The world has gone through significant changes in recent years, and in particular in the past 18 months. These changes have permanently refocused many of our traditional business processes and norms. We, as the business community, now use virtual meetings to conduct business in a way we have not done before. We now find it a simple task to link onto online meetings and have meaningful and productive discussions with our staff members, customers, suppliers and stakeholders, no matter where they may be located.
Although technology has led this shift in the way we communicate and implement quality assurance, best practice, and helped define new efficiencies in business governance and norms; other enterprise functional area activities have also evolved to meet the times. These activities include how we now employ, manage, and engage with our staff members.
Helping enterprises with staffing needs The PEO (Professional Employer Organisation) industry began many decades ago, but only in recent times are we beginning to see the significance these organisations have in helping to create effective staff mobility, ensuring local compliance, and attracting and retaining preferred talent.
DRG has been a PEO service provider within the PEO industry for the past 25 years and is part of global networks that help enterprises with staffing needs in South Africa and Africa. These services include Human Resources (HR) administration, compliance, and associated reporting responsibilities. The PEO industry has focused largely on providing services to end-clients to help them ensure their staff are compliant in employer responsibilities such as deduction and payment of employee tax, meeting social security and employer body contribution requirements, and where applicable providing immigration submission support.
Ensuring compliance and risk mitigation In South Africa, many new changes in the way staff are employed, managed, and terminated have been implemented since the new constitution was promulgated in 1996. Thus, resulting in the need for professional and reliable HR administration, compliance, and engagement service providers such as DRG to service this growing employment market.
South Africa has one of the most comprehensive HR frameworks in the world today, and many large and corporate companies use DRG’s services to assist them in ensuring compliance and risk mitigation in their employment relationships. As an example, in South Africa, it is possible for enterprises to engage staff through permanent contracts, fixed-term contracts, project-based contracts, as personal services companies, and through juristic entities. Each of these engagement types have different effects on legislative responsibilities and reporting expectations, and are complicated further through staff earning above or below the Basic Conditions of Employment Act threshold.
DRG’s focus, as a PEO service provider, is South Africa and Africa, and through relationships with in-country partners (ICPs) we are able to ensure compliant employment solutions in virtually every country on the African continent. ICPs work closely together, respecting employment parameters that exist in each country, ensuring their clients’ staff are paid correctly and timeously, and are current and compliant with receivers of revenue, departments of labour, the various statutory employer bodies and where applicable home affairs offices.
PEOs essentially provide clients’ staff with the services of a full HR service. In many circles these services are also referred toas Employer of Record services (EoR) and include providing their clients’ staff members with the same employer representation service. Although PEOs assume all employer related responsivities, including representation and meeting statutory employer responsibilities, they do not under normal circumstances assume direct management control. Reporting generally remains between the staff member and the PEO client, but is tempered by best practice and meeting existing legal employment parameters within the country where they are operating.
Support for offshore enterprises The pandemic and virtual engagement model has fueled the PEO industry growth in many ways. Business leaders have realised that it is now possible to employ staff in different locations. It is commonplace now as an example, for United Kingdom, European and American companies to engage South African staff through employment relationships to provide functional resource support within their offshore enterprises. These enterprises do not want to fall foul of the law and want to be respectful to the country in which they engage staffing resources, and thus look to PEO services providers for support. South African staff are, as we are continually reminded, highly regarded across the world for their commitment, enthusiasm, and broad abilities.
With the PEO industry now well established in virtually every country in the world, it is easy for multinationals and even small enterprises to look beyond their local environments for staffing resources, and in many cases are looking first to engage South Africans.
I was on a virtual call with an Australian business leader a short while ago. He said that in Australia there are in some sectors more jobs available than resources. He said that it is possible that if an advert is placed seeking engagement for a specific skill, that nobody will respond – or if they do it may take eight months. South Africa is as we know desperate to create jobs, and the PEO industry has now made it possible for international organisations to seek and procure resources from South Africa. PEO’s employ staff members directly and assume all employer responsibilities.
This is a wonderful service for clients, who are able to engage suitable resources from all over the world, and have a professional PEO team assisting in meeting all engagement aspects related to staff employment. PEOs must ensure that staff members are properly appointed and are current with all related employment responsibilities and legislation. This is inclusive of providing adequate inductions, and where applicable facilitation of reward and incentive design, performances management processes, misconduct or incapacity hearings, staff retrenchments, terminations, etc.
PEO customers PEO services, although experiencing growth in supporting localised employment, contribute hugely to other areas of staffing engagement as well. Typically, customers using PEO services include: NGOs without a fully-fledged HR department, enterprises funded through government and non-government agencies as the Growth Fund, Jobs Fund, USAID, Global Fund, Bill and Melinda Gates Foundation, John Hopkins University and other; larger enterprises that require project and unusual payroll and employment support; mid-size companies wishing to focus more on core activities and not be pulled into the administration of the business; and SMEs and start-up enterprises that wish to ensure their HR responsibilities are properly structured and fully compliant from the very beginning.
Comprehensive HR service
DRG’s PEO Service is comprehensive, providing services to a wide range of local and international enterprises. This service provides enterprises with a solid labour law foundation, employee taxation guidance and administration, social security and employer body registrations and payments, as well as implementation and coordination of well-structured employee benefit packages as DRG’s Group Allan Gray Retirement Fund, Discovery Medical Aid, and various Life and Risk products and services.
This comprehensive HR service is inclusive of a fully compliant human resource foundation of payroll administration, workman’s compensation cover, unemployment insurance contributions, relative contracts of employment, clearly defined job descriptions, monthly payslips, and annual IRP5’s. The service also meets legislative requirements in employment equity reporting, workplace skills planning and annual training records, and where applicable, application and submission of critical skills and general work permits.
“We”, says Youshi Naidoo PEO Services manager at DRG, “are a team of professionals, supporting the human resource function within all size enterprises, and are ready to provide aid as and when needed. If a company joins our PEO service in the morning, by the afternoon each of their staff members will be fully onboarded and compliant in all aspects of employment related legislation.”
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