South Africa's financial services firms will need more people

Workers and shareholders in South Africa's financial sector are digesting the impact of a Black Economic Empowerment charter released late last week.

A feverish recruitment process could be about to take off as a consequence of the reforms, in part because all firms in the sector are expected to require more staff, experts predicted.

"There is an element of competitiveness that will increase as a result of the charter," Securities and Investment Professionals' Kennedy Bungane told BBC World Business Report.

"But the poaching of staff will not only be internal to the sector itself, but from other sectors, from academia, from other areas of industry in South Africa.

The charter, which has been drawn up by the industry itself, has been described as a breakthrough document.

Employment equity: Black representation by 2008: 25% at executive level 20-25% at senior level 30% at middle level 40-50% at junior level 33% at board level

It promises to ensure that at least a quarter of all companies in the sector will be owned by black people before the end of the decade.

By then, black people's skills should have improved dramatically, and they should have more control and be represented to a greater extent in financial firms' management.

In addition, companies should boost their social investment.

Poor households

Ten industry associations were involved in negotiations ahead of the charter's release, including the investment, insurance and banking businesses.

Unit trusts, fund managers and brokerage firms also back the reforms, as do black professionals and black businesses.

Beyond setting out a strict timetable for ownership and employment reforms in order to improve the lot of those professionally involved in the financial services sector, the charter also seeks to provide better access to financial services for poor households.

Up to 75bn rand (�6.3m; $10.5m) will be set aside by the industry for so-called empowerment financing.

The timescale of the reforms and their scope should ensure that the industry is not destabilised, Mr Bungane believed.

"The objective of the charter was always to be transformational and yet achievable," said Mr Bungane.