Payroll in Africa:
The Many Challenges Met By Employers in 2022

Payroll outsourcing in Africa comes with its myriad of challenges. Between new and changing laws, updated standards in data security and world-changing events, what are the hassles that make Africa payroll outsourcing difficult in 2022? We, at Africa HR Solutions, would like to talk about the obstacles met by HR professionals willing to expand on the African continent.

How COVID-19 made payroll outsourcing in Africa essential?

As if payroll and HR in Africa were not challenging enough already, in comes COVID-19: a global crisis without precedent in living memory. This pandemic tested humanity’s collective capacity to respond to emergencies and find a way to cope with a new way of living. The payroll and HR sector was not spared and had to adapt to the new normal. According to a study conducted by Sage on 1,000 companies, 73% of professionals in South Africa think that COVID-19 made managing payroll and HR functions more complex. This is mainly explained by the fact they had to cope with new evolutions such as remote/hybrid workforces. Time, money and other resources were required to make sure companies could manage this new way of working. Along with the rise of COVID-19 also came new legislation that aimed to assist employers/employees who were impacted by the pandemic. For example, the South African government introduced relief schemes such as the COVID-19 Temporary Employee/Employer Relief Scheme. Having to keep up with new Bills that change the way people are paid in each specific country makes payroll outsourcing more challenging as a result.

Changes in legislation: the eternal boogeyman for HR professionals

One of the recurring complexities employers must face is the ever-changing laws and legislation. Continuous modifications in regulation make it difficult for payroll professionals to keep up, especially when you are dealing with several countries at a time. In Sage’s survey, 89% of participants admitted that they understand how important it is to stay up to date with tax and labour-related legislation.

The ever-growing threat of data security 

In an era where information is stored, shared, and transferred online, enhanced rules have been introduced to protect data security. These include the General Data Protection Regulation (GDPR) or the Protection of Personal Information Act (POPIA) in South Africa. New regulations are only adding to the pile of complexities related to payroll outsourcing in Africa.

How does a payroll outsourcing firm adapt to the situation? 

Faced with all these challenges mentioned above, how is a payroll outsourcing firm expected to respond? According to Kevina Takoordyal, Head of Operations at Africa HR Solutions, it is all about adapting to the situation at hand.