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Hiring Employees

7 Factors To Determine Who Are Your Employees (And Who Aren’t)

With the rise of the gig and on-demand economies as well as remote workplaces, the question of whether an ‘independent contractor’ is in fact an employee is perhaps more significant than ever.

Kyle Torrington

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Independent Contractor Or Employee

This question has been considered in a number of countries around the world in relation to, for example, Uber drivers, where certain drivers in California have been ruled employees inspite of Uber having ‘employed’ them as independent contractors.

So what’s the significance between the two? Well, being deemed an employment relation means that the Basic Conditions of Employment Act and Labour Relations Act apply, and you would have to register for the Skills Development Levy, Unemployed Insurance Fund, Workman’s Compensation, SITE and PAYE for example, which entails continuous monetary contributions.

Related: Reality Check: You Probably Don’t Own That Work You Outsourced

Also, ending an employee’s employment is far harder than terminating an independent contractor, as the provisions of the Labour Relation Act, in so far as the procedures are concerned, such as disciplinary hearings and the like, are required to be followed in the case of dismissing an employee versus an independent contractor which normally entails issuing a simple notice of termination.

Code of Good Practice tells you who is and isn’t an employee

In South Africa, in December of 2006, the NEDLAC Code of Good Practice was released, setting out certain rules outlining when a worker will in fact be regarded as an employee.

Of particular importance in the Code is the presumption of who is an employee in terms of both the Labour Relations Act and the Basic Conditions of Employment Act.

This presumption applies to all workers if their gross earnings before any tax, pensions, medical aids and other similar payments have been deducted are below R 205 433.30 per annum.

Factors to determine who are your employees

The Code sets out seven factors to determine whether someone is in fact an employee. These factors apply regardless of the form of a contract. For example, placing a label on the relationship such as a ‘Sub-Contractor Agreement’, ‘Agency Agreement’, ‘Independent Contractor Agreement’ etc, even if recorded in the contract itself, cannot be taken as conclusive proof that that worker is an independent contractor.

In practice, if a worker can establish that one of the seven factors is present, unless the ‘employer’ can then prove otherwise, the worker is regarded as an employee.

Related: Cover All Your Bases When It Comes To Employment Agreements

project-staff-management

Let’s have a look at the seven factors a little closer:

1The manner in which the person works is subject to the control or direction of another person

If a worker is subject to the demands, orders or instructions of the ‘employer’ or employer’s personnel as to the manner in which the worker is required to work, this factor is generally presumed to be present.

In contrast, this factor is not present if a person is hired to perform a task or produce a particular product and is entitled to determine himself the way in which the task is to be performed.

If the head office of the company operating a ride sharing app instructs its drivers on exact directions to take for each trip, and how they should behave and dress, this factor would most likely be present.

2The person’s hours of work are subject to the control or direction of another person

If a worker’s daily working hours or total monthly work hours are set out in a contract, this factor may indeed be present.

For example, an Independent Contractor Agreement which requires the worker to work between 9am and 5pm every weekday would certainly be indicative of this factor being present.

3 The person forms part of that organisation

For example, at a manufacturing plant, if a worker is hired to operate the machinery which performs a core function of the manufacturing plant, this factor will most likely be present.

4The person has worked for an average of 40 hours per month over the last three months

This factor is self-explanatory and is predominantly present if a worker works for a full nine-hour per day work week per month for an ‘employer’.

5The person is economically dependent on the other person

This factor is generally present if the worker is dependent on the ‘employer’ as their sole or principal source of income.

With the exception of part-time employees, the Code says that this factor won’t generally be present if a person is genuinely self-employed or still has the capacity to contract with other people to provide services.

If the driver of a ride sharing app is entirely dependent on the owners of the app as a source of income, and the driver is not discernibly self-employed or does not have the time to build up relationships with other possible ‘employers’, then this factor will in all likelihood be present.

6The person is provided with the tools of trade or work equipment by the other person

In our ride sharing example, if the employer provides the driver with the vehicle to be used, whether the vehicle is provided free of charge or not, this factor will most likely be present.

7The worker only works for or renders services to one person

A writer working for a particular blog twice a week, another blog twice per week and a news outlet once per a week, would generally be regarded as an independent contractor and not an employee.

As you can see, the lines between an employment relationship and independent contractor arrangement are often blurred and require careful navigation.

Kyle Torrington is the co-founder of Legal Legends, a company that aims to revolutionise the legal industry by being Africa’s first eCommerce website for quality legal services aimed specifically at start-ups and entrepreneurs

Hiring Employees

4 Benefits Of Business Process Outsourcing For Small Businesses

Using data outsourcing has many benefits for your small business and is something you need to consider should you want to improve and make your company more efficient.

Tasmin Copley

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outsourcing-for-small-businesses

When starting a business, you don’t always estimate the amount of work and skills needed to operate and manage your business efficiently. But that’s where business process outsourcing (BPO) comes in handy, and can save many startups from going under before they’ve barely begun making waves in the market.

Take a look at your small business. Are you constantly searching for qualified and experienced people to undertake tasks but never having the funds to employ and fill all the necessary roles? Do you find that most of your time, as manager, is spent on administrative tasks that don’t directly contribute to any of your company’s goals?

The way you’re going to save your business and grow it at the rate you initially projected, will be by outsourcing these activities to computer and data processing services who can overlook those details while you attend to your business. Using data outsourcing has many benefits for your small business and is something you need to consider should you want to improve and make your company more efficient.

1. Rely on the professionals

One benefit of using data and form processing services is that you can rely on the professionals to get the job done. Their business is to monitor, process and report on the processes of your business that you entrust to them. And you won’t have to worry about hiring and training a whole new team or spending countless hours on those mundane tasks. Data processing, marketing or accounting is their speciality and they know exactly what they’re doing.

And the best part is that there are a variety of business processes that can be outsourced.

Related: The Surprising Tasks Your Competitors Are Outsourcing

2. Save time on most business processes

A great benefit of BPO is that you will no longer be responsible for the tasks you didn’t necessarily sign up for when you started the business. This means you can take every minute saved by outsourcing to develop the areas of the business that made you start up in the first place.

Different department functions that can be outsourced include:

  • Human resources: The hiring process can be a long and draining one. Outsourcing your human resources means there are other people responsible for filtering through hundreds of CVs and applicants based on what you’re looking for through a series of high-quality-candidate databases. All you’ll need to worry about is the final interview and meeting.
  • Marketing: Understanding your target audience is important in business. And marketing is the tool that allows you to engage, manage your brand reputation, acquire new customers and maintain your current client relationships. But if you aren’t a marketing firm, there’s a chance you’ll miss these ROI opportunities, which is where outsourcing would be the best option.
  • Customer service: Not many small businesses can afford to operate and set up a 24/7 call centre within their offices. Outsourcing call centres to manage your customer support is more common than you may think and will save you the effort and resources of creating a new department in your company.
  • Finances: You business’ finances are arguably the most important asset that needs to be tracked and managed. We can’t all be financiers and since finance is so important in business, outsourcing your business finances is advisable. You won’t find yourself spending more than you can afford, you won’t have to worry about payroll, tax preparation or any accounting activities. Your financial BPO will take care of it all and you can stick with what you know best about business.

By making use of business process outsourcing, you’re allowing yourself and your employees the opportunity to hone in on the skills you already have instead of trying to find time to learn new ones that aren’t related to your everyday job description. This will also allow your company to become more efficient in its industry as the focus will be solely on the business’ product or service offering.

3. Reduce operation costs

The reason why small and large businesses choose to outsource business processes is the opportunity to reduce operating costs. Also, it’s incredibly convenient and stress-relieving to not have to try and do a job you don’t quite understand and aren’t qualified to do.

BPO reduces operating costs as you won’t have to spend money on new employees, employee training or the equipment and software to carry out those tasks. You will also be saving yourself time on tasks that don’t need to be done in the office. That time can then be put into business-focused activities that can make your company more efficient in the product or service it offers customers.

Related: 5 Time-Consuming Tasks Small-Business Owners Should Outsource

4. A competitive edge

Having the extra time to focus on the real work your business does, will give you a competitive edge. And not only in the industry of small businesses. Having the resources to make your business products efficient and the best on the market has the potential to make you a competitor amongst larger businesses.

By choosing the right BPO companies, your business will also be operating with the latest technology and software – without you having to pay extra for it. This is an edge above most small business who attempt to do everything on their own before they’ve established the necessary profit margins to make those upgrades and remain consistent in their development.

These are just four of the many benefits of BPO. Make the smart business decision and use BPO to your advantage. It’s a quick, easy and affordable way to build your company and witness exponential growth.

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Hiring Employees

How Your Company Can Easily Attract Fresh Talent

Well, there are many ways to go about attracting fresh talent, the easiest of which are…

Tasmin Copley

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employees-talent

The minds that are walking out of university these days have so much potential and power which many companies are longing for. Fresh new minds that are eager to start working and applying themselves in the “real” world. The best interests of your company lie in attracting this fresh batch of millennial talent. So how exactly could you do that?

Provide opportunities to learn

Millennials are after experience and career growth. They want to know that the company they will be working for is prioritising that journey. And what better way to encourage them on their career path than providing learning opportunities within the business?

A few of the main ways companies provide their employees with opportunities to learn are through internships, learnerships and mentorships.

  • Internships: An internship is like a pre-entry level position where interns have an opportunity to learn the ropes and figure out if this is, in fact, the industry or career they want to be building a career in. This is an extremely valuable and appreciated opportunity for most graduates and a way for companies to easily spot talent. If both parties are happy with how the internship has been carried out, all the employer needs to do is offer up a permanent post.
  • Learnerships: What is a learnership? And what are the benefits of a learnership in a company? A learnership is an educational training programme that companies offer to employees which allows them to gain work experience while learning industry-relevant theory. It’s more than a basic internship as learnership jobs can lead to a registered NQF qualification. This is beneficial to the company as they can be certain that all their employees are equally knowledgeable about their work and millennial applications will be flooding in for the opportunity to add further education and experience to their CVs through this opportunity.
  • Mentorships: Fresh minds are still newbies in the business and want to know that they’ll be taught (not spoon fed). This is where companies can offer mentorships that new employees can work with seasoned employees to gain business tips and insights that will help them become better. This is what graduates are looking for, an opportunity to learn from the best in order to be the best.

Related: Hiring Tip: Ask About The Candidate, Don’t Talk About The Position

Be an innovative environment

You can’t expect to attract fresh minds and creative talents when your company lacks an innovative environment. People want to know that they will be challenged and inspired every day by their work environment. And it’s not about working overtime to keep your new employees stimulated, but about making sure they have the resources, creative team members and freedom to think outside of the box.

They need to know that their innovation will be encouraged and supported. When advertising for vacancies, don’t be afraid to mention some of the innovative projects you’ve done. It will definitely excite any innovative minds on the job-hunt and those are the types of people you need to elevate your company.

Provide flexible work schedules

Flexibility is the work-trend at the moment and young people are looking for flexibility from their jobs. Being flexible with your work schedules is in your company’s best interest for more reasons than just the talent you’ll be attracting:

  • Discourage the turnover rate of employees as they will have an increase in employee satisfaction.
  • Increase in productivity from punctual and purposeful employees.
  • And there will be an opportunity for extended business hours to increase customer satisfaction.

If you offer and implement it in the right way, flexible working hours are probably the easiest way to retain current and attract new talent to your company.

Be digitally relevant

Having the latest technology and digitally-advanced business processes shows new talent that you’re all about adapting to the constantly changing environment. They will want to work for you because this strive for relevance means they will constantly have opportunities to improve and find new ways of taking the company and industry forward.

Related: How To Know If You’re Mismanaging Your Staff

Start by improving your office processes and being more digitally savvy. The more “ancient” your ways of doing things, the less fresh talent you’ll attract. People don’t want to sit and struggle through admin when their time could be spent on something more useful and relevant to the current era.

By making the most of technology, it also shows that your company chooses to be “green” with how they conduct business. And being part of a “save the planet” movement while doing your day job is what most young people strive to do these days.

Every company can easily attract fresh talent by implementing the above practices. And the resources that are spent is nothing compared to the revenue these new minds can potentially bring in by being part of your company.

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Hiring Employees

Youth Employment An Opportunity

South Africa has a high youth unemployment rate – it is vital for business to consider alternatives for youth employment.

Henry Sebata

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youth-employment-an-opportunity

A young female graduate with hands-on experience in setting up and running community projects, had resourcefully turned a hobby into an income-generating small business to support herself,  while seeking employment… a skilled person, wouldn’t you say?  It took her five long months to find employment – and in that time she received 50 rejections – 50 rejections with no useful feedback as to why she was being turned down.  We employed her – and within the first few days she’d surpassed our expectations, had added ‘value’, so much so, that two weeks later we assigned her to a project.

It’s this kind of potential that company recruitment approaches seem to overlook!

There are 6-million unemployed young people in South Africa – and the social and economic transformation economy that  is crucial for the country, is an economy that has been growing at less than the minimum 5-6 percent required to shrink unemployment, largely due to the under-performance of main institutions.

Related: Entrepreneurship – A Greener Pasture For Young People

Business accustomed to turning problems into opportunities of value-creation regards the South African Education and Training system as one that does not deliver in equipping young people with the requisite work and readiness skills.  There are government tax breaks and grants which provide opportunities for short term employment, but unfortunately these do not create value, nor are they sustainable as they are not used strategically.

Last year I had the good fortune to attend the Youth Employment Enterprise Skills Solutions (YEESS) summit in Nelson Mandela Metro – engaging with the young attendees I found that they were determined to change the view held by business that they are considered a risk, to one which recognises that they can, and do, add value and assist in realising opportunities, particularly because of their age -related attributes that give them the edge.

Young people

  • are a cost advantage – they cost less (South African staff is paid on the basis of the years of work rather than the value)
  • have a higher level of energy – they work faster and for longer hours
  • have flexibility – they learn new tasks /systems quickly, and are often more innovative
  • can increase revenue – they enjoy engaging with customers, and being ‘entrepreneurial’ (eager to promote products and services in the market)

Business should consider these opportunities – the model that many businesses currently use pays young people a stipend which usually just covers their living costs and employs them for a short period; and then the norm is to “find” something for them to do to keep them busy… a soul-destroying experience that in no way creates value and is certainly not one on which to build a career.

Related: Funding And Resources For Young SA Entrepreneurs

Alternatives to the existing model are to:

  • clearly pinpoint the opportunities and define the value (that the potential employee is required to add)
  • provide training – measuring potential is a challenge – a short training programme for job-seekers can clearly identify the ones who benefit most, and are thus likely to be the most valuable – and there is the plus of 4 BBBEE Skills development points for the training of unemployed people
  • provide a ‘proving’ period (3 to 12 months) where goals, expectations and support are clearly laid out -this provides an important business foundation experience in a productive environment considerably improving the chances of the young person’s absorption into the business culture.

By changing the way one views youth unemployment – to see youth employment rather as an chance to reduce costs, increase revenue and contribute to the building of skills and training future entrepreneurs – presents the perfect opportunity for business to contribute to the country’s future stability and gain economic returns.

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