How to switch your PEO provider in Africa?
- Last updated: November 1, 2024
Your PEO is a foundational part of your business success: a good PEO will support your growth even when you aren’t performing too well. A poor PEO will drag you down even at your strongest. So, it is crucial to periodically review your PEO’s performance and to take decisive action when you find it lacking.
In this article, we show you why, how, and when to switch to a new PEO provider in Africa, and how to find the PEO partner that will help you harness Africa’s potential at last.
Re-evaluate your current PEO’s performance
When evaluating your current PEO partner’s performance, consider the following:
- Flexibility: Is your present PEO able to adjust to your current needs? Will they be able to adjust to your growing needs in the future?
- Payroll problems: Have there been frequent mistakes in tax deduction, remittance, and pay computation, as well as frequent late payments?
- Inadequate communication: As an employer, are you always informed of events occurring in your company? Does your staff receive the necessary updates on these changes?
- Contact: When you have a concern or want to make a change, how easy is it to get in touch with your contact person?
- Compliance difficulties: Is your current PEO always up to date with the most recent legislative developments?
Does switching PEOs require a lot of effort?
Switching PEOs is not necessarily ease to do. Businesses wishing to make the switch face the difficulty of handing over an already established system to another PEO. This includes the transfer of private information that is governed by relevant data regulations, including GDPR or HIPAA.
During such a change, there is a greater chance of oversights and human mistakes, which can be costly for businesses. But when it comes to handling something as important as international payroll and labour laws, there can’t be any room for error—even the smallest mistake could result in fines or penalties.
How to choose your new PEO partner
By now, you most likely know what went awry with your previous PEO provider – and know how to avoid the same mistakes. Here are some other key considerations to help you select the right PEO for your business needs in Africa:
- Is the PEO provider present across Africa, or only in a select few countries?
- Does the PEO provider have in-depth local expertise?
- Can the PEO 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 PEO provider’s communication style?
- What is the PEO’s provider track record like?
- Has the PEO worked with companies in your industry before?
- If you are an NGO, does the PEO have experience working with NGOs?
- What employee benefits options can the PEO offer?
- Can the PEO offer competitive medical insurance and life insurance, to begin with?
When is the best time to switch PEO providers?
Because of benefits arrangements mostly beginning on January 1st, the best time to switch PEO providers would be before then. That being said, since the year-end is typically a busy time for businesses as they scramble to meet client demands before annual closure, it might be better to plan a switch for the beginning of Q4.
Otherwise, the beginning of a quarter is generally a good time to make a switch.
Step-by-step: how you can switch PEO providers
Inform your PEO service provider
First, you need to break the news to your current PEO. They may suggest remedial actions, which you may decide to follow. Because a PEO change is a significant administrative change, it is a good idea – whenever possible – to explore remedial plans and other options before resorting to the ultimate decision of switching providers.
Notifying your PEO also enables it to begin preparing the required documentation.
This is also an important step because there may be a notice period in your contract with your current PEO. Typically, this can last anywhere from 30 days to more.
Decide on a new PEO provider
Before you engage in any administrative procedures, choosing a new PEO provider is key, because they will help you through the transition, taking on administrative and legal burdens. Besides, you will need to have a new provider so they can securely receive, store and manage employee data, among other things.
Transition plan
Once you have informed your PEO provider, and you are certain that you wish to switch PEO partners, you must begin working on a transition plan together with your old and new PEO partners. This transition plan will also see you designate special teams to manage the transition process internally.
This transition plan will include:
- An employee communication plan
- Employee benefits coverage continuity – matching current employee benefits
- An action plan for any foreign employees on work visas
Handover dates
When creating your transition plan, you will also need to establish a clear timeline, including takeover and handover dates, dates for key processes like data transfers and employee workshops to better understand a new payroll system if necessary.
Notify employees
Changing your PEO provider implies significant administrative changes – and employees need to be made aware of this as early as possible. Because such changes can create doubt or fear, employees need to be reassured and given time to share their opinion and feedback about this switch.
This will make for a smoother transition, with less friction and less resistance to change – ultimately keeping morale up ahead of the big transition.
Transfer of employees and data migration
Next, one of the main processes of a PEO switch has to do with data transfer. This includes employee records (personal information, leave taken till date, entitlement to employee benefits…), life insurance and medical insurance data, among other things.
This is highly sensitive information, and there must be protocols in place – in compliance with legislation like the GDPR and HIPAA – to secure it as it is being transferred and stored.
Firstly, your old PEO should no longer have access to this data. Secondly, your new PEO must meet the criteria for the transfer and storage of all your employees’ sensitive data.
Employee benefits
Next, one of the main processes of a PEO switch has to do with data transfer. This includes employee records (personal information, leave taken till date, entitlement to employee benefits…), life insurance and medical insurance data, among other things.
This is highly sensitive information, and there must be protocols in place – in compliance with legislation like the GDPR and HIPAA – to secure it as it is being transferred and stored.
Firstly, your old PEO should no longer have access to this data. Secondly, your new PEO must meet the criteria for the transfer and storage of all your employees’ sensitive data.
Transfer of employees and data migration
Next, one of the main processes of a PEO switch has to do with data transfer. This includes employee records (personal information, leave taken till date, entitlement to employee benefits…), life insurance and medical insurance data, among other things.
This is highly sensitive information, and there must be protocols in place – in compliance with legislation like the GDPR and HIPAA – to secure it as it is being transferred and stored.
Firstly, your old PEO should no longer have access to this data. Secondly, your new PEO must meet the criteria for the transfer and storage of all your employees’ sensitive data.
Payroll review
Once your employees have signed the new employment contracts, comes the process of onboarding them on your new PEO partner’s payroll system.
With the number of sensitive processes and people involved in a PEO 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:
1. Do you currently have a notice period from your PEO?
2. Does the PEO currently have any foreign workers with work visas attached?
3. Seasonal variation and commercial interests: Is now the right moment to make such significant organisational adjustments, or would doing so hinder productivity and expansion for the company?
4. Are there any ongoing initiatives that won’t be impacted by a PEO switch or other organisational shift?
Why switch to Africa HR Solutions?
Africa HR Solutions is a true partner, well beyond being a service provider. We act as an extension of your team and offer reputable PEO solutions throughout 46+ African nations. Our comprehensive understanding of African laws and customs, along with our extensive coverage of the continent, make us the most qualified to assist your business’s expansion 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.
