Telkom staff welfare at the fore in Airtel merger

The only constant, they say, is change. Corporates are now alive to the fact that merging synergies may be the most strategic life line for their respective businesses. Universally, a legal consequence of a potential corporate merger or acquisition is the fate of the employees. Will they be impacted as a result of restructuring due to redundant roles being identified post the tie-up or acquisition (duplicity of roles) or a right-sizing exercise due to a shift in strategy hence the need for a review of human capital needs?

The success of a company, before, during and after the execution of the merger or acquisition, will be determined by how well its leadership manages strategic talent matters while adhering to the Labour and Employment Law.

Kenya’s corporate workplace has been at an inflection point, in the last few years, with an increase of mergers and acquisitions. This has earned Kenya a fourth overall ranking in Africa — after South Africa, Nigeria and Ghana — as the most sought-after country for foreign investors keen on merging with or acquiring local firms.

Telkom Kenya, easily one of the most active firms on this front, from its chequered history of transformative integrations since its privatisation in 2007, is becoming a literal poster child of postmodern transaction employee integration.

Concerns reported in the media of various stakeholders calling for the scrutiny of the approach to be used, as well as the number of employees Telkom Kenya expects to “transition into the intended combined entity and retain in the New Telkom,” while understandable, is mired in a lack of understanding. The intended process, is beyond reproach, above board, informed by the laws of the land and most importantly, anchored in humanity — seeking to realise the least possible, negative and disruptive impact on our employees.

To put some chronological facts on the table, Telkom Kenya issued the minimum one-month notice of intended redundancy to its employees, on July 31. This notice informed our staff of the intention to terminate the employment of approximately 575, on account of redundancy, as a result of and to facilitate the intended combination of some of Telkom’s businesses with Airtel Networks Kenya Limited. This action — the issuance of the intended redundancy process — was in line with the law, more specifically, Section 40 of the Employment Act.

It’s also pertinent to note that this is a process that has to be undertaken before employees are able to move to any other entity, in this particular case, into the intended combined entity — Airtel Telkom and its outsourced partners, after the transaction receives the requisite regulatory approvals.

Telkom employees were notified of the intention of the combined entity and its outsourced partners, to offer employment to a majority of them who would be declared redundant. This remains subject to the impacted staff meeting the combined entity’s recruitment criteria for the available positions. To create a stronger version of the two entities, that can evolve into a strong second-telco player in the market, requires the very best of our resources.

Consequently, vacant positions within the intended combined entity and its outsourced partners were advertised for interested employees to apply. The outcome of the interview processes has been held in abeyance until the transaction receives full approval from the regulatory authorities.

It is instructive to note that all people aspects, with respect to the integration of Telkom’s and Airtel’s businesses, have been well-thought through, cognisant of the sensitivities and impact this exercise could have.

The benefits of this merger cannot be contradicted, post integration. In a snapshot, the combined entity brings to the table enhanced synergies. Telkom’s and Airtel’s Network capacity will increase; once the combined entity sheds off sites in proximity of each other. It is envisaged that this action will realise a 30 percent reduction in running costs, thereby progressively working towards the elimination of losses in its books.

Further, using a unified system, where the combined entity will take the best systems from either side, will see to the drastic reduction of operational and maintenance costs by approximately 50 percent. Airtel-Telkom will also have a better distribution footprint, with close to 80 outlets. Moreover, it will also be looking at a subscriber base of about 15 million.

This augurs well, not only for the strategic survival of Airtel and Telkom, that are currently navigating a very tough and skewed market, but also to bring about the requisite competitive sanity into the industry, ensuring the creation and retention of a stronger alternative service provider for the consumer.

The clamour for an audit of the pre-merger human resource process by some parliamentarians at this point, for a process that is in public domain, subjected to the rigours of the Labour and Employment Laws, is at best superfluous and a needless bureaucracy that could place further hazards on the path of realising transaction closure.

Perhaps Charles Darwin put it best: “It is not the strongest of the species that survive, nor the most intelligent, but the one that is most responsive to change.”

Kenya’s telco industry needs this merger if its competitive health is to receive a shot in the arm, making it thrive and be of benefit to the consumer of telco services.

The writer is Telkom Kenya Chief Human Resource Officer.