Software professionals have become the MVPs of the business world, but talented individuals can be in short supply.
If the Industrial Revolution marked the 19th century, the 21st will be known for Digital transformation. Technology has transformed the world of work faster than any new invention since the arrival of steam. Tasks that used to take days can now be done at the touch of a button. Businesses can access real-time data, enabling them to transform their business operations and identify exciting new opportunities. However, this new digital age can be extremely unequal, with only the larger companies having the resources to access the talent they need. If smaller businesses want to keep up, they need to think differently. Countries such as South Africa and structures such as employers of record could hold the key.
The importance of digital transformation
It’s hard to overstate the importance of rapid digital adoption. Those businesses that move quickly have been able to bring products to market faster and more affordably than their competitors. They’ve used big data analytics to identify opportunities that might otherwise have been hidden and used automation to minimize their production costs. They can move faster, offer products more cheaply, and deliver better performance than their less digitally adept competitors.
So great has technology’s impact been that investors are now conducting digital due diligence. Aside from looking at a company’s balance sheet and sales performance, it will also assess its level of digital integration. Those companies that are lagging, so this theory goes, will struggle to offer good long-term performance even if the short-term picture looks good.
In other words, the latest technologies such as AI, machine learning, cloud computing, of big data analytics are no longer nice-to-haves; they are essential to the fortunes of all businesses. For small and medium-sized businesses, that can spell trouble.
Levelling the playing field
The importance of digital technology has transformed the world of work and placed a greater emphasis on skills. Companies will now need to master a wide range of competencies. It’s no longer enough to focus on your core business skill – such as manufacturing – you also need to be a digital powerhouse.
As a result, people with these skills are in high demand. Software developers have become the superstars of the workplace, with highly skilled individuals able to command high fees. They are in short supply relative to demand, which makes life difficult for small businesses that simply do not have the resources or the capital to compete.
Software developers in South Africa
Having access to software developers, either in-house or on a contract basis, can be beneficial for companies of all sizes. The ability to embed digital technology at every level of business operations can reduce waste, streamline operations, and boost performance. Companies are spending millions on everything from new apps to specialist CRMs, AI tools, and much more. However, major software developments such as these are inherently risky and come with a notoriously high failure rate. Any business investing in these technologies needs the ability to invest heavily with no guarantee of returns. Furthermore, skilled software developers are few in number and high in demand. For many small businesses, finding people with the skills they need is neither practical nor affordable.
To plug this gap, companies are looking overseas to places such as South Africa. The government has invested heavily in the country’s technology to the point that in the cities, it rivals any country in the world. Its workforce is highly tech-savvy with a healthy number of highly competent software professionals. However, opportunities are limited, which means they are eagerly looking for new work opportunities.
Add to that wages which are typically around 50% the levels in the UK and other Western companies, and you have an excellent opportunity to access top talent that is affordable, available, and ready to work.
Hiring software developers in South Africa
For many businesses, the first point of call is the freelance market. Working with contractors is easier than ever. For one-off projects, collaboration could be every bit as simple as with a domestic freelancer. You engage with each freelancer online and pay invoices directly.
However, for more regular working relationships, a more structured arrangement is necessary, which is why businesses are turning to Employers of Record (EORs).
The concept behind an EOR is simple. It serves as the legal employer for all your workers in South Africa, which means they pay their wages, manage onboarding, PAYE, benefits, and reporting while you manage the workforce. Legal liability for the employee rests with the EOR, which means there is no need to have a legal entity within the country to act as the employer. It also shields you from any regulatory risk if you encounter any compliance challenges, such as issues with worker classification.
EORs have been used as a way to facilitate fast, easy, and low-risk access to the South African labour market. They have long been associated with the business outsourcing sector as businesses seek to offshore certain business processes at a more affordable rate. However, are talent sourcing requirements become more complicated, they are being used to cover a much wider range of professions from customer service to finance and, of course, software development.
For many, they represent a natural progression in the working relationship from freelance software professionals working on in-house projects to full-time teams helping to manage digital transformations at a more affordable rate.
Working with an EOR manages to level the playing field by offering small and medium-sized enterprises the opportunity to acquire talent that might previously have been unavailable or unaffordable. In doing so, it opens up the benefits of digital transformation to companies of all sizes – not just the biggest players. It protects companies from the regulatory risks of working overseas and removes the need to shoulder the costs and risks that come with setting up a legal entity within the country. If you’re a business looking to transform your company but have limited resources this an EOR can open the door to a host of new opportunities.
