British businesses are looking to hire talent in South Africa after the Chancellor’s tax raid made home-grown employees less appealing. Jobs in recruitment, marketing, and administration are bearing the brunt of the offshoring trend as UK companies search for ways to keep their payrolls under control because of higher employment taxes, outsourcers say.
Read the full article on The Telegraph: “British businesses offshore jobs to South Africa as labour costs rise”
The last Budget increased the cost of employing staff by raising employers’ National Insurance contributions from 13.8% to 15%. If you compare salaries to those in South Africa, the equivalent tax for employers in South Africa is 3%, with salaries 50% lower than in the UK.
Sir Mel Stride, the shadow chancellor, said: “Labour’s jobs tax has forced businesses into paying an additional £900 in National Insurance for a worker on the average wage – that’s a devastating blow for small firms. It’s meant job losses, frozen pay, cancelled investment and now a worrying rise in jobs being sent abroad.”
The Legends Agency, which helps UK firms hire staff in South Africa, recorded a 25pc increase in inquiries after the rise in employers’ National Insurance contributions came into force in April. Alex Fenton, The Legends Agency Group CEO, said “We are seeing swathes and swathes of skilled jobs that should be going to entry-level British talent, if I’m honest about it ... going to staff in South Africa”.
South Africa is attractive because the country has good education levels, a one-hour time difference from the UK, and the vast majority of people speak English. Since Labour came to power in July 2024, more than 145 British businesses have used the agency to hire over 1,100 remote employees based in South Africa. The agency estimated the jobs could provide £9m in tax receipts if workers were based in the UK.
When comparing 1,100 employees to an entire country, the number might not be large, but it could be the tip of the iceberg. The Financial Times reported that Grant Thornton, the accountancy giant, had outsourced all 40 of its UK secretarial roles to India. Fenton said: “You’ve clearly got these jobs that entrepreneurs are just looking at and saying, ‘I don’t want to hire in the UK any more. It’s incredibly expensive.’”
As employment costs continue to rise in the UK, more businesses are likely to explore offshore hiring as a practical way to manage expenses while maintaining skilled support functions. South Africa’s combination of lower labour costs, strong education levels, English-speaking talent and a minimal time difference with the UK makes it an increasingly attractive destination for these roles. While the long-term impact on the UK job market remains a subject of debate, the growing number of companies turning to South African professionals suggests that offshore hiring is becoming a more established part of how British businesses build and scale their teams.
