How to switch your EOR provider in Africa?
- Last updated: October 11, 2024
All Employers of Record are not built the same – and sometimes the best course of action for your business is to break ties and find an EOR better-suited to your needs.
But with a structure as sensitive as an EOR, especially in a foreign African country, the process of switching EORs must be approached cautiously.
In this article, we offer you a step-by-step guide and pointers for a successful EOR transition in Africa.
Why switch EOR providers in Africa?
Understanding the exact reasons behind your dissatisfaction with your current EOR goes a long in helping you make the right choice for a replacement. Some common reasons for switching EORs in Africa are:
- No flexibility/low flexibility – Your current EOR cannot adapt to your growing needs
- Compliance issues – You have encountered compliance issues because your current EOR was not always up to code with the latest legislation changes
- Payroll issues – There have often been errors in pay calculation, tax deduction and remittance, or payments have often been late, which affects employee morale and employee experience
- Poor communication – Admin-wise, you are not always aware of happenings within your company, and your employees are not properly briefed whenever changes occur
- Not easily reachable – It is difficult to get a hold of someone in charge whenever you have a question or wish to make a change
- Need more Africa expertise – Your current EOR is a global EOR, and they do not have the cultural understanding, and local know-how to properly support your growth in Africa
Is switching EORs a complex task?
Switching EORs is not as easy as signing up with an EOR for the first time. Companies looking to make a switch do not have the advantage of a clean slate and must deal with the challenge of transferring an existing, already complex system to another EOR’s hands. This includes but is not limited to the transfer of sensitive data, subject to applicable data rules, such as GDPR or HIPAA.
Oversights and human errors are more likely to happen during such a transition, which can cost companies. However, there can be no room for error when handling matters as crucial as labour regulations and international payroll; even seemingly small errors could result in fines or penalties.
How to choose your new EOR partner
By now, you most likely know what went awry with your previous EOR provider – and know how to avoid the same mistakes. Here are some other key considerations to help you select the right EOR for your business needs in Africa:
- Is the EOR provider present across Africa, or only in a select few countries?
- Does the EOR provider have in-depth local expertise?
- Can the EOR provider offer seamless payroll integration, or will there be parts of your existing payroll system that they won’t be able to integrate?
- Will the new payroll platform be able to handle both your employees and independent contractors?
- Will the new payroll system have an online employee self-service system?
- How flexible will the new payroll system be? Can it account for significant changes in your team size? Or different pay frequencies?
- How well will your data be protected?
- Will you have a dedicated Key Account Manager?
- Will you have a single point-of-contact across Africa?
- What is the EOR provider’s communication style?
- What is the EOR’s provider track record like?
- Has the EOR worked with companies in your industry before?
- If you are an NGO, does the EOR have experience working with NGOs?
- What employee benefits options can the EOR offer?
Can the EOR offer competitive medical insurance and life insurance, to begin with?
Step-by-step: how you can switch EOR providers
1. Inform your current EOR partner
It is never pleasant to let go of a service provider – but openness and good communication from Day 1 will significantly improve the experience. It may also save you from unexpected surprises, for instance, if a notice period was included in your Service Level Agreement (SLA), or if extra charges must be paid when switching EORs. Because switching EORs does entail more work than simply partnering with an EOR for the first time. Informing your EOR also means that the latter can get started on necessary paperwork and can properly communicate with your employees ahead of the big switch.
2. Transition planning
With such a significant change, a transition plan is key. This is something that your new EOR partner will initiate, and which your old EOR partner will comply with.
This transition plan will include:
- An employee communication plan (which we discuss further down)
- Employee benefits coverage continuity – matching employee benefits
- Any foreign employees on work visas
3. Communicate with employees
EORs act as your employees’ employer – at least on paper. Making the switch to a new provider can be destabilising for your employees, so it is important that they are properly briefed and reassured as to what the switch will mean for them. It will be important to have a clear plan, to explain it to your employees, and to give at least a vague timeline of when the change will happen.
4. Employment contracts
Your new EOR partner will need to draft new employee contracts for all your employees – whether they work on a full-time or part-time basis, whether they are local nationals or foreign nationals, whether they are permanent of temporary workers. This would also be a good moment to make any changes or updates to employee contracts that you deem fit, as an employer. Naturally, all these changes will need to be clearly communicated to employees prior to them being enacted. Additionally, if you are also working with independent contractors, your new EOR will need to ensure that new contracts are made and are compliant with the law.
5. Transfer employee records
This is a particularly sensitive task, because of the nature of the data being stored. Your old EOR should transfer employee records (including basic information and more detailed information like leave taken and remaining leave for example) in a way that is:
- Compliant with what the local law mandates with regards to employee data storage
- Compliant with larger data regulations like the GDPR
6. Resignation and rehire
Since your old EOR is your workers’ employer legally, there will need to be a “mass resignation” from your employees’ side. Otherwise, you would need to let go of your employees, which would legally entail compensation for all employees being let go of – even if they are later being rehired by another EOR you’ve partnered with. At this point, your new EOR partner should have decided on resignation and rehire dates so as to provide a seamless transition, one that does not leave your employees in wait for a few days in between.
7. Payroll review
Once your employees have signed the new employment contracts, comes the process of onboarding them on your new EOR partner’s payroll system.
When is the best time to switch EOR providers?
With the number of sensitive processes and people involved in an EOR provider switch, it is not surprising that timing should also play a role in such a decision. Here are some key considerations when deciding on when to make such a switch:
- Do you have a termination notice with your current EOR?
- Are there any foreign employees currently on a work visa attached to the EOR?
- What are the notice periods for your employees?
- Seasonality and business interests: is now a good time to undertake such heavy administrative changes or will it compromise productivity and the company’s growth?
- Are there currently any ongoing projects that cannot be disrupted by an administrative change such as an EOR switch?
Why switch to Africa HR Solutions?
Africa HR Solutions is the EOR partner you are looking for. We are not just service providers: we are an extension of your own team, ready to offer flexible (and award-winning) payroll solutions across 46+ African countries. Our wide coverage across the continent, as well as our in-depth understanding of specific African legislation and culture make us the best-suited to support your growth in Africa.
Join 400+ Fortune 500s, NGOs, SMEs, and international conglomerates who have chosen Africa HR Solutions.
Do you have questions? Send us a message to chat with one of our experts.
