Eskom has shown a tremendous drop in productivity over the past fifteen years, with too many employees doing very little at the company.
The power utility’s bloated workforce is one of its biggest challenges, but there is no easy solution to this problem because of resistance to staff cuts.
Eskom Chief Operating Officer Jan Oberholzer recently said the power utility does not have the money to lay off staff to improve its sustainability.
He said cutting staff will “only” save Eskom around R7 billion per year, adding that Eskom does not have the money for retrenchment packages.
Oberholzer added that it would not be good to retrench between 10,000 and 15,000 people when the country’s economy is in the doldrums.
Low productivity at Eskom
Oberholzer admitted that productivity at Eskom is much lower than what it used to be, and that this is a big concern.
He said that 11 years ago, Eskom employed less than 30,000 people. This is now sitting at 44,000 employees, while the company is also paying for contractors to keep the lights on.
Chief economist of the Efficient Group Dawie Roodt said Eskom, with its bloated workforce and high costs, is technically bankrupt.
“All attempts to reduce its workers has been met with stern opposition from unions,” he said.
Instead of laying off staff, Oberholzer said Eskom is focusing on increasing productivity among existing staff, which he admitted is “very low”.
One of the ways to measure employee productivity at a power utility like Eskom is to look at the power generation per employee.
With advances in technology, one would expect power generation per employee to increase, which is seen at many international power generation companies.
Not so in South Africa. In 2004, Eskom produced 232,443GWh of electricity with 31,475 employees. Fast forward 15 years and Eskom is now producing 218,939GWh with 46,665 employees.
This means that the power generation per employee declined from 7.39GWh in 2004 to a current level of 4.69GWh.
The graph below shows how Eskom’s productivity declined over the last 15 years.