Employer of Record Services

When outsourcing to South Africa, an employer of record service can be a crucial partner.

South Africa is quickly becoming an outsourcing hub for the world. Its attractive combination of high-quality services and affordable labour costs has seen this market take off in recent years. However, hiring and managing staff in South Africa can be complicated with an intricate network of laws and regulations to navigate. For foreign companies, it can be all too easy to make a mistake. That’s why your company could benefit by working with an Employer of Record.

What is EOR

An Employer of Record is a third-party company based in South Africa that manages the administrative and practical duties of managing your South African-based workers.

The EOR serves as the legal employer of those workers, which means they have full legal liability for complying with all regulations and making sure all relevant taxes have been paid.

Because the EOR assumes the status of a legal employer, it protects your company from any legal or compliance risks. Given the complexities of South African employment law and the need to keep up with the latest developments, it’s all too easy for foreign companies with limited sector knowledge to make mistakes.

With the EOR taking on the status of employer, you don’t need to set up a foreign subsidiary as might previously have been the case. Now you can simply pay the EOR a fee and focus on the work.

EOR companies can be found across all industries and can theoretically work across any industry and time frame.

Why South Africa

South Africa is rapidly making a name for itself as an attractive location to source high-quality professional workers.

Labour costs are between 50 and 70 the levels found in Western economies such as the US, UK and Europe.

High-quality professionals such as financial consultants, graphic designers or software developers at a fraction of the cost of their counterparts in the West.

South Africa’s location is perfect for both the European and Middle Eastern economies, with only a few hours’ time difference between them.

English is widely spoken with a clear and neutral accent that is easy for people to understand. In customer service operations, there will be no misunderstandings that have caused so much frustration when operations have been outsourced to other non-English speaking locations.

South Africa’s culture contains many similarities with the West, with plenty of familiar reference points making it easier to forge closer and more profitable customer relationships.

State-of-the-art technology makes communication quick and simple. Collaboration with a professional in South Africa is as easy as with any remotely based domestic employee.

South Africa’s commitment to quality comes with strong levels of government, strong action against fraud and best-in-class cyber security measures.

All in all, South Africa offers an excellent source of talent, at an affordable price and robust infrastructure facilitating seamless collaboration.

An EOR gives you an affordable and convenient route to access this market and grow your business.

Benefits of an EOR

1. Lower set-up costs: The EOR removes the need to set up a local subsidiary with all the expense and risks that entail.
2. Local knowledge: The EOR is staffed by HR professionals with an in-depth knowledge of the local market. The EOR can provide advice and guidance on recruiting talent and navigating employment law.
3. Legal compliance: The expertise of the EOR is vital in helping you stay compliant with all legal requirements, such as classification of workers and tax filings.
4. Legal protection: As the legal employer, the EOR protects your company from liability for any unintentional compliance problems.
5. Business focus: By taking on all the administrative tasks of your HR department, the EOR frees you up to focus on your core business activities.

You may choose to work with an EOR for all sorts of reasons, including:

• Business expansion: Moving into a new market is expensive and risky. Traditionally, businesses needed to set up a foreign subsidiary and recruit a locally based team of administrators, legal experts, financial and HR assistants. They would also need local marketing professionals to help adapt the business proposition to the new market. All this comes at a cost and involves a high risk of failure. Working with an EOR is a great way to dip your toe in the water and test market conditions before moving forward.
• Business Process Outsourcing: The BPO market has shifted emphasis in recent years from the low-cost hubs of India and the Philippines to other locations such as South Africa, which offer a more nuanced proposition based on quality and value for money. EORs help you recruit and manage a team of locally based professionals to manage whatever outsourced job functions you want.
• Hiring international workers: Reaching out to foreign countries is a good way to broaden your talent pool. Today, it’s not uncommon for businesses to regularly collaborate with professionals across the world. If you’ve hired various professionals in South Africa, an EOR provides a robust framework to manage all employment details.
• Managing mergers and acquisitions: When transitioning employees into another country or acquiring a South African-based company, an EOR can provide a safe and reliable mechanism to manage employees during the transition.

Whatever your goals, an EOR can provide full support and advice to manage your team effectively.