Businesses in the UK are hiring remote staff in South Africa to help streamline their costs, but also broaden their horizons.
Much has been written about the rise of remote work. Some business leaders see it as a chance to give their employees a better work/life balance. Others bemoan the lack of oversight it gives them. When used effectively, the age of remote work can liberate businesses and employees, providing a freer flow of talent and opportunities for everyone. It can do this by going international and opening up job markets in places such as South Africa.
Hiring remote staff in South Africa
UK businesses face pressures from all sides. Labour shortages and taxes have pushed up the cost of employment, and talent is at a premium. An ageing population, coupled with efforts to drive down migration, make it difficult to access the workers they need at a price they can afford, especially when it comes to high-skilled professionals such as IT, marketing or software design. According to some reports, around 90% of UK SMEs say they are struggling to source talent. Just under a third of businesses have slowed down hiring to cope with rising employment costs. Today’s SME talent is hard to find and expensive.
For many, the answer lies overseas. Outsourcing has long been a way to reduce costs, but until recently, it has focused mainly on relatively simple functions such as customer service or administration. Even then, quality has been hard to control with many companies accepting a sacrifice in customer satisfaction to save money.
The age of digital transformation, though, has made it easier than ever to work with overseas professionals. Jobs boards connect SMEs in the UK with contractors and freelancers from anywhere in the world. Online communications now enable free, instant face-to-face collaboration through instant messaging, video conferencing and document sharing. Companies are now routinely managing projects using stakeholders from several different countries at once.
Hiring remote staff in South Africa has particular challenges. Not only does the country share a language, but its culture and economics are broadly familiar to the UK. South Africa’s time zone is only a couple of hours away from the UK, which means the working days match up nicely.
Talent is freely available. The number of graduates in South Africa is on the rise, which results in a young, highly qualified and ambitious workforce eager for opportunities. Professionals of all kinds, from technology experts to marketing professionals and customer service agents, can be sourced at a sizeable discount. It saves on the bottom line, while also helping SMEs close their talent gaps and accelerate their growth ambitions. In other words, hiring remote staff in South Africa is about much more than cutting employment costs – it’s about hiring skilled individuals who can help your company compete at the highest level.
Creating jobs in South Africa
The benefits flow both ways. South Africa’s workforce has plenty of ambition, but not enough opportunities. Although the last few years have brought stability to the country, with more focus on growth, unemployment remains in double figures, particularly among young people. Graduates entering the workforce face an unenviable choice. If they want to find the opportunities that match their goals, they may need to move overseas. As with many developing countries, therefore, South Africa faces an ongoing struggle to stem the tide of talent overseas.
Attracting remote work from international companies is a way to do just that. It brings high-paying jobs from developed countries in Europe or the US into the country, creating jobs, opportunities and growth. For professionals, those international companies can offer them wages which domestic companies simply can’t match.
The BPO sector, therefore, is becoming a key component of the government’s growth plans. Since 2015, the BPO sector has already attracted over 100,000 jobs, with tens of thousands of new opportunities being created every year. The government has sought to support this sector with a range of incentives and tax credits, such as the Global Business Services (GBS) program, which offers tiered grants and support for companies creating qualifying jobs in South Africa. To be eligible for this scheme, companies must generate a significant proportion of their revenue servicing overseas clients. The net result is an extremely attractive environment for overseas businesses. Costs are low, talent is available, and the regulatory environment could not be much friendlier.
How to hire remote staff in South Africa
For most UK companies, the first and simplest way to hire remote staff in South Africa is via the freelance market. Communication can be managed online, with each task being assigned and paid on a one-off basis. The freelancer handles his or her own tax affairs, with the only complication being foreign exchange costs.
This approach basically extends a company’s talent pool. When bringing in contractors, no longer do you have to focus on your surrounding area; you can look all over the world.
As the market evolves, though, these relationships become more formalised with UK businesses building up their own pool of full-time employees in South Africa. This represents a more integrated take on the traditional BPO industry. Rather than focusing on single functions using staff rented out by the BPO company, UK businesses are now building complex multidisciplinary teams to work with their domestic employees.
Conventionally, this could have been expensive. To employ South African workers directly, you would normally need to set up a foreign subsidiary, which could counteract any cost savings achieved through lower wages. However, you can avoid these costs by using Employers of Record – intermediaries who act as the official employer of your workers. The EOR pays the wages, handles admin and employer-side taxes, while you, as the hiring
company, manage the day-to-day work. Because the worker is employed, for all legal purposes, by the EOR, there is no need to set up a legal entity. You’ll also be protected from any regulatory risk arising from the employment process.
Hiring remote staff in South Africa, therefore, is easier than ever. It’s a fast and cost-effective way to minimise your employment costs, access new talent and streamline your operations. Thanks to first-rate digital communications, a favourable regulatory environment and extensive support infrastructure, South Africa offers a new way to furnish your company with the talent it needs to be successful.
