Why Outsource your HR?

The business case for outsourcing the HR function is straightforward – it provides any-sized business with a dependable resource that can be used to effectively manage HR with less cost, less risk and less pressure on resources, if you have the right partner on board.

We do not simply endorse this business model because it is our speciality; there are practical business reasons for companies to take this route – and research backs this up.

For example, according to the ADP Research Institute the most compelling reasons for companies to consider outsourcing their HR function include: stabilise costs, lower risk, increase employee productivity and drive business results.

It is important to place these reasons in context. As we are all aware, South Africa’s economy is not growing as fast as it should be. At the time of writing this piece, the country’s GDP is forecasted to grow by just 1.5% for 2019.

Times are tough for businesses across the board and especially for SMEs, which are acknowledged to be one of the most active and sizeable contributors to the country’s economy.

SMEs, particularly, are under heavy pressure to operate with limited resources – especially spare capital and skills availability.

New developments effecting HR and technology

There really isn’t a great deal available to mobilise a team of HR experts and utilise their skills at any given time to deal with issues like tax, regulatory changes, new developments effecting HR and technology.

Lower risk is actually a lot more strategic than some would imagine. Smaller operations must do all they can to compete, sustain themselves and be agile – there is little room for mistakes, and most importantly the market is not forgiving when it comes to messing up on HR.

It really is all about choice… empowering the decision maker with a powerful alternative. They can outsource all the HR functions, or just some of them to a partner.

As experts have written, the model is described as “a kind of partnership” where the outsourcing provider acts as a “a co-employer of your staff members”.

Outsourcing the HR function

Outsourcing the HR function to an experienced, credible and established service provider will give decision makers peace of mind and time to focus on the business, and on strategy. They don’t have to worry about whether or not the company is complying with legislation, whether employees are effectively onboarded, or if the latest tax information and compliance has been considered and factored into the operation.

Once again ADP Research Institute has listed several key advantages linked to outsourcing some administration functions.

For example, it alleviates the administrative burden on internal staff, enables more cost-effective administration, and enhances integration across multiple benefits areas.

The question of whether or not to outsource something as important as HR is really not applicable anymore. The model works and continues to gain popularity within ever-increasingly competitive and resource-intensive markets. Today, it is really not about whether or not to outsource, but more when and to whom?

The gender pay gap – inequality continues to impact human resources
Gender pay gap inequality still impacts human resources (HR)

Human resource and human capital management experts agree – the fact that women are generally paid less than men in the workplace has a detrimental effect on society.  As one academic put it – “unfair pay practices perpetuate societal inequalities and keep families in poverty”.

As an industry representative organisation run by, and for HR and HCM professionals, CRS Technologies has a vested interest in monitoring the maturity and overall development of HR.

In South Africa equality is enshrined into the country’s constitution and this includes the workplace.

Any bias or inequality, however applied, and based on race, ethnicity, culture, creed, religion or gender, is outlawed. And so, we have to face facts… there is a shared responsibility between the employer and the employee to ensure equality and to enforce the law where inequality exists or is perpetuated.

Remuneration is a very topical issue at the moment, given the lack of representation of women professionals in key sectors such as IT.

Several key themes form the basis for the global gender pay gap

Academics and industry insiders have identified several key themes that form the basis for the global gender pay gap.

According to the SA Board for People Practices, these themes include skills development, careers, modes of work, job changes and pay, wage negotiations and collective bargaining.

The argument made by those protecting the rights of women in the workplace is that skill sets often stereotypically associated with women, including caring and organising, are generally not paid well.

The important point raised by HR practitioners is that it is important to check our personal feelings and bias ‘at the door’ and realise that these could easily become part of the workplace processes and procedures.

There is also the issue of wage negotiations and the role of unions and industry representatives. The argument is that in many instances it is males who are chief negotiators or representatives, which means that they don’t necessarily always have women’s rights and best interests at heart.

Skills availability will remain a challenge to industry and there is some merit in the debate that skills diversity, equality, application and relevance should begin at school level – even primary school level.

The days of some skills sets being only accessible and relevant to one gender over another are over… today, multi-skills, soft skills and professional certification remain in high demand.

Eradicate unfair treatment

We have to bear in mind that HR and employment legislation, including the Basic Conditions of Employment Act, has been put in place to eradicate unfair treatment and that covers remuneration.

The fundamental, especially when it comes to HR and HCM, is that women have as much right as their male counterparts to have their skills recognised, to be remunerated fairly for their skills, their experience, market knowledge and their value to a business as an asset.

That is the premise for what we all strive for – a workplace that enforces and protects equal opportunity, and gender equality.

Access to a tax advisory service during tax season adds value
Access to a tax advisory service adds value in a substantial manner during the annual tax season.

We all know the drill by now… around this time of the year, tax season, businesses have to ensure compliance with SARS legislation governing the submission of returns.

We also all realise that we are operating in a vastly different economic environment, in which many businesses are struggling with cash flow and unable to pay outstanding tax debt to SARS.

It is not surprising that many business owners choose to take the wrong route as a short-term solution and actually avoid submitting their returns.

Our partner and tax business continuity specialist Tax Debt Compliance is pretty clear when it comes to its advice on this issue: not only is it illegal, but not submitting a return will incur severe penalties and high interest charges for your business.

So what are operators to do? It is a bit of a catch-22 situation – not submitting may ease the pressure on cash flow (albeit temporarily), but it is not a true reflection of the state of the business and will end up costing more – however, submitting may be a stretch too far!

That is why we have partnered with Tax Debt Compliance to provide a tax advisory service.

How does this service help?

Well, it comprises a range of tax relief mechanisms:

  • Negotiation of affordable instalment agreements with SARS on behalf of your business;
  • Compromise applications to SARS which, if approved, will enable your business to settle tax debt at a reduced amount;
  • Tax due diligences to ensure compliance with South African tax legislation;
  • Formulation of tax opinions for businesses considering entering into complex transactions that could hold significant tax consequences.

These are the immediate benefits to clients looking for some kind of intervention and assistance with tax.

Not only does this mean you are actually being proactive in dealing with the challenges, you are also being realistic in terms of where the business is positioned and have a credible way of influencing the outcome.

Our tax advisory service is there to be used and to help… contact us now for more information!

Flag of Kenya
News on Kenya’s National Housing Development Fund

The latest news about Kenya’s National Housing Development Fund (NHDF) is that its implementation has been delayed.

On Monday 27 May 2019 the implementation of the NDHF levy was extended by the Employer and Labour Relations Court, which effectively barred the government from enforcing the disputed 1.5% housing levy.

This levy was supposed to take effect in May, in accordance with a government directive in April making it mandatory for employers to deduct and remit the levy by the 9th of every succeeding month.

It has come to light that the case challenging the levy was initially filed by Central Organisations of Trade Unions (COTU), as well as various other parties, including the Trade Union Congress of Kenya, Consumers Federation of Kenya (CoFeK) and the Federation of Kenyan Employers (FKE).

As a leading human resources and human capital management services provider, established in Africa to keep abreast of these markets across the continent, CRS is committed to informing you – our customer – of changes to regulation. That is our mandate and that is exactly what we will continue to do.

For more information and advice, please contact our legislation team at info@crs.co.za.

How to become the employer your staff love

Making employees happy might seem like an oversimplified way to deal with the complex issues modern organisations face, but as Ian McAlister, General Manager of CRS Technologies South Africa, points out, it is fundamental to the success of a business. This is where human resources (HR) and payroll come in.

“In a way, HR and payroll become enablers to transforming a business into the caring employer its employees love. Fundamentally, happy employees are not only more loyal to the organisation, but they are more committed to ensuring customers are happy as well. And in a competitive landscape, this can mean the difference between success and failure.”

So, how does HR and payroll figure into this transformation mix?

Simply put, the former deals with the people processes in a business, while the latter is focused on the payment of salaries. In the past, many people only cared about doing their job and getting paid for it. Over the years, this rands and cents approach has shifted significantly to one that is more integrated and life-focused.

“Yes, people do their jobs because they get paid to do so, but it is about so much more than that,” says McAlister.

Empowering people with skills and tools they never had access to before

“The democratisation of technology is empowering people with skills and tools they never had access to before. This is creating an increasingly sophisticated workforce where people bring unique skills to an organisation beyond the scope of what their jobs might require. HR and payroll can unlock this hidden value by being more human-centric and determining where best these skills can be applied.”

At face value, an employer that shows its employees it is more focused on delivering a 360-degree environment where people receive recognition for all the skills they bring to the company, is one where such wellness and other initiatives gain significant success.

“Part of this sees HR and payroll needing to move from the traditionally held perception that it is just there to tick boxes and pay salaries. Instead, today’s HR services encompass a broader list of requirements than in the past. While remuneration is part of this, so too are employee rewards, wellness initiatives, business process re-engineering, skills development, and data analysis.”

Constant pressure to perform

Unfortunately, the evolution of technology has changed the nature of business. There is constant pressure to perform on a local and global level, especially given the competitive nature of the digital environment.

“Decision-makers need to find trusted partners they can rely on to take care of their HR and payroll functions so that they can remain focused on their strategic objectives. This is as much about enhancing existing operations as it is about delivering new platforms for employee engagement. And once this changes, happy employees will result in much happier work environments,” McAlister concludes.

To find out more how HR and payroll can transform your business to become the employer your staff love, please feel free to contact us for more information.

Workplace Skills Planning and Training

Only a few days remain until 30 April 2019 – the final date on which South African employers can submit their Workplace Skills Plan (WSP) and Annual Training Report (ATR) to their respective Skills Education Training Authority (SETA).

CRS Technologies, a leader in HR and human capital management solutions, also points out that employers with a total salary bill of R500 000+ over a 12-month period are required to pay SDL levies to SARS every month.

SARS distributes these fees to the respective SETAs which, in turn, allocate the fees to grants.

SETAs offer mandatory grants to employers investing in their employee development, while discretionary grants are awarded to develop scarce skills.

This is where CRS can – and does – make a difference, by helping employers secure a return on the investment in their employees.

Nicol Myburgh, who heads up the HR business unit at CRS Technologies, says the company is ideally positioned to help businesses submit their SETA reports and ensure that they benefit from the process.

“The submission process is complex and requires a meticulous approach to gathering and applying information,” says Myburgh.

”The relevant legislation is extensive and must be carefully considered when compiling the workplace skills plan and annual training report. This is where CRS Technologies can assist clients in understanding the legislation and its impact, and advise them on the best practice process to compliance.”

Compliance with SARS and SETA regulation is mandatory and while Myburgh advises a careful and attentive approach, he also recommends enlisting the services of an experienced and knowledgeable partner on board for the best results.

Health and safety continues to have a strong focus in the local mining sector with accidents and illegal activities continuing to be of concern. However, beyond this, how has health and safety expanded into other sectors in the market?

For one, evolving technology has enhanced the ability of the health and safety officer to fulfil their role. There is a strong administrative component in health and safety that can now be linked to productivity solutions and automated to some extent.

But it is not just about technology. Even though HR is involved with health and safety to a limited extent, it is rather a resource to be used. This is especially relevant in terms of participating in a safety committee and often being involved in the safety structure and the provision of protective clothing and the like. However, it is up to each organisation to define to what extent HR is involved in this process.

Even though health and safety, to a certain extent in non-industrial organisations, was viewed as a ‘necessary evil’, this has changed. In South Africa, there is a growing culture of safety awareness. Often, health and safety is paired with quality environmental matters. This results in the appointment of a SHEQ (Safety, Health, Environment, Quality) officer or a SHE (Safety, Health, Environment) officer.

Adding impetus to this is a massive increase in the awareness of environmental issues amongst the younger generations, particularly when it comes to climate change. This has a spinoff in creating a mindfulness in organisations when it comes to health and safety and any associated environmental issues.

After all, employees have a massive influence on practical health and safety. They have a duty to work in a safe manner. If they do not, they may be disciplined. If misconduct in respect of safety matters is of a gross nature, they may be dismissed.

An example in an industrial organisation would be if a machine-minding employee sleeps while the machine runs. This is seen as gross misconduct and often takes place where employees are required to work night shifts. Where employees effectively do their jobs in a safe manner daily, they ensure safety in the workplace. Where they are negligent, they may create a safety hazard.

All told, health and safety will remain integral to the success and growth of any organisation irrespective of size and industry. How it chooses to approach it, remains up to the decision-makers.

Election Day is scheduled for 8 May 2019, don’t forget to update your payroll calendars.

2019 is predicted to be a monumental year for South African businesses, challenged by the need to grow the economy and called upon to contribute meaningfully towards job creation – especially the youth.

2019 has an added dimension of importance for local business owners. They need to be aware that 8 May 2019 has been scheduled and officially recognised as the day the country goes to the polls.

This was declared and published in the Government Gazette 42250, Proclamation No. 8 of 2019, dated 26 February 2019.

What does this mean for employers? Well, those employers making use of leave calendars on their Payroll systems should update the calendar by adding 8 May 2019 as a public holiday.

Otherwise they may end up being taken by surprise and that will not be good for business!

As always we are here to help… contact our legislation team at info@crs.co.za if you require any additional information.

Importance of the Health and safety officer

The importance of the health and safety officer is to fulfill a critical function to the success of the modern organisation. As the name suggests, the person is there to promote health and safety inside a business. But what does this exactly entail?

In conjunction with department managers, the health and safety officer will normally write safety procedures, enforce them, do occupational health and safety training, monitor and manage the safety system, keep records and tool registers, and do inspections, amongst other duties. As with many other roles at a business, the person can be an internal appointment or outsourced to external consultants.

However, it does not have to be an either or scenario. Even where larger companies have internal safety specialists, they use external consultants given how the broad level of knowledge required in health and safety is significant.

There is also still some confusion as to the differences between a safety officer and a safety representative.

The former is an appointment made by the employer to facilitate their health and safety standards. There is no obligation in law to do so, but it is highly recommended. The latter is a statutory appointment. The employer is therefore obliged to do so because of statute. This person is effectively the representative of the workforce in respect of matters of health and safety.

For a company to create an enabling environment for the health and safety officer, it needs to understand its obligations in terms of health and safety both from legal and moral perspectives. There also needs to be a strategy that deals with health and safety as well as defining the role of the health and safety officer.

When accidents occur, the employer is subject to the ‘reasonable man test’. The question is asked, “What would a reasonable man do in ensuring health and safety in a given situation?”

If the employer fails such a test, there are prescribed penalties. In a case where negligence is uncovered, this may be construed as criminal negligence and criminal prosecution of the employer and responsible employees could follow.

In South Africa, particularly in the industrial, construction, and mining sectors, a culture of health and safety has been embraced to a large extent. Unfortunately, the role of health and safety is still neglected in many smaller office and technology businesses where there is a lack of awareness of statutory requirements, consequent to the environment being perceived as being ‘safe’.

Companies must therefore carefully review the health and safety procedures they have and identify where there are still gaps to fill. This is where the health and safety officer becomes a critical asset in this dynamic new business environment.

If South African businesses were in the dark about what lies ahead financially, Finance Minister Tito Mboweni made things very clear in his 2019/2020 Budget Speech and important changes affecting payroll.

This budget will affect the pockets of employees and employers, and businesses need to pay close attention to several aspects that will impact on Payroll – that is if they want to cut costs, remain agile and continue to be competitive.

Of course as your trusted HCM, HR and Payroll partner, we’ve highlighted these points, those that will impact either directly or indirectly on corporate fiscal management going forward.

  • The budget proposes tax increases of R15 billion in 2019/20 and R10 billion in 2020/21 relative to the 2018 MTBPS estimates. The additional revenue in 2019/20 will be raised primarily from limiting relief for the effects of inflation on personal income tax
  • Carbon Tax will be implemented on 1 June 2019
  • Fuel levy increases by 29c per litre
  • The government has allocated R567 billion for social grant payments. In 2019, the grant values will increase as follows:
  • R80 increase for old age, disability, war veterans and care dependency grants
  • R40 increase for the foster care grant to R1 000

The child support grant will increase to R420 in April and to R430 in October.

It is important to note that there are no changes to personal income tax brackets, while the tax-free threshold increases from R78 150 to R79 000. This is a way for the government to generate revenue – by not adjusting the income tax brackets for inflation the government will raise R12.8 billion.

Medical tax credits have not changed.

The ETI will be increased from 1 March 2019. From this date employers may now claim R1 000 for employees earning R4 500 monthly and the incentive will reduce to zero when an employee earns  a monthly income of R6 500.

South African citizens who spend more than 183 days in employment outside South Africa will have to pay income tax on foreign employment income that exceeds R1-million.

Click through to www.crs.co.za or email info@crs.co.za or for more information on tax rates from 1 March 2019 to 28 February 2020,

As always CRS has the expertise and resources to guide all our clients.