If you’ve been seriously contemplating expanding your business into Africa but feel concerned about the inherent difficulties that come with doing business on the continent, here’s something you should consider.

As of 2018, there were over 400 foreign companies that had individually succeeded in earning annual revenue of over $1 billion as a result of their investments in Africa (McKinsey Report).

The reality is that despite the challenges that may come with the terrain, Africa’s fast-growing population and markets still present significant opportunities for business in an environment of slowing global growth.

Therefore, there is a tremendous opportunity for growth for entrepreneurs ready to solve problems and innovate to meet Africa’s unmet needs.

If your company is ready to pull the trigger on its expansion into Africa, a great place to start your research is to investigate how to navigate the African talent landscape effectively.

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How to Effectively Navigate the African Talent Landscape

This starting point is crucial because, as we know, without the right team to execute the goals of a business, success is almost impossible. 

Even with years of management experience, picking the right people and maximising their capabilities has always been one of the most complex challenges for organisations. This becomes even more difficult and stressful when hiring for a new entity in an unfamiliar business terrain like Africa.

To ensure success, not only must you focus on getting the best-qualified candidate for the position, but you must also comply with the local labour laws and regulations. This usually constitutes more work than your average human resource or business expansion operations departments can handle.

In these situations, turning to an experienced Employer of Record can prove to be game-changing for your business expansion plans.

This article sheds light on the concept of an Employer of Record (EoR) and how the model operates.

What Is an Employer of Record (EoR)?

An employer of record (EoR) is a third-party organisation that helps businesses hire internationally and takes legal responsibility for compensating those employees in line with the local labour laws.

An EoR enables businesses to employ legal, full-time workers in a different country without setting up a legal entity in that country.

To define it in straightforward terms, if you want to hire someone in a place where you do not own a legal entity (and you don’t want to go through the trouble of creating an entity yourself), you need an EoR.

As a service, EoR essentially refers to outsourcing most of your employer’s responsibilities and liabilities to a third party. An EoR typically handles critical employment tasks such as hiring (at your request) payroll, taxes, benefits, insurance, and immigration. 

What will an EoR like Workforce Africa do for your business as it expands into Africa?

As an international Employer of Record, Workforce Africa operates from more than 20 countries. When we agree with your company and the employees working for your company, we become the legal employer of your new workforce.

Therefore, we are responsible for taxes, labour laws, and other local regulations that might be unfamiliar to you at the start of your operations in any of the countries we operate from.

Essentially, without an EoR, your business cannot employ workers outside your home country or region where your business is headquartered. In that scenario, you would have to set up an entity in the country you wish to expand into.

This process can be expensive and time-consuming. Workforce Africa takes this burden off you.

Here’s a summary of the important benefits that an EoR like Workforce Africa offers: 

• Empowering organisations of all sizes to create operations in new countries easily.
• Helping businesses scale rapidly for market entry and testing.
• Employing world-class talent without relocation and supporting remote teams.
• Helping organisations stay compliant with local employment laws and data protection requirements.
• Onboarding companies’ selected candidates in other jurisdictions, taking care of payroll and offering benefits packages in accordance with local laws and regulations.

Workforce Africa can deliver all of this and more without compromising on compliance or employee experience.

Do your employees work for you or the Employer of Record?

When you engage an EoR, the organisation will only be an administrative employer of your employees.

This means that the EOR will take care of human resources and payroll processing for your international employees, while on the other hand, your management team will be responsible for managing their day-to-day work, just as you would your other staff in your home country.

In addition to taking care of the administrative aspects of your human resources function, Workforce Africa would also ensure that your distributed team members do not feel like second-class citizens but like valued members of your cohesive team.

We would go the extra mile to create a uniform employee experience for your organisation.

Good Read: How to Choose Between a PEO and EOR

How Does an EoR Model Operate?

EoR providers typically use two main models to execute their objectives:

1) Aggregator/Indirect Model: In this setup, indirect EoR providers leverage third-party suppliers to spread their reach and support their services. This model often proves problematic when time-bound tasks arise and the EoR is not in a position to fix the issues directly without referring to its suppliers.

2) Wholly-owned /Direct model:  In contrast, a direct employer of record has its entities and avoids outsourcing. They have full-time staff who are directly tasked with supporting your employees, so when there’s a problem, they can speak immediately with their local support, all in-house support.

Workforce Africa operates a wholly-owned/direct model.

In summary,

Expanding into Africa on your own can be very costly and complex; partnering with an Employer of Record can simplify the process. 

If you wish to get started with an EoR or have more questions, please reach out to us. We’d love to discuss your business expansion plans into Africa.