Why outsourcing HR in Africa?

Have you considered the benefits of outsourcing your HR in Africa? If the COVID-19 pandemic has taught us anything, it is that agility and flexibility in organizations are critical to business survival.

An organisation’s human resources department is responsible for a variety of functions. Human resource departments oversee employee payroll and tax filing as well as legal compliance, staff training and development or maintenance of files and records.

Outsourcing HR in Africa can be a good option when you may just not have the relevant expertise in-house.

In business, getting caught in the weeds can interfere with big picture thinking. Just handling payroll and taxes eats up a lot of time. That’s why many businesses prefer to outsource HR support services.

Pros & Cons of outsourcing HR in Africa

A business aims at getting a trusted source of information regarding HR trends and compliance to best anticipate decisions. When a global crisis happens, it happens fast. It is critical to have a partner who truly has an ear to the ground. This way, you can access any information you need the second it becomes available. This enables your business to act instantly, and puts it in a position to adapt rapidly and confidently. Outsourcing makes sure your business is kept up to date of anticipated events and helps you to understand them.

Risk Management

Human resources outsourcing firms help businesses minimize risk. Employment and local labor laws change regularly. It can be difficult for employers to remain up-to-date on regulations that affect the workplace. It is therefore critical to have a partner

Cost Savings

On foreign markets, business developers or small branches can’t reasonably justify the expense of hiring a full-time HR employee. Outsourcing helps reduce the cost of maintaining non-revenue generating back-office expenses. Furthermore, outsourcing costs are variable and can be reduced when business needs warrant.

Efficiency

In Africa, outsourcing HR helps employers and managers spend less time doing paperwork. Thus, they get more time to work on improving the efficiency and effectiveness of the workforce. The internal HR team becomes more strategic, it creates greater efficiency.

Nevertheless…

The risk in excessive outsourcing is the loss of connection between company management and its employees. But good outsourcers know how to overcome that.

There is also a loss of in-house expertise. When outsourcing HR functions, companies must assign a point of contact to keep an eye on the tasks executed.

Eventually, there’s a good chance a response won’t be as quick from an external company as it would be from an in-house HR person. Unless you find a partner who can be present on site in your offices.

Business development and HR outsourcing in Africa

Africa is made of emerging markets trying to catch up with economic development. As a result, they are evolving at a fast pace. Their rules, procedures and administrative compliance are constantly updated. On the other hand, their business environment is difficult to understand, no clear information available. It creates a high risk of exposure for foreign organisations. Outsourcing HR tasks may be an interesting safety net to gain in productivity while ensuring your compliance with local authorities.

Let’s say you were appointed to run a branch recently created by your firm on a new market in Africa. Very quickly, you may tend to think you can do many tasks yourself. There are only a few of you, so what’s the worst that can happen?

Unfortunately, between managing benefits, payroll, time off, onboarding, and everything else that’s going on, when will you have time to talk to investors, build the product, or make significant business developments?

When you start your business, your priority is to hire people who are building the product and growing the company. Every new company needs to fill the roles that move the bottom line and grow the business.

At some point though, a business needs people to take care of the back office operations of the company. You need someone responsible for coordinating interviews, sending offer letters, managing benefits administration, and much more.

The problem with that job is that it’s incredibly multifaceted. And it can be hard to find all those skills in one person. You might find yourself beefing up your back office with multiple people just to get everything done.

So what HR tasks can be efficiently outsourced in Africa?

In general, HR key tasks like payroll management and employment law compliance can be automated and easily left to an outsourced HR provider.

Payroll and Related Tax Services

One of the biggest challenges for HR is the process of running accurate, on-time payroll. Not only is this a time-intensive task, it can also spell trouble if you’re not complying with payroll tax regulations.

Employment Law Compliance

Payroll tax compliance is probably top-of-mind for most businesses. But there are numerous  local employment-related regulations that employers need to comply with. For example, training requirements, hiring process compliance and other workplace regulations.

At this stage, it often makes sense to outsource HR functions. There are many companies available to help you manage the majority of the tasks mentioned above. Your focus should be on growing and managing your team, not whether they are getting their pay-check on time.

Companies at this stage often consider a professional HR support services supplier. This supplier may also offer a variety of HR services to answer most of questions that come up around managing your team.

Conclusion

As a foreigner on a new market, you may not know all rules and procedures of the country you operate in. When it comes to Human Resources, an oversight on compliance can jeopardize all your efforts to take-off. As a result, outsourcing HR support services in Africa may be an interesting move.

However, it can be difficult to find reliable partners in Human resources who will be truly customer-oriented and there is always the issue of availability and reactivity inherent to the outsourcing solution. You may find efficient solutions within incubators, they usually provide access to information, network, expertise and offices. My advice would be to join an incubator dedicated to foreign companies.

At BIZIWIZ, you can benefit from a trusted HR partner with recognized expertise that will be available in the incubator premises to deliver Human Resources support services directly in your office at anytime. This way, you have the best of both worlds