Business enablement

Human capital

Overview

During the reporting period, our focus in human capital management was centred on implementing our People and Culture Strategy to align with the strategic goals of the business. This involved collaboration across various functions in Human Relations such as strategy, talent acquisition, employee relations, training, shared services and rewards to support the business.

We also continued to monitor compliance with our Performance Management Policy in order to embed a culture of high performance and productivity, and undertook several research and special projects to ensure that our human capital management is informed by sound principles and best practice.

A key area of emphasis continued to be employee wellbeing, rewards and benefits, which was aimed at restoring and enhancing benefits postpandemic. A benchmark exercise was conducted against the market, which led to new uptake on the housing subsidy and the staff bursary scheme, and extended eligibility coverage to a greater number of employees. Furthermore, ex-gratia bonuses were paid together with market-related salary increases for all employees.

Additionally, ACSA successfully submitted a new Transformation and EE plan to the Department of Employment and Labour for the period up to 2028, underscoring our commitment to diversity and inclusion. Health and safety across our business remained a top priority, and we continued to review our policies to ensure alignment with South Africa’s Occupational Health and Safety Act (No. 85 of 1993) and all other relevant regulations.

Regular communication with staff was maintained through Employee Focus Groups and CEO-led Roadshows to foster meaningful engagement with employees.

Governance Framework and Operating Model

We continue with the implementation, monitoring and evaluation of the GFOM, initially introduced in 2016 and subsequently revised during the 2021 financial year in response to the Covid-19 crisis. The Group has successfully concluded the first phase in the implementation process and change management efforts to fully integrate GFOM into our operations are ongoing.

During the reporting period, PwC was contracted to assist with the Change Management process and support ACSA with the implementation of the GFOM through a dedicated project called the Organisational Design and Change Project. This commenced in September 2023 and Phase One was completed in March 2024. Moreover, the IT and Finance divisions continue to engage with the operating divisions to align cost centres with the revised organisational structure envisioned in the model.

The baseline assessment and proposed recommendations for Phase 2 of the Organisational Design and Change Management project points towards a pressing need for an end-to-end organisational design, which will include the review of organisational architecture on micro- and macrostructure level, capacity planning, capability modelling, business process mapping, role profiling – including workforce transition – and the overall implementation of the matrix structure.

Talent acquisition

As the world of work evolves in the post-pandemic environment, novel business trends are emerging. At operational level, these are challenging us to look at new ways of sourcing talent and of integrating that talent into the workforce.

Driven by the changes that have come about in recent years as a result of technological development and greater workforce mobility, we are involved in an ongoing process of investigating new staffing models and talent sourcing platforms, and have specifically increased our usage of social media to tap into the Open Talent Economy. This is enabling us to engage with talent beyond traditional recruitment boundaries.

Talent acquisition received special attention throughout the year as we set out to fill vacancies created as a result of the Staff Cost Reduction Programme that was introduced in 2020. Further information on priority recruitment is given in the Transformation section of this report.

Learning and development

In line with TETA requirements, we submitted our Workplace Skills Plan (WSP) for the 2024 financial year. During the development of this plan, line managers were consulted and they contributed input related to strategic objectives, departmental business plans, regulatory training, workforce optimisation and transformation.

Our learning and development initiatives are delivered through two channels, namely the Training Academy, which focuses on commercial development initiatives for external customers, and the Skills Development Programme, which focuses on the development of our internal employees.

Our training budget has remained constrained, with the budget allocation for the 2024 financial year being 62% below the proposed budget for planned training initiatives. We were, however, able to considerably increase training for employees compared to the previous period.

The Training Academy, which is the only aviation security training centre in the sub-Saharan region, continues to implement a commercialisation strategy that is aligned to our organisational strategy. Detailed information about this and our learning and skills development programme is given in the Transformation section of this report.

Employee relations

Our employee relations environment, which we manage actively, is currently stable.

In accordance with the bargaining agreement for 2023, the employee relations teams agreed with organised labour to develop local and national labour forums. These provide structured platforms for ongoing engagement.

ACSA and organised labour engaged in wage negotiations, which were successfully concluded. A 7% wage increase was agreed to across the board, effective from 1 September 2023. Also, in the third quarter, ACSA entered into a Recognition and Procedural Agreement with NEHAWU and NUMSA, which further cemented the long-established and healthy working relationship between the Group and organised labour.

Employment equity and transformation

The EE plan for the reporting period was rolled out and this process was assessed in the fourth quarter. New employment equity targets have been set for the 2025 financial year. Detailed information about our employment equity and transformation programme is given in the Transformation section of this report.

Bursary programme

As part of our commitment to developing talent and supporting lifelong learning, our Employee Bursary Programme provides financial assistance for further education. Due to financial constraints, we have only been able to sponsor employees who were already in the programme by March 2020 over the past three periods. However, in September 2023, we were again able to open up the programme to new applicants. By 31 March 2024, 293 bursaries to the value of R9.5 million had been granted.

In addition to offering bursaries for employees, we offer bursaries for the children of employees in Grades A to C. These are to enable them to pursue studies in disciplines identified on the South African National Scarce Skills list. The programme also offers workplace exposure through vacation work, providing recipients with practical work exposure and, ultimately, with permanent employment where opportunities exist. By 31 March 2024, 76 bursaries to the value of R5 million had been awarded to the children of employees. Of these recipients, 84% were Black Africans and 46% were female.

Remuneration and performance management

We aim to attract talent and support our employees by offering a competitive remuneration mix. Salaries and remuneration policies are benchmarked against and aligned with the market.

In all our activities, we adhere to the principles of good governance as set out in the King IV™. A full analysis of how we do this is given in our Governance and Remuneration Report, which complements the Integrated Annual Report and forms part of our annual reporting suite. Details of the mandates, activities and performance of the Board and the Committees of the Board are also provided in that report, as are details of our remuneration policies and practices.

Employee engagement and wellness

Despite budget constraints, we continued to actively engage with our employees and to support their wellbeing through the various initiatives that are part of our ACSA Cares employee health and wellness programme. This is delivered through our wellness partner, Proactive Health Solutions (PHS) and includes an employee assistance programme.

During the fourth quarter, the Group Executive: Human Resources also held employee engagement sessions to provide feedback on the annual Employee Satisfaction Survey as well as on the CEO roadshows conducted during the reporting period.

Special projects

At the start of the previous period, we introduced a Hybrid Membership Programme to accommodate the new practice of hybrid working for qualifying employees, based on their work functions. This has been successfully implemented and is now embedded throughout the organisation. The programme not only accommodates various levels of remote working but is aimed at driving and encouraging behaviours in line with our PRIDE values.

The qualifying criteria for the programme are illustrated in this diagram:

HYBRID MEMBERSHIP PROGRAMME

Another notable project introduced during the previous period was Project Sebenza, which was designed to address the loss of critical aviation-related skills and resources during the Covid-19 pandemic. This allowed for us to lift the moratorium on recruitment that had been put into place in March 2020 so that we could rebuild capacity in line with traffic recovery. During the 2024 financial year, we focused strongly on recruiting suitably qualified personnel in order to build up ACSA’s human capital capacity. Recruitment statistics are presented in the Transformation section of this report.

Also, during the reporting period, the Human Resources and Leadership Committee of ACI Africa, the regional authority of ACI, requested that ACSA lead the process of developing performance management guidelines in order to facilitate the delivery of key airport management KPIs such as ACI accreditations and Airport Service Quality. It specifically requested that the guidelines include motivational factors that make performance meaningful to employees to encourage affiliation and productivity. Draft guidelines were presented on 15 October 2023 at an ACI conference held in Dakar, Senegal.

The guidelines have been finalised and the specifications have expanded beyond the initial requirements. ACSA has now been called upon to spearhead industry white paper initiatives concerning airport performance and productivity. This will not only enhance ACI Africa’s reputation, it will solidify ACSA’s position as a thought leader in the area of performance management and productivity. Ultimately, this project will also support the efforts to commercialise ACSA’s Training Academy through the provision of human resources advisory services.

Outlook

In the 2025 financial year, the Human Resources division will continue to deliver on key priorities identified in the People and Culture Strategy and to monitor implementation. A strategy review session was held in the fourth quarter of the reporting period and was used to set the tone for the 2025 financial year.

Within the context of a more streamlined and agile operating structure, we remain committed to the wellbeing of our staff and other stakeholders and we will continue to actively engage with them in order to fulfil this mandate.

IT and digitalisation

Overview

The need to digitalise the airport environment, our operational processes and the user experience is a core strategic focus for ACSA and the digitalisation process had to be accelerated in response to the impact of the Covid-19 pandemic.

Remote and hybrid working solutions had to be put into place at short notice and we had to rapidly improve our ability to deliver a contactless travel experience. Our operational processes also had to be extremely flexible in order to accommodate changes in lockdown levels.

Over the past four periods, our IT Infrastructure and Digital Strategy has provided the robust structure we have needed to manage these challenges. The primary objective of this strategy is to adopt and leverage appropriate technology to support our value-creation process through the delivery of a consistently positive customer experience, paperless travel, automated cost management, greater efficiency, revenue diversification and, ultimately, business growth.

A digital transformation roadmap is in place to support this strategy and it includes a capex allocation of R1.2 billion for the five years to the end of the 2025 financial year. Annual allocations are adjusted in alignment with the revised Financial Plan adopted in 2020.

In the 2024 financial year, we spent R224 million on executing various initiatives defined in the roadmap. These were directly related to the passenger experience, cybersecurity, IT infrastructure and the automation of core business processes.

Although we have been working with reduced budgets since 2020, we have continued to honour our commitments on existing projects and to implement the projects for which tenders had already been signed prior to the Covid-19 pandemic. Other than these contractual obligations, we have prioritised urgent and high-impact projects intended to secure business security and continuity.

We have, in particular, had to prioritise cybersecurity as the incidence of cyber attacks worldwide has ramped up considerably since the start of the Covid-19 pandemic, partly due to the rapid implementation of remote and hybrid working solutions, which has resulted in system vulnerabilities across the board. In 2020 alone, malware attacks increased by 358% globally compared to 2019 and the incidence of cyber attacks increased by 125% in 2021.

It is estimated that, in 2023, there were around 800 000 cyber attacks worldwide – and this number is expected to increase year-on-year. Compounding the change to the threat landscape ushered in by the Covid-19 pandemic, Russia’s invasion of Ukraine in 2022 had a massive impact, with cyber crime increasing exponentially. Of note is that, at present, 92% of malware is delivered by email and 74% of security breaches are caused by human error. Further, as supply chains have become more interconnected and complex, 40% of cyber attacks on businesses now occur indirectly through the supply chain.

Our response

ACSA is a critical organ of state and connects South Africa with the international economy. We operate in an industry that has a major appetite for technology, not only for business purposes but to secure the passengers and other stakeholders who use our airports. In order to fulfil our mandate, we have been leveraging technology and digitalising our operations, which has added extensive capability, but has also expanded our threat landscape.

To ensure that Group operations are secure, compliant and resilient, we have invested extensively in Microsoft security systems, both on-site and in the Cloud. Further investment in additional Microsoft technologies is enabling us to create an operating model customised to the needs of a SOC and to mature our overall IT capabilities.

Working in conjunction with Microsoft and South African partners, we have, for instance, established a dedicated cybersecurity operations centre (SOC) to deal with the threat of cyber attacks. The centre focuses on three key touchpoints, namely people, processes and technology, and will receive considerable financial support from Microsoft over the next five years. SOC analysts are on duty 24/7/365 to focus on security incident monitoring and remediation, automation of core SOC processes, and the enablement of our technology investments.

Although there remain constraints on our budget, we continue to use a zero trust architecture approach by leveraging off existing investments and making use of a cybersecurity mesh architecture. This has enabled us to deploy security controls closer to our various assets and to support hybrid workers. While we have a high level of digital security, we continue to prioritise key initiatives throughout the business and to focus heavily on cyber and information security.

Key strategic projects

As we forge ahead with the implementation of our strategy, we are focusing on the following key projects, all of which have a direct impact on passengers, airport users and airlines:

• The introduction of biometric technology, including fingerprints and facial recognition. Biometric technology is being used to create digital identities (tokens) for passengers passing through security checkpoints, boarding control points and boarding gates. Embedded in a self-service programme, the technology is designed to expedite passenger movement at critical airport touchpoints, such as at baggage drop-offs, immigration control and boarding gates. With this technology, we aim to significantly reduce reliance on human intervention and to offer passengers the flexibility of a self-service option.
   
  In the initial implementation phase, we are introducing automated border control gates for both arrivals and departures at OR Tambo International Airport in Johannesburg, King Shaka International Airport in Durban and Cape Town International Airport. The second phase will involve the implementation of self-service bag drop facilities and selfboarding gates at each of these airports. In Phase 3, we will extend these capabilities to all of the airports in our portfolio.
• Upgrades to the Airport Management System, Common-Use Passenger Processing System (CUPPS), and Common-Use Self-Service (CUSS) kiosks, which are integral to airport operations. Implementing these solutions will ensure that passenger and airline processing systems are aligned with aviation industry trends and best practices and that they meet the expectations of these stakeholders, allowing flexibility and efficient passenger processing at check-in counters and/or kiosks and boarding gates. They will be implemented throughout the airport network during the 2025 and 2026 financial years.
• The modernisation of parking equipment and supporting systems. We have replaced the systems that had reached end-of-life status at OR Tambo International, King Shaka International and Cape Town International. This has been done to ensure that there is a seamless and positive experience for passengers and other airport users when using our parking facilities. The newly installed equipment has a ticketless capability, which will eliminate the need for printed tickets in the near future.
   
  We have also introduced alternative payment methods to further enrich the user experience. In addition to traditional cash payments, motorists can now conveniently pay for their tickets using credit cards, debit cards or the ACSA mobile app. These diversified payment options not only cater for evolving consumer preferences but also contribute to a cashless environment, minimising the operational complexities associated with cash handling.
   
  We will install the new parking systems at the other airports in our portfolio during the 2025 and 2026 financial years.
• Commercialisation initiatives. The IT function continuously supports ACSA’s commercialisation strategy, which is designed to enable the business to diversify its revenue streams and grow non-aeronautical revenue. There are three notable commercialisation initiatives in progress.
   
  The first of these is designed to ensure that we have revenue assurance from retailers through transaction data collection and analytics. With the second, we are embracing cutting-edge Artificial Intelligence (AI) and diversifying our partnerships with the various role players in the traveller’s journey. This is being done to create a digital traveller platform that will offer the majority of services that are important to any traveller. Thirdly, we are commercialising our last-mile offering to airport tenants to include network and Wi-Fi services through a consolidated Distributed Antenna System (DAS) partnership, which will improve connectivity and economies of scale. These projects are currently being implemented and will be fully installed by the end of the 2026 financial year.

These and other initiatives are positioning ACSA for sustained growth, operational excellence and continued success in delivering world-class airport services in alignment with aviation industry best practices and passenger expectations.

Organisational development

At organisational level, we have automated all human resources processes in order to improve efficiencies. The new system provides a range of productivity management tools, which facilitate the efficient and effective allocation of resources as well as productivity monitoring. This project was rolled out during the reporting period.

Further, the IT division has partnered closely with ACSA’s business functions to maintain strategic relevance and provide technological enablement. As we face protracted economic uncertainty, the division is helping to create an efficient, process-optimised organisation by streamlining operations, maximising budget and keeping pace with the demand for evolving technological solutions.

The following technically proficient and process-orientated solutions are aligned to the division’s plan-build-run objectives:

Staff enablement and experience

Most of our employees had the necessary systems at their disposal to work from home when the first lockdown of the Covid-19 pandemic was announced in March 2020. We had already rolled out Microsoft 365 across all of our operations and, by the time that the initial ‘hard’ lockdown was lifted, we had introduced Adobe’s digital signature to complement existing systems and enhance security.

During the reporting period, we continued to focus on training and support for staff who travel frequently or work on a hybrid basis. Using a dedicated service portal, employees can request IT equipment and services, stay informed with regard to the status of their logged tickets, and engage with the service desk. We also continuously improve security on staff devices and enhance the usage of and comfort with such platforms as Microsoft Teams and OneDrive.

Employee experience is, in fact, the primary focus of our digital workplace investments. The economic slowdown, changes in ways of communicating, and greater collaboration between individuals and teams means that IT is focusing on making operations more efficient and user-friendly. We are doing this by adopting a strategic focus on unified communications and collaborations (UCC) tools and hardware. We are also exploring ways to make our ACSA app a platform that will allow our employees to conveniently access HR functions on the go.

In addition, we are working to embed diversity, equity and inclusion (DEI) principles into our Digital Workspace Strategy by maximising and communicating the benefits of a human-centric work environment.

All of our initiatives are implemented within the framework of our Cyber and Information Security Strategy and are operationalised as part of our structured and formalised Information Security Management System (ISMS). Cyber and information security awareness sessions are conducted at all of our airports and we are pleased to report that we did not record any significant cybersecurity incidents during the year.

ESG outcomes

In response to a greater emphasis on ESG outcomes, the IT division has also started to invest in modular devices and intelligence-driven IT sustainability management tools to monitor and reduce environmental impact. ACSA is aiming to create an equitable technology experience for all employees and to address any technology gaps that may be impacting on their engagement and performance. As we discontinue the use of legacy technologies, processes and efficiencies are improving, there is greater cost optimisation, and we are creating a strong platform for organisational agility and future growth.

Further, IT is building relationships with ESG leaders by extending the life span of assets and increasing levels of reuse to reduce emission.

Outlook

IT, like all other areas of the business, has been affected by necessary cost containment measures over the past four periods. However, we are now in a position to begin revisiting capex projects that were in the planning phase prior to the Covid-19 pandemic. We are therefore engaging with various stakeholders with the intention of executing innovative IT and digitalisation initiatives through collaboration. These engagements have the potential to result in beneficial public-private partnerships.

All current and planned initiatives support the objectives of the second timeframe defined in our Recover and Sustain Strategy, in which the focus is on innovation, growth and sustainability. They are, in particular, designed to enhance the passenger experience, improve vertical integration throughout the Group and increase the proportion of revenue derived from non-aeronautical services.

As in the reporting period, the 2025 financial year is expected to bring little relief from global turmoil, regional conflicts and local pressures, which will amplify the need to sustain and steer digital transformation investments in line with policy and passenger priorities. This means that investments in digital technology will be expected to have a tangible impact on the transformation of constituent services, improve the capacity to provide data insights and decisions, and demonstrate that digital infrastructures and information systems are being updated in line with emerging technologies, trends and user expectations.

The IT division will need to continue to prove mission relevance and quantify the impact of its technology initiatives and capabilities. This will need to be done while simultaneously dealing with sector-specific challenges such as low digital maturity, eroding citizen trust, scarcity of talent and persistent difficulties in scaling innovation.

Within this context, the IT division will continue to anchor digital investments in the priorities of mission-critical objectives by assessing how new technologies can and will accelerate or disrupt the organisation’s strategic goals. We will provide the technological support to articulate ACSA’s vision by linking current technology to longer-term expectations, taking into account impacts on the organisation’s mission, airport users, communities and government operations.

Enhancing data analytics and governance capabilities is essential to support ACSA as it evolves as well as to demonstrate its innovative capabilities. The ability to gain insight from data to support informed decision-making will therefore continue to be an essential focus. Within the context of our strategy and digital roadmap, we have defined initiatives that will support the creation of a digital culture and the adoption of technologies for data analytics. This will include a responsible focus on the use of AI, supported by defining policies that will govern its use at ACSA.

We further recognise that cyber crime will remain one of our most critical strategic risks. Since our employees are exposed to interconnected systems, they represent the most vulnerable points of contact with our own IT systems. Keeping them informed about threat identification is therefore critical as we navigate evolving ways of working. Executing our Cybersecurity Awareness Programme is therefore a top priority for the upcoming two periods and, by doing this, we anticipate an improvement in employee behaviour and decision-making in cyber space.

Finally, the IT division will continue to contribute to ACSA’s ESG objectives by ensuring that our data centres are more energy efficient. In order to do this, we will be adopting a prefabricated modular data centre design, which will allow us to expand capacity on demand while simultaneously reducing costs, promoting efficiencies and reducing energy usage.