Why “Local is Lekker” when selecting a Payroll Outsourcing Provider in South Africa

Global Payroll Outsourcing companies from the US and Europe have entered the South African market over the last few years, with limited success. Although these businesses have global brands and deep coffers, it has not translated into customer (and employee) satisfaction – at least not to the extent that they wished for.

Some of the reasons are:

  • The South African labour market is very different to Europe and North America. We tend to have a more mature approach where people are trusted to “get on with it”. Systems and processes are designed to assist workers as opposed to monitoring them. The prevalence of “work from home” policies post-Covid is testament to that, whereas most global companies have insisted on employees returning to the office.
  • Remuneration policies of global businesses often reflect the economic realities of their own countries and not South Africa. For example, inflationary increases that mirror South African CPI is unheard of and not common practice for our northern hemisphere competitors.
  • South Africa is often seen as a market for “cheap labour”. Business strategies are therefore more to exploit than to grow and nourish.
  • All the points above indicate towards a difference in the underlying employment culture. This has resulted in many experienced payroll professionals leaving global outsourcing companies to join local service providers who are more aligned to the way people are treated in South Africa. This has benefitted local service providers.
  • BEE certification is also not taken seriously by global providers.

 

If you are in the process of appointing a payroll outsourcing service provider, ask them where they come from. It could have a massive impact on the calibre of people you deal with and the quality of service you receive.

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