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Bench & Patio World: Vic Warrington

Conscience compelled an entrepreneur to increase his workers’ wages by 50%.

Tracy Lee Nicol

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Vic-Warrington

Vic Warrington is an entrepreneurial success story: He runs a profitable furniture manufacturing company that started in a garage 23 years ago, and now has factories in Cape Town and Joburg. He employs nine staff, and the business affords him a pretty nice life.

Reality check

So in the midst of escalating strikes demanding wage increases, Vic began thinking about his workers, their wages and their lives. “Even though it was the industry norm, I couldn’t live with myself knowing they were earning less than R1 000 a week,” he says.

So in August of 2012, he sat down with his staff to get a better idea of how they live week by week. What he found was unsettling: though they were paid in line with the Furniture Bargaining Council’s stipulations, Vic found some workers were in debt with loan sharks, while others had many dependents and wages of R650 to R850 a week just weren’t cutting it.

“I couldn’t stand back and do nothing,” says Vic. “Some of these guys have worked for me a long time and it was important to know what their commitments were beyond work.”

A radical move

Vic then made a move that’s caused a stir: He hiked up his workers’ wages by a staggering 50%, bumping them up to R1 400 a week. He also paid the loan sharks so that his workers now have manageable debt with him instead of the sharks. “I’ve had to cut back on my own expenses and luxuries and we’ve also made cutbacks in the business, but we still make a profit. It’s manageable,” Vic explains.

After calling in to 567 Cape Talk and 702 Talk Radio to explain his decision, the responses have been mixed: “Some businesses are uncomfortable with the precedent we’ve set,” he says, but his actions also saw him named a Lead SA Hero in November last year for taking action and changing the status quo.

Spirits and productivity are high

Since the wage hike, Vic’s workers are happier and more productive than ever. “They’re able to pay off their debts and live up to their responsibilities. On the advice of our workers we’ve decided not to hire any new casual staff for the season, they’ve said they’re going to put their shoulders to the wheel – and they’ve really upped their game.” They’ve upped it so much that Vic’s productivity is up 153% compared to November 2011.

“Now I can sleep well and the guys have got  a spring in their step. I challenge people out there to find out how their workers are living on what they earn. I cut down my lifestyle, but feel so much better for it.” In March, Vic plans to continue doing good by starting a training college for woodwork apprenticeships. “This will take semi-skilled workers and turn them into skilled workers with a certificate of competency to handle equipment,” he adds.

Founder: Vic Warrington

Company: Bench & Patio World

Visit: www.benchesafrica.co.za

By the numbers: 

9 – The number of staff Vic employs

R700 -The approved average weekly wage

50% – Employee wage increase

153% – Productivity increase since wage hike

Tracy-Lee Nicol is an experienced business writer and magazine editor. She was awarded a Masters degree with distinction from Rhodes university in 2010, and in the time since has honed her business acumen and writing skills profiling some of South Africa's most successful entrepreneurs, CEOs, franchisees and franchisors.Find her on Google+.

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Doing Good

The Female Face of Rural Agriculture

Women across the world bear almost all the responsibility for meeting the basic needs of their family yet, because of social and cultural influence, are systematically denied the resources, information and freedom of action they need to fulfil this responsibility.

Tracy Lee Nicol

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As cornerstones of their community, research has consistently shown that empowering and investing in rural women significantly increases productivity, reduces hunger and malnutrition, and improves the infrastructure and living standards in rural communities.

Ripple effect

Helping women generate income through productive assets.

One of the major challenges facing women in agriculture is their lack of access to skills development, improved seeds, fertilisers and equipment. This means their yield is on average 10% to 20% less than that of a male farmer.

As a consequence, rural women typically work longer hours than men, placing pressure on their child-caring and domestic responsibilities.

To help alleviate this problem, Tanzanian social entrepreneur Victoria Kisyombe founded micro-leasing business, Sero Lease and Finance (SELFINA). Pioneered in 2002, the business provides exclusively to women entrepreneurs, has issued credit worth $22 million dollars, has trained 46 000 women in business management skills, and has helped 23 000 women out of poverty.

It’s expected to positively impact 440 000 lives by 2014. Best of all, 100% of its revenue is earned.

How it works

Unlike micro-financing, which provides credit for small business owners to make short-term purchases like raw materials, micro-leasing means the lessee doesn’t need to use scarce working capital to buy equipment upfront.

Rather, women become owners of leased equipment and use it as collateral for further borrowing. SELFINA leases equipment such as small tractors, water pumps, irrigation equipment, milling machines, oil extraction machines, bicycles and motorbikes, livestock and poultry.

Throwing a rope

Throwing-a-rope_doing-good_cool-business

This Brazilian company is tackling education, environment, microfinance, rural development and trade all in one by making rope. And it’s making millions of dollars a year.

Run by Ismael Ferreira, APAEB is a Brazilian co-operative of smallholding sisal farmers – sisal is used to make rope, rugs and brushes.

Founded in the ’80s to remove intermediaries and assist farmers to collectively market their sisal crop, it has since gained export rights, forged links with foreign markets, and built processing plants and a factory to export millions of dollars’ worth of quality, finished products.

A social business at its core, it has an annual budget of $7,5 million (2010) and 96% of its revenue is earned.

Impressive on its own, but this business has directly benefited over 12 000 people in an area where most farmers have 11 hectares or less of dry, infertile soil with limited water resources.

How it works

As an exporter, APAEB links international markets with small agricultural producers by developing lasting relationships, encouraging mutual respect, and producing quality workmanship.

It trains and organises local farmers to manage the growing and manufacturing processes, and has increased financing from banks and donor agencies.

In 1997, it constructed a multimillion dollar carpet factory which increased the co-op’s revenue by 400% and raised the industry price of raw sisal. The operation employs over 800 people and has brought a powerful multiplier effect to a region where about
500 000 people derive their livelihood from sisal.

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Doing Good

The Business of Creating Jobs

South Africa has a massive unemployment problem.

Tracy Lee Nicol

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Presently 25,2% of potential employees are seeking work, and it grows to 36,7% if you include those who’ve given up completely. Between 2003 and 2010, demonstrations by poor, unemployed youth increased eight-fold, to 111 per annum. It’s reaching crisis point for the economy and individuals, but these businesses offer a guiding light. By Tracy-Lee Nicol

For-profit

Find a need, then train workers

India has a rapidly growing economy and a large youthful population. But like South Africa, the country is plagued by a significant shortage of skilled labour, widening the gap between rich and poor and hamstringing economic growth.

Jajendra Joshi-Empower Pragati

Social entrepreneur Rajendra Joshi, founder of for-profit Empower Pragati Vocational & Staffing (EPVS), is changing this by providing disadvantaged youths with livelihood skills development and meeting demand for quality and reliable employees in the private sector. Market mapping by EPVS determines which skills are needed in the market, then develops a curriculum for training youth conducted both in-house and with industry specific bodies.

Placement executives then ensure each trainee is provided with placement opportunities with participating organisations in retail, hospitality, logistics, finance, supply chain and healthcare sectors.  EPVS has over 22 training centres across India that have directly benefitted more than 2 500 youth. It has an annual budget of $750 000 and has 100% earned revenue.

Hybrid model

Financing self-employment

One way to improve unemployment is to create businesses and encourage self-employment. In 1987, Nigerian entrepreneur Godwin Ehigiamusoe created micro-finance Life Above Poverty Organisation (LAPO) to empower Nigeria’s poor and vulnerable people.

Godwin Ehigiamusoe-Lapo

As part of its for-profit microfinance, LAPO offers loans, savings products, and credit-for-shares investments to micro- and medium-scale enterprises such as craftwork, food processing, merchandising, fabrication and farming operations.

As part of the non-profit, LAPO then engages with poor and vulnerable communities by providing social and health empowerment programmes addressing esteem, nutrition, discrimination, and social inequalities, as well as providing training, technical assistance and HR development to other micro-finance institutions, NGOs and banks.

Over 486 000 individuals have benefitted from LAPO which has 100% earned revenue and an annual budget of $285 million (2011).

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Doing Good

(Slideshow) Society’s Change Agents

Entrepreneurs who are building promising businesses to tackle social ills.

Alison Job

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Anne-Githuku-Shongwe-Social Entrepreneur-Doing GoodAnne Githuku-Shongwe

Anne Githuku-Shongwe, founder of interactive mobile learning tool Afroes, was honoured with social entrepreneur of the year awards at the World Economic Forum on Africa in Cape Town in May

Afroes uses interactive mobile learning strategies to teach Africa’s youth about entrepreneurship, leadership and empowerment. Contact: info@afroes.com

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