Businesses in the UK and Europe are struggling to close a critical gap in skills and talent, especially when it comes to technology.
The digital economy is quickly changing how businesses work, not least in the way they source employees. Thanks to the age of remote work, even the smallest enterprise can now access talent pools all over the world, with one of the most popular destinations being South Africa. The prospect of finding top talent at an affordable price could be critical in helping businesses cope with an increasingly challenging economic outlook.
The talent challenge
Business leaders could be forgiven for feeling a little stressed at the moment. They struggle against rising labour costs, higher energy bills and an increased tax burden. At the same time, falling immigration means accessing domestic talent is both difficult and increasingly expensive. With pressure rising from all sides, many are turning to remote hiring practices to expand their talent pool and ease the pressure on struggling financial departments.
The importance of talent in your team should not be underestimated. Today’s business world is increasingly sophisticated and multidisciplinary, which means even small businesses need teams with a wide range of skillsets, including covering technology, software development and marketing. Estimates suggest that the UK’s skills gap is costing the economy £39bn annually in lost GDP and productivity. If unaddressed, it could rise to more than £120bn. Nowhere is this being felt more than in the tech sector, where experts believe the UK could be losing out on £68bn in lost GDP due to a lack of skills.
For businesses fighting on the front line, that tech skills deficit can be an existential threat. Digital technology is unavoidable in the modern world. Love it or hate it, you can’t ignore it, and virtually every business must find a way to integrate it into its operations to remain competitive.
That’s easier for some than others. Skills are in high demand. Top talent can command high wages. Big businesses hoover up all the top talent, leaving small and medium businesses struggling to make do with what’s left. The harsh truth for some businesses is that, even if they are profitable today, the digital skills gap could make it impossible to compete over the longer term.
To compete in the digital economy, SMEs have to think outside the box and look for ways to attract top talent for less. South Africa offers a way to do it.
Remote workers in South Africa
South Africa is perfectly positioned to help businesses in the West close their talent gaps. The time zone is well-suited to Europe and the US, enabling seamless collaboration. Digital infrastructure in the country has improved greatly, with superfast internet now being the norm across all major cities. Talent is widely available. South Africa has invested heavily in its
education system, with more people graduating at the degree level than ever before. What this means is that a growing class of ambitious and highly talented individuals are moving into the workplace eager for opportunity.
However, with unemployment levels still stuck in double digits, South Africa’s workforce has limited options at home. The domestic economy is growing, but it’s still far from being in a position to offer talented professionals the type of opportunities or wages they’re looking for.
For companies in the West, this is a great opportunity. South Africa has talented professionals with the skills they need and who are open and eager for work. From the worker’s point of view, foreign companies coming into the country can pay much more than domestic competitors and offer much more attractive career paths.
The ability to work remotely with professionals within South Africa helps everyone. It gives foreign companies access to new sources of talent. It gives workers the chance to earn higher wages than would otherwise be possible, and it helps the government keep its young talent in the country.
As such, the government has been highly supportive of overseas companies looking to hire remote staff in South Africa. Companies can benefit from a range of attractive benefits and incentives aimed at encouraging inward investment that creates jobs.
How to hire remote staff in South Africa
The business case for hiring in South Africa is unarguable. The next question is, what’s the best way to recruit that talent?
The first and most common option would normally be to hire freelancers. Job boards such as Upwork or People per Hour are increasingly becoming international in nature, with freelancers and contractors from all around the world. However, quality may be variable depending on the stock of freelancers operating on the platform.
Direct hiring is straightforward and cost-effective. Payment can be made on arrangement with invoices typically paid by international bank transfers or money transfer sites. In this case, all you have to think about is the best way to transfer the money and the likely exchange rate or transfer fees. All taxes are managed by the freelancer themselves.
Organisations such as Agents of Record can help you manage teams of freelancers. These handle all the administrative tasks, including monitoring compliance, onboarding and background checks. Some AORs can also help with talent sourcing, taking you directly to the talent.
Hiring employees in South Africa
If your needs are a little more full-time, you may want to consider using an employer of record (EOR). This allows you to work with remote employees without having to register a legal entity within South Africa, manage PAYE and handle all legal paperwork. The EOR serves as
the official employer for tax reasons. It will pay workers directly and handle all the legal and administrative duties that an employer would normally manage.
All you have to do is pay the EOR fee, which will normally be the wages, plus a percentage of the salary, and you’re ready to go. The working relationship may be much like any other employee.
Digital technology has transformed the range of job functions you can now work with. The ability to interact fluidly in real time with workers means you can hire almost any type of professional from a call centre agent to an administrator, legal professional or tech expert. They can supplement your domestic team, covering critical skills gaps that would have previously been unavoidable. Hiring remote staff has now become a common part of doing business. By hiring staff in South Africa, you can transform the horizons of your business and access talent that can take you to the next level.