Rural 
renewal

Spurring a rural revolution

Helen Bimbassis, human resource consultant
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South Africa’s national development plan has a target of reducing our unemployment rate from about 25% (now) to 6% by 2030. Is this a realistic objective?

Helen Bimbassis, formerly of Deloitte RecruitTalent, who worked as a human resource consultant for eleven years, has an answer: "rural sourcing".

She said this concept is about companies and industries establishing operations in rural areas.

“Rural and onshore outsourcing relies on two simple premises: Smaller towns need jobs and offer a cheaper cost of living than urban centres.      

At least 43% of South Africa’s population live in rural areas. Three quarters live below the poverty line, due to apartheid laws which denied them ownership of fertile land. Rural South Africans eke out a living ploughing the little land they have and by self-reliant projects like co-operatives

The question is, how can the 43% (of the population living in rural areas) make a decent living? Can they also contribute to their communities and the economy at large without necessarily uprooting from their rural homesteads?

According to Bimbassis, companies could establish factories in these rural areas, thereby taping into relevant skills at a cheaper premium.

“It is a win-win situation for all involved, specifically as people in rural areas would not have to migrate to cities looking for jobs,” she explains.

This concept, says Bimbassis, arrests the brain drain that over the years has deprived smaller towns of rare skills, leading to the mushrooming of ghost towns.

Bimbassis said Africa is losing an estimated 300 000 professionals, while employing 150 000 expatriates who cost the continent $4-billion (R34.6-bn) a year. These startling figures can be reversed if respective governments embraced rural sourcing.

This concept, if implemented properly, encompasses nearly every industry, from manufacturing to design, software development, financial control, logistics management, customer support and sales.

“Companies or businesses willing to venture into the hinterland could enjoy considerable benefits, ranging from stable a workforce and lower attrition – turnover rates are around 5%,” she said.

Business initiatives will bring about developmental projects in the form of better infrastructure, hospitals, schools and improved sanitation facilities.

The Grayson and Fannin counties in Texas in the United States have benefited from rural and onshore sourcing.

The success of this concept has been attributed to several economic incentives to attract business such as offering a relocation expense subsidy, availability of training grants for their workforce and, rent and lease breaks.

For companies looking to set up in remote towns, telecommunications systems and other public infrastructure are essential.

Where will rural-based companies draw the much-needed expertise, in terms of labour?

  • Colleges and universities will have to operate as feeders to these towns.
  • Companies will have to attract local graduates and other professionals.
  • Companies, once established, needed to expand their businesses.
  • In some cases, space is a deterrent. Grayson had the necessary infrastructure for this.

 Bimbassis has few hints that could help organisations to successfully implement this concept:              

  • Find out what skills the population possess
  • Partner with local educational institutions to address skills inadequacies  
  • Talk to existing communication companies about their strategies and time frames       
  • Understand which other stakeholders are involved and what their focus areas are     
  • Utilise partnerships, collaborations and co-operation to network and organise interest groups with similar objectives

In addition to Bimbassis, it is inherent for companies to understand the political environment; find out whether it is conducive for business to operate there; quality of life and availability of any outdoor activities and recreational facilities.         

Rural South Africa is characterised by smaller towns. Do they possess capacity to serve as a source for private sector procurement?

In addition to Bimbassis, it is inherent for companies to understand the political environment; find out whether it is conducive for business to operate there; quality of life and availability of any outdoor activities and recreational facilities.        

Rural South Africa is characterised by smaller towns. Do they possess capacity to serve as a source for private sector procurement?

Prime example  

Grahamstown in the Eastern Cape, with a population of about 75 000, as what it takes to be a hub for rural sourcing, according to Bimbassis. 

Historically, the area is a melting pot of cultures, with Khoi, Xhosa, Boer and British ancestry dominant, and that heritage still exists, which makes this town an attractive tourist attraction.

This bodes well for businesses in this university town, enhancing employment opportunities in the process. T

he town is a kaleidoscope of colour and a magnet for the artistically gifted. Currently, it is home to the annual Grahamstown National Arts Festival, which attracts people from all walks of life, enhancing chances for business to thrive there.

Euphemistically known as the City of Saints, Grahamstown boasts world-renowned higher educational institutions, notably Rhodes University.

The above is a perfect backdrop for the town to meet required standards of an ideal rural sourcing centre.

Hiring graduates or other professionals from local institutions becomes comparatively cheaper. The town has a number of prestigious schools such Graeme College, The Eastcape Midlands FET College in Uitenhage, which cater for non university programmes, helping to provide a steady flow of trained people into the local economy and beyond.

Grahamstown has established communication networks and has access by road and air charters within South Africa and neighbouring states.

Though rural sourcing is a sustainable idea, companies have to brace themselves for unforeseen challenges, such as finding financial resources to help establish themselves in rural areas and inexperienced employees.

“For initiatives such as these to succeed, infrastructure in the form of stable telecommunication network, fully functional schools, universities and small businesses, needs to be in existence,” Bimbassis said.

Where these projects have succeeded, there are notable impacts on the community, notably there should be incentives which are meant to attract the youth to participate, so that they  stay and work in their hometowns and contribute to their local community and so reduce urban influx.

What is the way forward then? “Empower our rural areas in terms of skills development, education and assist businesses to consider innovative approaches in making such projects a success.

“Government needs to remove red tape and assist these initiatives, if we are to achieve the aggressive targets set out in the National Development plan,” Bimbassis said.

 

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