Get All Access for $5/mo

Addressing Compliance Concerns Through Outsourcing The South African corporate landscape is highly regulated from an HR and payroll perspective. Businesses must keep up to date regarding the required statutory updates or risk significant financial penalties.

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur South Africa, an international franchise of Entrepreneur Media.

Bigstock

Unfortunately, small business owners are often unaware of these aspects as they rely on in-house skills and systems to manage this. This is where the importance of outsourcing to a specialised partner can make a significant difference assisting the small business owner to register with the relevant industry bodies and keeping up to date with changing legislation.

Non-compliance pitfalls

  • Incorrect calculation of statutory deductions.
  • A failure to submit statutory submissions to industry bodies like the Department of Labour and SARS.
  • Multiple levels of compliance put pressure on small businesses which may not have the capital required to invest more in their payroll capacity.

Related: How Outsourcing HR Can Optimise Your Human Capital

Risks of non-compliance

  • With monthly salary spend being one of the largest expenses of a small business, non-compliance carries significant financial penalties that can potentially cripple the company or force it to close.
  • HR regulations continually evolve. The legal ramifications of non-compliance and the impact on the HR department, the business, and its employees can be very serious. For example, all designated employers are required to comply with the Employment Equity Act. The cost of non-compliance starts at R1.5 million.
  • Even though an HR generalist may know a bit of everything, the legislative environment requires a specialist given the oversight of such industry bodies as the Department of Labour, SARS, and SETAs.

Benefits of outsourcing compliance

  • Outsourcing compliance empowers companies operating throughout Africa to ensure they meet all regulatory requirements of the countries in which they have a presence.
  • When compliance is managed by employees, they typically work in isolation from other functional specialists. This increases the risks of non-compliance when new legislation is applied. However, to develop in-house risk management and compliance capacity, it is advisable to enter an approved and legal consortium or joint venture, or association with practitioners in related non-HR or employee relations specialisations.

The reality is that when a company faces an audit, investigation, or even litigation, ignorance of the law is no defence.

In the complex environment of employee compensation, benefits, and related issues, it is critical that a small business works with a knowledgeable and trusted partner who specialises in all relevant aspects of compliance.

Related: The importance of outsourcing your payroll

CRS HR & Payroll Solutions is a provider of services and solutions to the Human Resources and Payroll markets in Africa in general and South Africa in particular. Established in 1985, the company has served as the premier provider of HR systems, solutions and remuneration products to business across expanding market segments. Our product portfolio encompasses everything the decision maker in business requires to support the rollout of an effective HR and payroll strategy. The company’s foremost reputation as a reliable service provider and trader in rapidly expanding market segments and to blue chip companies is underpinned by its affiliation and partnership with a number of respected, industry-regulatory bodies. CRS is a signatory to the Information Technology Association (ITA) and a member of the Payroll Authors Group of South Africa. It is also a member of the South African Payroll Association, South African Rewards Association and the Institute of People Management. Its expertise and business acumen within these mission-critical aspects of business management have ensured that it remains an ultra-competitive, secure and unrivalled market performer. CRS provides a service to numerous countries throughout Africa, including Egypt, Kenya, Nigeria, Namibia, Botswana, Swaziland, Lesotho and Mozambique. The continent is viewed as being a thriving, high-growth market and one that the company will continue to add value to.
Marketing

10 Marketing Strategies to Fuel Your Business Growth

You need more than one strategy. You need a strategy for every opportunity.

Thought Leaders

I Learned the Secret to Unstoppable Resilience at a Young Age — Here's How I Use It as an Entrepreneur

There's something empowering — and admittedly, scary — about the idea that we alone control our own stories. Here's how that sense of ownership fuels resilience.

Business Plans

7 Steps to a Perfectly Written Business Plan

Your business plan is how investors and potential partners see that you know everything you can about your industry.

Buying / Investing in Business

98 Percent of VC Funding Goes to Men. Can Women Entrepreneurs Change a Sexist System?

Last year, the largest VC deal for a female team was $165 million -- a stark contrast to that for males, which was $3 billion.