Employer of Record services in South Africa: How businesses are expanding with ease
South Africa is gaining traction as a go-to destination for global hiring, thanks to its skilled workforce, cost-efficiency, and strategic time zone alignment. However, navigating the country’s unique employment landscape can be complex without the right support. In this blog, we explore how businesses are leveraging Employer of Record (EOR) services to hire talent in South Africa.
From compliance considerations to success stories, discover why partnering with an EOR like Teamed could be the key to expanding your team effortlessly.
Why South Africa is an ideal destination for global hiring
- Access to a diverse, skilled talent pool
With over 60 million people and a multilingual workforce, South Africa produces highly skilled professionals across sectors like IT, data science, and business development. Annually, its universities graduate 200,000+ candidates, including specialists in high-demand fields.
“Teamed has definitely helped us transform our hiring process. It allows us to cast the net so much further and target talent we know will be beneficial to our business, regardless of where they’re based.” – HR Team, MyTutor
- Strategic time zone advantage
South Africa operates in GMT+2, ideal for European businesses while overlapping with North American schedules for late-afternoon collaboration. This time zone convenience benefits industries requiring real-time communication, like customer support and software development.
- Cost-efficiency in hiring
Labour costs in South Africa are significantly lower than in Western markets, offering businesses opportunities to optimise their budgets without compromising on quality. Lower operating costs also make it a viable destination for scaling teams globally.
Key considerations for hiring in South Africa
Labour laws and compliance
South Africa’s labour laws differ greatly from the “at-will” employment practices found in countries like the US. Employers need to account for:
- Notice periods: The notice period can be agreed upon between the employer and employee, but legally it should adhere to the minimum requirements based on the length of service.
- Severance pay: Employers are typically required to provide severance during retrenchments. Severance pay regulations can vary, and specifics may depend on the employment agreement and relevant labour laws.
- Probationary periods: While probation periods are common (and can’t exceed 6 months), they must allow for proper feedback and fair assessment of the employee.
“Teamed enabled us to navigate compliance challenges with ease. From probation periods to tax compliance, they take care of everything and allow us to focus on core business areas.” – Senior Manager, CT:
Payroll and taxes
Employers in South Africa must navigate payroll intricacies, including:
- Currency: Salaries are typically paid in South African Rand (ZAR).
- Employer contributions: These include the Unemployment Insurance Fund (UIF) and Skills Development Levy, which support social programmes and workforce training.
- Bonuses: While not mandatory, many employers offer a 13th-month bonus, often paid in December.
Rather than navigating these complexities independently, businesses increasingly turn to an Employer of Record (EOR) to streamline payroll and compliance.
Operational challenges
One unique aspect of South Africa is the ongoing challenge of load shedding (scheduled power outages). Businesses hiring in the country should:
- Prioritise candidates with access to backup power solutions.
- Offer allowances for uninterruptible power supplies (UPS).
These proactive measures ensure business continuity despite infrastructural challenges.
Hiring in South Africa: Using an EOR vs. setting up a local entity
The Employer of Record (EOR)
An EOR is a third-party service provider that handles all aspects of employment for international teams. Key benefits include:
- Speed: Onboard employees in as little as 24hrs, compared to months for setting up an entity.
- Compliance confidence: The EOR assumes responsibility for labour law compliance, including contracts, taxes, and payroll.
- Flexibility: Scale your workforce up or down based on demand without the administrative burden of entity management.
“Teamed feels like an extension of our team. Their expertise and support ensure a smooth hiring experience.” – Rachel Gething, People Operations Manager, Data Science Talent
Setting up a local entity
Establishing a local entity provides greater control but involves higher costs and time investments. This option is typically suited for businesses with long-term plans to operate in South Africa.
Hear from companies hiring in South Africa and beyond
CT scales with confidence
Facing talent shortages in the UK, CT partnered with Teamed to hire auditors in South Africa. Teamed managed compliance and onboarding seamlessly, allowing CT to expand globally without operational delays. “Teamed’s quick responses and in-depth knowledge have allowed us to streamline our onboarding processes and eliminate a lot of the red tape we would have previously struggled with.” – Senior Manager, CT:
Data Science Talent grows globally
Data Science Talent needed to hire a key business development professional in South Africa while navigating tight deadlines. Teamed provided flexibility and compliance expertise, making the process seamless. “They worked around our timelines and made the process smooth. Their human-centric approach feels like an extension of our own team.” – Rachel Gething, People Operations Manager, Data Science Talent
MyTutor retains top talent
When a senior engineer at MyTutor moved to Spain, Teamed facilitated the transition, ensuring compliance and operational continuity. The partnership has also helped MyTutor hire globally.
“How quickly we can get things set up is a real plus for our team. The speed at which Teamed moves enables us to facilitate international moves, even at short notice.” – HR Team, MyTutor
How Teamed supports your hiring in South Africa
Teamed’s Employer of Record (EOR) services are designed to simplify global hiring and compliance, offering:
- Streamlined onboarding: Quick and compliant employee onboarding tailored to your business needs.
- Compliance expertise: Stay ahead of labour law changes with Teamed’s legal and HR specialists.
- Dedicated support: A human-centric approach with responsive, knowledgeable assistance every step of the way.
- Scalable solutions: Flexibly hire and manage teams as your business grows.
Take the next step
Hiring in South Africa presents immense opportunities for businesses to access a skilled, cost-effective talent pool. With Teamed as your EOR partner, you can navigate the complexities of compliance and onboarding effortlessly, focusing on what matters most — growing your business.
Let’s chat about your hiring goals in South Africa!
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