strong compliance with operational maturity. In tight markets, this trust and speed can be a deciding factor in outpacing rivals. Frequent Pitfalls Even well-resourced executives stumble over contractors to save costs, only to face retroactive penalties. 2.Overlooking new digital tax systems in countries such as Kenya or Nigeria. 3. Underestimating termination costs in non- “at will” markets. 4.Mishandling personal data under laws like South Africa’s POPIA. 5.Mismanaging payroll funding when exchange rates swing sharply. Anticipating these challenges allows leaders common issues: 1. Misclassifying employees as
violations can hit global headlines. Operational disruption : Work permits can be revoked and accounts frozen, stalling entire operations. These are board-level risks with financial, operational, and reputational consequences. Outsourcing Models: EOR and PEO Few multinationals can cost-effectively build full compliance capacity in every market. That is why Employer of Record (EOR) and Professional Employer Organisation (PEO) models are gaining traction.
Both models give companies faster market entry, compliant hiring, and scalable infrastructure without setting up multiple entities. Treating Compliance as Advantage Forward-thinking leaders are reframing compliance not as overhead but as a competitive tool: Faster hiring : Local expertise allows firms to recruit talent within weeks instead of months. Reduced risk : Proactive monitoring helps prevent lawsuits and regulatory delays. Employee trust : Timely payroll and fair contracts boost retention. Investor assurance : Boards and shareholders equate
EORs serve as the legal employer on paper, handling
payroll, contracts, and compliance obligations. PEOs create a co-employment arrangement:
In tight markets, this trust and speed can be a deciding factor in outpacing rivals.
they manage HR, compliance, and
administration while the client company directs day-to-day work.
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ISSUE 16 GLOBAL PAYROLL MAGAZINE
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