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Given the labour shortage that many European countries are currently facing, some companies have turned to an alternative talent pool to meet their needs: Africa.
And as we’ve discussed before, there are some pretty compelling reasons to consider hiring in Africa. For one thing, Africa’s working-age population is growing fast, and is predicted to increase by 450 million by 2035. In contrast to Europe and North America, Africa’s population is also getting younger: according to one estimate, young Africans will make up 42% of global youth by 2030.
And of course, the huge difference between the cost of living in most African countries compared to Europe means that there’s a huge opportunity for cost savings for European companies that are willing to hire in Africa.
But hiring an employee in another country isn’t as simple as posting a job description and waiting for the candidates to come rolling in. There’s a huge number of regulatory and cultural considerations that you need to think about before you can hire in Africa — we’ll discuss some of the major ones in this article.
6 key considerations for companies hiring in Africa
Africa is a diverse continent made up of 54 individual countries — and the employment landscape looks different in each of them. That means that, if you’re interested in hiring in Africa, you’ll need to thoroughly investigate the situation in the specific location you want to hire in.
But if you’re just getting started in your journey towards hiring African talent, it can be difficult to know where to begin. Read on for six key considerations that you should keep in mind as you begin exploring the African talent market.
Mandatory life insurance
In certain countries, it’s compulsory for employers to provide life insurance coverage for their employees — and you could face fines or penalties if you don’t comply.
For example, in Nigeria, employers have to maintain a group life insurance policy for their employees, with each employee receiving a policy worth at least 3x their yearly salary.
This sort of policy is also common (though not mandatory) in several other African countries, including Senegal and Uganda.
Mandatory medical insurance
Providing health insurance coverage for employees is also a common requirement. For example, in Nigeria, employers are mandated to register as an employer and make contributions to the state health insurance system on behalf of their employees.
As of 2022, employers in Kenya must match employee contributions into the National Health Insurance Fund (NHIF), and employers in Benin must also provide health coverage for their employees. And in Tanzania, employers are required to ensure their employees have health coverage, either by making social security contributions or by providing private insurance.
There are also many countries where health coverage is not required by law but is still an expectation. That means that not providing it for your employees in those countries could reflect badly on you as an employer.
Quota systems for foreign employees
If you want to hire foreign employees in an African country, you may also have to navigate different rules.
For example, in Mozambique, there are quotas on the number of foreign workers you can engage as a percentage of your total workforce. This is different for large, medium and small companies, with a limit of 5%, 8% and 10% respectively.
There are some exceptions: for example, special investment projects might be exempt from the rules, and you can apply for permission to hire additional foreign workers for short-term projects.
Although this type of rule is currently relatively rare, a bill introducing similar legislation is currently being considered in South Africa. As well as putting limits on the number of foreign employees a business can employ, the bill would also require employers to ensure workers have the right to work in the country, and to prove that no South African candidate can be found before engaging a foreign worker.
Rules and customs around 13th and 14th salaries
Another important consideration is the requirement to provide employees with a ‘13th salary’ — and sometimes even a 14th. This is a custom that exists in many countries around the world, where employees receive a bonus at a certain time of year (and sometimes two bonuses).
For example, in Angola, employers must pay their employees a 13th salary payment to coincide with the employee’s holiday, and a 14th payment in December. In Mauritius, there’s a statutory requirement to pay an end-of-year bonus equivalent to 1/12 of the employee’s annual compensation.
And again, there are many countries, including Nigeria and South Africa, where this is not a legal requirement, but is still expected. Not providing this to employees when they expect it could hurt your retention rate and your employer brand.
Seniority bonuses
In some African countries, it’s also customary to provide bonuses to employees for staying with your business for a long time. In Mali, for example, employees have the right to a bonus after 3 years of service. And in Morocco, employers have to pay bonuses as follows:
- 5% of salary after 2 years’ service
- 10% after 5 years
- 15% after 12 years
- 20% after 20 years
In other countries, seniority bonuses like these may be expected, but not required by law.
Cultural considerations
Your African employees will likely have a different approach to work than their colleagues in your home country. And, if you want your relationship with them to be fruitful, it’s important to be sensitive to those differences.
For example, a study concluded that while the US has an individualistic culture, Nigeria is more collectivist — which could impact the way Nigerian employees approach work. Other people who have spent time working with Africans mention that they may have a more flexible sense of time than their European counterparts.
Of course, none of this means that business relationships between African employees and European or North American employers can’t work. But they’re much more likely to be successful if you’re aware of the cultural differences between you and willing to accommodate different ways of working.
The solution: Hire in Africa through an Employer of Record (EoR)
In this article, we’ve tried to give you an idea of some of the different regulations you might come across when hiring in Africa. But the reality is that we’ve barely scratched the surface.
To make your African expansion a success, you’ll need to do extensive research into the norms and expectations in the country you want to hire in, to ensure you’ll be able to attract and retain talent. And you’ll also need an in-depth understanding of the laws and regulations that govern employment in that country — or you could put your business at risk.
If that sounds like a lot of work, don’t worry — there is another way. Hiring employees in Africa gets a lot easier when you do it through an Employer of Record, or EoR.
An EoR is an organisation that hires local talent on your behalf. This saves you both the expense of incorporating in every country you want to hire in and the administration of engaging and onboarding talent.
Crucially, EoR providers also have the local expertise needed to confidently navigate the hiring landscape in each country. That means you can be sure that your employees are engaged compliantly and in accordance with the law. And, because EoR providers are familiar with the local norms and customs surrounding work, your employees will get the HR experience that they need and expect.
Easily hire in Africa with CXC
Looking for an EoR provider to help you hire talent in Africa? Look no further! At CXC, we’ve been helping businesses like yours to compliantly engage workers around the world for more than 30 years.
With our Employer of Record solution, you’ll still be in charge of the day-to-day management of your employees — but we’ll handle everything else. That means you won’t need to worry about withholding taxes, providing statutory benefits or aligning with local payroll customs. Instead, you can focus on finding the best people for the job — wherever they are.
Want to find out more about how we can help you to compliantly and confidently hire in Africa? Speak to our team to get started.
