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If you are interested in tapping into the competitively priced talent on offer in the South African market, one good option to consider is hiring staff via an employer of record in South Africa.
Because an employer of record (EOR) hires staff on your behalf, taking care of their onboarding and payroll in the process, meaning you can get overseas workers in place without needing a local entity. If you require assistance with finding good people, your South Africa EOR will also be able to provide recruitment services.
As well as the convenience of having overseas workers employed quickly, hiring via a South Africa employer of record also comes with the benefit of your EOR guaranteeing proper implementation of all local laws and regulations, eliminating many compliance-related concerns you may have.
South Africa is one of the largest and most-advanced economies in Africa, with the second-highest GDP on the continent. It is also among the top six most populated countries in Africa, with over 60 million people by mid-2022.
The country is well known for its significant mineral wealth, with the likes of gold, platinum diamonds among its most valuable exports, while timber is another key primary good for the export market.
It is also a major producer of agricultural goods, with a variety of produce and processed foodstuffs exported in large volumes.
South Africa also has a significant industrial base, with iron and steel, cars, chemicals, and textiles among some of its other notable exports.
It is also a major hub for international trade, with Durban and Cape Town being two of the busiest container ports in Africa, meaning that it is an ideal base for production activities.
Beyond that, many skilled workers in South Africa struggle to find reliable employment, meaning that there is a pool of well-qualified talent on offer, with local salary expectations often highly competitive compared to other markets.
Moreover, for companies from English-speaking countries, or which primarily do business in English, another major benefit of hiring staff through an employer of record in South Africa is the fact that English is the main official language in the country.
If you need an employer of record in South Africa, contact us today. Or read on to find out more about your employee outsourcing options in this important African market.
What is an employer of record in South Africa?
An employer of record in South Africa – or South Africa EOR – works with a client to help them find, hire, and administer local staff, who report directly to the client as if they were working directly for them.
Note that a South Africa employer of record can also be known as a professional employer organization (PEO).
SEE ALSO: The best international PEO services
A South Africa employer of record will therefore take care of payroll, benefits, compensation, unemployment claims, oversight of statutory leave, and many of the other complicated aspects of managing staff anywhere.
Such a service comes with a fee – generally on a monthly per-employee basis. While that will usually be significantly less than the costs associated with establishing and managing a local entity, even in the absence of significant financial savings, such an arrangement comes with the benefits of being much more convenient and allowing market entry to be completed rapidly.
It also comes with significantly less risk, with a good employer of record in South Africa guaranteeing compliance with all local regulations and norms as part of any service agreement they offer.
Moreover, an employer of record in South Africa will have expert local knowledge that the client can tap into, potentially helping when it comes to selecting local partners or providers to work with.
Should moving into South Africa be the first step on a trajectory that involves expanding into other markets, working with a provider that has a presence or connections elsewhere is likely a good choice. Because when the time comes to expand further, you will be able to rely on them to provide the support you need there, too.
Employment regulations a South Africa EOR will oversee
Among the employment regulations that your employer of record in South Africa will comply with are the following:
Maximum hours: In South Africa, the maximum working week is 45 hours long, based on a five-day week of nine hours per day (excluding lunch break), or eight hours per day for a longer week. No employee is obliged to work longer than 45 hours peer week.
Overtime: Under South African law, overtime is voluntary and must be agreed between the employer and the employee. Your South Africa EOR will also have to oversee that overtime maximums of three hours of daily and 10 hours weekly are complied with, while any overtime performed must be paid at 1.5 times the standard rate. On Sundays and public holidays, that rises to twice the standard rate.
Minimum wage: As of 2022, the minimum hourly rate for employees stood at 23.19 South African rand (approximately US $1.40 at time of publication), which your employer of record in South Africa will enforce.
Employment contracts: Under South African law, a written contract must be provided to an employee no later than their first day of full employment. Certain specifics about the job must be included within the contract – something that a South Africa employer of record will be able to handle.
Paid leave: In South Africa, employees are entitled to 21 consecutive days of leave during every 12 month “leave cycle,” of which the first commences from the moment of employment. At the end of a leave cycle, a new one commences, and that allowance is restored. The period of annual leave must be agreed between the employer and the employee.
What are the alternatives to hiring staff via a South Africa employer of record?
The main alternative to hiring via a South Africa employer of record is to establish a local entity and hire those staff directly However, you may still benefit from the assistance of a South Africa EOR,
Because an employer of record in South Africa will often also offer recruitment services as a standalone service. Meaning that you can still tap into their expert local knowledge and established recruiting network to find the staff that you need.
Moreover, should you be intending to later expand into other markets, by establishing a relationship with a South Africa EOR that also operates elsewhere, that provider may also be able to support you when you expand – at which point you may find that hiring through an EOR is the best option.
Many investors who intend to establish a local entity and hire local staff directly choose to start out with an EOR, so that they can get to work sooner as well as get to know the local market. So even if you are intending to establish a permanent operation there, you may still wish to start out by hiring via an employer of record in South Africa.
Serviap Global can be your employer of record in South Africa
At Serviap Global, we can act as your employer of record in South Africa and hire staff for you through our local entity. We can also help you with recruitment services in the country.
We help businesses employ local staff in dozens of countries across six continents, with a network of trusted partners helping us reach almost any country where we don’t have our own office.
Contact us today to find out more about how we can assist you.