How a global company saved over $6600/month in payroll costs using Africa HR Solutions

Our client was running payroll for its employees in the call centre sector – a particularly dynamic sector where employee turnover is high. This turnover rate means several things in terms of payroll: employees need to be removed from the payroll quickly, new employees need to be added to the payroll, and both new employees and departing employees need to have their salaries pro-rated according to the number of hours worked before the first or last salary payment. Naturally, calculations also need to account for any employee deductions and employer contributions that apply to a particular employee.

In South Africa, notice periods are relatively short: employees with 6 months or less of service need only submit one week's notice, those with 6 months to 1 year of service must submit 2 weeks' notice, and those with more than 1 year of service or those in managerial positions must offer 4 weeks' notice. To this, add the fact that some notice periods are never officially served, and you obtain a rather haphazard series of arriving and departing employees – a true challenge for any payroll provider in Africa or elsewhere.

The previous payroll vendor accepted changes on the cut off date only, and in their fast-paced ever-changing line of work, sending in changes on the 10th every month really prevented them from capturing any late changes that would result in overpayments. This would include late terminations or someone going on AWOL with a sense they will not return. It was no small shock that they were spending on average about $5,500 to $6,600 in overpayments each month.

As is standard procedure when taking on a new client, our payroll team ran a payroll audit to pinpoint the causes of these overpayments, and to craft a custom solution to remedy the issue. Upon understanding that the high turnover rate could only be countered by a flexible and adaptable payroll solution, our team offered greater room for logging in late changes regarding terminations and onboardings. Knowing that they were being fully supported, our client felt more empowered to work on the origins of these systemic issues.

Working with Africa HR, the team is absolutely fabulous with their quick responses, support and delivery of output each month. Not only is it accurate from the 1st batch, but they support us in allowing us to send in late terminations, requests to put the current month on unpaid leave for those that have gone AWOL. This alone has brought down our negative salary rate to average $2200 each month in the past three months. The last month though was already under $1330 so we are definitely seeing great steps in the right direction.

Working with Africa HR Solutions, the client achieved significant cost savings:
- Reduced overpayments from an average of $5,500-$6,600 per month to an average of $2,200 per month in the past three months
- The most recent month showed overpayments under $1,330
- This represents approximately an 80% reduction in payroll overpayments
- Improved accuracy from the first payroll batch
- Enhanced flexibility to handle late terminations and AWOL situations
- Better support for the dynamic nature of call center operations with high employee turnover