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Hire employees in South Africa
Directly employing employees in South Africa involves setting up a local subsidiary. It is time-consuming, expensive and highly complex. An Employer of Record can help you avoid these issues.
If you want to hire in South Africa, you need to make sure you do so in a way that complies with all local regulations. To do that you need to partner with a company with local insights. Having an Employer of Record means giving you access to an expert company that will take on all the legal and administrative responsibilities of handling employment in South Africa.
Future Teams will ensure you remain legally compliant without having to establish a legal entity.
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Outsourcing to South Africa made easy
Outsourcing to South Africa is a great way to access high-quality, cost-effective talent. We make it easy to hire remote staff in a vast range of roles from customer services to financial services, IT support, digital marketing, and much more.
Quick Facts
South Africa offers a host of compelling reasons for companies looking to hire employees
The most obvious and most common reason why companies outsource is due to the cost incentives. South African salaries are 50-60% less than their UK equivalents.
South Africa is only one or two hours ahead of the UK (depending on the time of year), which means you can outsource all sorts of operations with little disruption. Communication can happen during work hours and people can be on call whenever they are needed.
Another compelling draw for South Africa is the clear cultural similarities with the UK. South Africa’s society is highly educated, multicultural and hard-working. Many of the most listened to and watched television programs, films and music closely align to the UK. Working with people in South Africa is an easy cultural fit and can foster good project results and easy collaboration
South Africa’s workforce is highly trained with an above-average number of people in further education and a growing number of graduates. Most importantly there is a good supply of workers in a range of disciplines from customer services, to marketing, IT, accounts, and software development. The range and depth of the skills on offer make South Africa an attractive destination for complex and demanding jobs.
The rise of digital technology is breaking down borders around the world. Thanks to video conferencing software and other remote collaboration tools it is now possible to engage with talent around the world. Today businesses may be routinely working on projects with a multi-disciplinary team of people working in many different parts of the world.
South Africa represents a vibrant market, and is often referred to as a gateway to Africa. Outsourcing operations may not only support your work in the UK, but it can also be the first step to expanding your work into the new and exciting markets on offer around Africa.
What is an Employer of Record (EOR)?
An Employer of Record helps foreign companies manage employees based in South Africa. An EOR will enable you to ensure compliance with all employment regulations without establishing a legal entity.
It’s a fast and easy way to manage South Africa-based employees. As an Employer of Record Future Teams will become the official employer of your workers and as such will assume all legal liabilities for them.
We handle all legal responsibilities including managing payroll, annual leave, and taxes. We will ensure compliance with regulations and keep you updated on any changes to the law as and when they occur.
Why use an employer of record?
An Employer of Record is a fast and effective way to hire people in South Africa. Because you do not need to have an established legal entity in the country you can get started right away without the need to set up a subsidiary.
We are therefore a great option for someone who is:
- Moving into the country and wanting to test the waters before committing fully.
- Only has a small number of employees in South Africa.
- A small company with limited resources that wants the benefit of a fully functioning HR department.
- Wants support from an expert company with a full understanding of South African employment law.
- Wants to avoid compliance issues through a lack of regulatory knowledge.
Working with an EOR offers a flexible way for companies to hire and onboard employees without having to set up a legal entity or incorporate a company. With a dedicated Employer of Record on your side, you can move forward confident in the knowledge that an expert company is handling all the administrative and legal issues for your employees.
Salaries in South Africa
In general, salaries in South Africa are around 50%-60 lower than in the UK. We can provide guidance on salaries for those businesses looking to appoint us as their Employer of Record.
Staff entitlements in South Africa
Full-time employees are entitled to:
Annual leave: Employees will be entitled to 15 annual leave days, plus South African Public holidays. (We can request that they take UK bank holidays off if this works better for you).
Maternity leave: Maternity leave starts four weeks before the due date and employees are entitled to four consecutive months of leave. All this leave is unpaid but employees can make claims to the unemployment insurance fund. Employees will not be able to start work again within six weeks of the birth without special clearance from a medical professional.
Parental leave: 10 consecutive days of unpaid leave.
Sick leave: Employees are entitled to 30 days of sick leave at full pay over three years. This only kicks into effect after the first six months of work. During that initial time, an employee gets a day’s sick leave for every 2 months worked.
Employer of Record Vs Outsourcing
When using us as Employer of Record you will handle recruitment and salary negotiations yourself. Although we will be the employee’s legal employer, our contract with you means you must allow us to meet our obligations as an employer in South Africa. Staff are employed as permanent members of staff, which means all of the rules around permanent employees in South Africa, such as grievance procedures, unfair dismissal, and redundancy regulations must be followed.
When outsourcing with Future Teams we will handle the recruitment and salary negotiations for you. You will have an outsourcing agreement with us whereby the employee’s wages and our fees are combined into one single invoice. Due to the nature of the agreement between us, we can employ employees in a manner whereby 30 days’ notice can be served to terminate their contract at any time, without the need to follow a grievance procedure or risk falling under redundancy regulations.
How to Hire Talent in South Africa
Future Teams make it easy to outsource to South Africa and hire great talent for your business. Our South African outsourcing solution starts by us recruiting for the roles you wish to outsource and setting up interviews with the top candidates. Your preferred candidates are hired directly by Future Team’s in-country entities. We take care of contracts, payroll, local taxes, employment legislation and all ongoing HR. Employment regulations can be very strict in South Africa. Using our services ensure your business remains complaint at all times. You will have a simple outsourcing agreement with our UK entity and will be billed monthly in GBP for staff wages. All staff are taken on with a 3 month probation period, where by one week’s notice to cancel their contract can be given if they do not perform. After probation staff members must be given one months notice to end their contract. It is worth noting that a grievance procedure does not necearaily have to be followed.<h4><b>What roles can be outsourced to South Africa? </b></h4>
<span style=”font-weight: 400;”>Companies are choosing South Africa for a range of services and business activities. The most obvious comes in customer service and telecommunications with a growing number of companies switching outsourced teams from places such as India to South Africa. </span>
<span style=”font-weight: 400;”>A matching time zone plus an easy affinity with the English language allows for smooth communication with callers and reduces call abandonment. Workers in South Africa are fluent in English with a clear neutral accent which avoids the communication barriers that so often cause problems elsewhere. </span>
<span style=”font-weight: 400;”>However, the fascinating part of South Africa lies in the range and depth of talent available. Businesses can have access to a wide-ranging and varied pool of talent capable of providing support in an extensive range of disciplines. </span>
<span style=”font-weight: 400;”>South Africa’s growing IT sector means companies can access highly skilled professionals to offer dedicated IT support and help with large-scale digital transformation initiatives. </span>
<span style=”font-weight: 400;”>Digital technology is transforming businesses at a fundamental level around the world. However, the cost of digital transformation can be prohibitive for many small and medium businesses. To keep up with larger competitors, they need a way to transform their own operations at a fraction of the cost. </span>
<span style=”font-weight: 400;”>South Africa’s cheaper labor market provides access to highly skilled talent at a considerable discount. Communication can flow easily between all sides. Engagement with a remote worker in Cape Town might in all practical terms, be no different than a remote worker in London. </span>
<span style=”font-weight: 400;”>The widespread proficiency in English means there are plenty of professionals capable of providing content writing and digital marketing services. Whether you need web copy, social media management, or a complete digital marketing strategy, South Africa has plenty of highly skilled professionals who can offer high-quality services at a considerable discount compared to domestic providers. </span>
<span style=”font-weight: 400;”>Other potential opportunities can lie in financial services or business automation. Using experienced financial professionals smaller businesses can access dedicated and highly skilled professionals who can transform their accountancy departments making them a much more active part of business strategy. They can provide more agility to-the-minute financial reporting that gives your business a more accurate view of your true financial position. With better insights, you can make better and more profitable business decisions that will drive your company forward and prime it for growth in the future. </span>
<span style=”font-weight: 400;”>Business process automation, meanwhile, can take on the administrative burden of many different aspects of your business freeing you up to focus on more strategic activities that can foster improved growth. </span>
<span style=”font-weight: 400;”>The rise of digital communications means there are all sorts of compelling services just waiting to be outsourced. South Africa’s rich and diverse talent pool means companies can go beyond the traditional outsourced services and become much more ambitious. </span>
The cost of outsourcing in South Africa
South Africa has traditionally sat between developed Western economies and the traditional low-cost outsourcing powerhouses such as India and the Philippines. Until recently, therefore, it only had a small portion of the outsourcing pie. However, a few things are changing which means some companies are beginning to reevaluate how they see the country. The first is a question of priorities. Services such as call centers were among the first to be outsourced as companies sought to drive down their overheads. The emphasis was almost exclusively on cost, with companies looking to minimize operational expenses. However, customers were quick to complain. Language and cultural differences meant it could be difficult to understand some operatives over the phone. It led to call abandonment and impacted the relationships between businesses and their customers. Many other services proved to offer false economies. To cut down on marketing costs some businesses sent certain marketing tasks such as search engine optimization and content writing overseas. While the price was much lower than a traditional UK-based copywriter, the quality was often poor. Equally without a clear understanding of local regulations content could cause all sorts of legal compliance issues for companies. Search engines were also quick to identify poorly written content and factor this into their calculations. Businesses began to quickly realize that although the bottom line may look good initially, there were all sorts of legal, and reputational costs associated with a lower-quality output. Many began to look for alternatives. South Africa with its highly diverse and educated workforce, cultural similarities, convenient time difference, and language similarities represented a good option. It was still cheaper than locating in the UK, US, or Australia, but the quality of output was much better. In general cost terms, reports suggest, labor costs in South Africa are between 50 and 60% lower than in the UK, the relatively small premium they’d pay compared to other outsourcing locations represented excellent value for money. In short, therefore, South Africa provides a best of both worlds solution – high-quality services and products, at a fraction of the price you’d expect in the West.Working with contractors
If you’re working with independent contractors you need to make sure they are classified correctly. Contractors can be a good way to access a flexible workforce to provide you with skills as and when you need them. However, as work becomes more flexible and agile, the boundaries between freelancers and full-time employees. If you plan to work with someone for a prolonged period – either for occasional projects or for ongoing work – they can easily start to look like disguised employees. To avoid unintentionally falling into this category an Agent of Record (AOR) can help you manage the day-to-day details of the engagement. They can advise you on the best classifications and keep you up to date on any changes to the regulations.Staff entitlements in South Africa
When you sign your outsourcing agreement with us you will be agreeing to allow us to meet our obligations an an employer in South Africa. Full time employees are entitled to:- Annual leave: Employees will be entitled to 15 annual leave days, plus South African Public holidays. (We can request that the take UK bank holidays off if this works better for you).
- Maternity leave: Maternity leave starts four weeks before the due date and employees are entitled to four consecutive months of leave. All this leave is unpaid but employees can make claims to the unemployment insurance fund. Employees will not be able to start work again within six weeks of the birth without special clearance from a medical professional.
- Parental leave: 10 consequetive days of unpaid leave.
- Sick leave: Employees are entitled to 30 days of sick leave at full pay over three years. This only kicks into effect after the first six months of work. During that initial time, an employee gets a day’s sick leave for every 2 months worked. pay over three years. This only kicks into effect after the first six months of work. During that initial time, an employee gets a day’s sick leave for every 2 months worked.
Pricing
Find out how much we can save your business on recruitment and wage costs
Outsourcing
for clients looking for recruitment + a more flexible way of hiring
Custom
- Recruitment
- Onboarding to include contracts & payroll
- Ongoing HR
- Remote worker productivity software
- Pre-employment screening to include employer referencing, credit, fraud and criminal checks
- Cancel at anytime with 30 days notice (no grievance procedure required)
- No salary deposit required
Employer of Record
for clients who already have candidates ready to go
- Onboarding to include contracts & payroll
- Ongoing HR
- Remote worker productivity software + £15 p/month
- Pre-employment screening to include employer referencing, credit, fraud and criminal checks + £95 one off fee
- Full grievance procedure required to manage performance or terminate employment
- 2-month salary deposit required
from
£
800
per month
inc. of fees.
Plan your outsourcing strategy
South Africa’s outsourcing market is ripe with opportunity. Few other locations offer the same combination of low labor costs with a highly skilled, diverse, skillset.
To help plan your South African outsourcing strategy, download our PDF today.
Employer of record South Africa blogs
South Africa offers a host of compelling reasons for companies looking to outsource
Book a free consultation
A quick intro call to find out more about Future Teams and how we work
