The strategic role of EOR in your expansion in Africa

Most blog posts and articles now start with acknowledging the unprecedented times that we live in and the need to understand how the COVID-19 pandemic has changed our work and how we think about work. However, after 2 years of living with the pandemic, it may be time for HR professionals, executives and even tax and compliance experts to move on from trying to understand the changes and begin to look forward, leveraging our learnings to the advantage of our employees, teams and organisations.

One such adjustment has been a shift in the way we see work. For many organisations, work is no longer in a static location. Organisations are increasingly becoming ‘borderless’ as the definition of remote work is rapidly expanding to encompass international locations and the requisite worker population. This transition has several benefits to the functioning of employees, teams and subsequently organisations:

Obstacles of a global workforce

There is always a significant pause to consider the ‘but’ at this point- and here it is. Whilst remote work benefits organisations, teams, and employees, it also introduces increased complexity to the management of the employment relationship- particularly when it comes to payroll and the associated tax and legal compliance required. Add in the additional layer of managing an international workforce (particularly one in the African continent) and it can become frankly terrifying.

Successfully implementing, managing, and paying a global remote workforce requires a deep understanding of the unique tax and compliance implications within each different country. Thus, one of the most significant risks in employing a global workforce is the negative impact on the employee, global team and multinational organisation should there be insufficient compliance and governance around payroll.

If you are considering remote work/global workforces as part of your future workforce strategy, here are a few broad questions to take into account:

Negative implications of poor compliance

Based on these considerations, let’s take it a step further in considering what negative outcomes of non-compliance or poor governance may be.

Feeling overwhelmed? Don’t be!

You may feel pretty overwhelmed at this point, however - rather than halt the positive change you are contemplating, we encourage you to consider the possibilities for support mechanisms and partnerships to help you navigate these ‘unprecedented times’, in a compliant manner.

One such solution is partnering with an Employer of Record (EOR) company, which allows you to achieve global reach, whilst simplifying and centralising your operational payroll processes. There are two broad benefits to an EOR that we’d like to discuss:

First deep dive point: An EOR can take a lot of the risk and stress off of your plate, letting you and your team focus on the value-adds that you can bring to your individual employees.

Rather than ‘sweating the small stuff', put your energy into growing your people or optimising your teams, which will ultimately benefit your organisation’s functioning.

Organisational functioning can be broken down into different areas that require Executives and HR, Tax or Legal professionals’ attention and support. The image below lists the following areas as points of focus: admin and compliance, employee support, business and functional unit support and establishment of policies and strategies. An EOR can add value at each of these levels, by freeing you up to do more of the fun, value-add stuff.

Second deep dive point: An EOR is a central point of contact.

Partnering with an EOR allows you to manage and pay a global workforce from a centralised rather than a decentralised approach. A decentralised approach looks extremely complicated because it is! Not only is it complex, but there is far more room for error, a lack of control and costly compliance mishaps. By managing the finer details and nuances, an EOR can minimise the risk you take on when expanding your business.

That’s it folks

Global expansion of your organisation is a monumental step forward in your strategy. Given the significance of this step, you may want to ensure to minimise all risks or chances of disruption to your strategy.  Hopefully, we have made the business case for the value that a partner, such as an EOR, can add to your organisation’s success in expanding seamlessly into various unique markets and geographies. Together, we can partner in building a complaint workforce strategy and payroll practice as your organisation, your teams and your employees continue to flourish.

Reference: Deloitte (2018). Best Practice Approach to Global Employment Companies.