South Africa represents a world of opportunity for businesses of all kinds, but before you hire a contractor, here are a few questions you should ask.
South Africa is an excellent location if you’re planning to hire independent contractors. The country is home to highly qualified and experienced freelance professionals across a wide range of industries each of which can offer a host of valuable services at a competitive price. With digital technology making cross-border collaboration easier than ever, there has never been a better time to cast the net wider in your search for a contractor. However, before you do here are six questions you should ask.
1. What’s the cost of hiring in South Africa?
When it comes to the cost of hiring in South Africa you need to look beyond the basic price in dollars, pounds, or Euros. If you’re looking at it purely from the price, there are other countries where the cost of labour is lower. However, you must consider South Africa’s value proposition as a whole.
South Africa promises an upwardly mobile, highly skilled, professional workforce with a strong work ethic, good language skills and corporate culture that will be familiar and will match up easily with your own company.
It is highly skilled with access to professionals from a wide range of disciplines, from basic customer service to more advanced services such as software development. As such, South Africa will offer a high-quality output at a considerable discount compared to domestic approaches.
The cost of hiring in South Africa varies depending on what sector you’re working in and the services commissioned. However, in general, you can expect a discount of between 50 and 60% on labour costs in the West.
2. What services do you want?
Different outsourcing companies offer different services. Some of the most popular involve customer service with companies outsourcing their help desks to cheaper destinations.
South Africa offers an attractive destination as the time zone matches well with Europe and professionals here have a high proficiency in English. For those in the US or further afield, having a customer service branch in South Africa can keep lines open 24/7 rather than having to pay people extra to cover night shifts.
South Africa is also ideal for tasks that require a higher level of qualifications or expertise. A rapidly growing IT sector means it’s a popular outsourcing location for
technology services such as software development. Good internet services and a convenient location facilitate fast and easy collaboration essential for any complex technology project.
3. What are the regulations?
Wherever you are based you still have to make sure the contractor is correctly classified. The Labour Relations Act in South Africa distinguishes between an employee of a company and a contractor who is hired to do a job. If you are found to have misclassified a worker, you could be subject to penalties from the courts/
Full-time employment in South Africa is generally regarded as a contract of service in which a contractor fulfills a particular contract which, once completed, brings the working relationship with that company to an end. Courts will use various tests to check any activities that venture beyond the contract terms to ensure all workers are classified correctly.
Generally speaking a contractor will be someone who is much more independent from the company. They will use their equipment, will be more likely to work remotely, and will not be entitled to benefits. People may be regarded as employed if they receive benefits, use company equipment, and are subject to a high degree of control in their working practices from the main company.
4. How will they be paid?
You will of course need to pay them. There are several options each of which varies in terms of their price, speed, and efficiency.
• Bank transfers: You can try sending money directly from your bank to the contractors, but this can take time and often involves service feeds. Costs will also be incurred due to exchange rates. Alternatively, if this is likely to be an ongoing relationship with contractors in South Africa you can open a South African bank account. However, you would have to do this in every country you operate.
• Digital money transfers: A new generation of digital money transfer solutions offers fast and affordable transfer of money. Platforms such as Wise and PayPal set out to ensure money can move quickly and affordably across borders. Many of these are virtually instant. However, you would have to check if your chosen platform is available in South Africa.
• International Money Orders: This has long been the traditional way of sending money physically. Contractors would have to go to a Western Union or bank to buy the money order, and then deposit it in their bank. This can be relatively expensive and takes time.
When dealing with contractors, it can be useful to hire a local intermediary company
to work with them. An Agent of Record, for example, can ensure all contractors are classified correctly under labor laws and that they are paid on time. Your day to day working relationships with these workers will remain unchanged. However, a domestically based company with expertise in this market will take on the legal and administrative responsibilities relating to contractors.
This can be important as, with remote work becoming more popular and many workers in South Africa and elsewhere opting for freelance careers the line between employee and contractor can become blurred. Authorities are keen to crack down on so called disguised employment in which people effectively work full time for a company but are classed as contractors. An Agent of Record can help you clearly define the working relationship to make sure you’re not unintentionally using employees.
5. How will you collaborate with them?
How you collaborate with the worker may vary depending on the type of work they are doing. A software developer, for example, might need to be regularly on call for meetings and progress updates. Cloud-based collaboration tools can help expedite this process allowing you to keep track of progress and all work done.
Video conferencing platforms such as Microsoft Teams enable instant communication between all contractors. Their use has expanded rapidly in recent years and has fuelled the rise of remote working. As technology improves, teams of people in several different countries can now easily communicate as if they were sitting in the same room. Documents can be shared online with all sides editing it to avoid duplication.
Technology makes remote collaboration easier and more effective than ever. Even so, working with a spread-out team of professionals in multiple locations can be difficult. You’ll need to decide on what platforms you’ll be collaborating on to ensure you have common platforms to which everyone can have easy access.
6. How will you maintain security?
Last, but not least, we need to talk about security. When working with contractors in any country you need to safeguard the security of the overall system. Each contractor represents a new endpoint that will have to be secured.
When working with someone in South Africa you need to understand what technology they will use to do their work, and in what ways they will be connecting with your centralized IT system. Doing this will enable you to better understand the risks and calibrate accordingly.
Hiring independent contractors in South Africa
Overall, South Africa is fertile ground for any contractors. The number of freelancers in the country is growing rapidly as people seek a more flexible work/life balance. That means there is a healthy pool of skilled professionals to choose from. As long as you understand the market, regulations, and specific challenges you might encounter, there’s nothing to stop you from securing a healthy and profitable relationship that benefits everyone.
