chose the first model. You just need to understand the country before arriving.

To develop our business partner model in each country we started by training. Remuneration training is unknown; it is a new industry, especially in Africa.