Unpacking the talent equation: Europe’s need meets Africa’s potential
Countries around the world will soon be facing the impacts of a huge demographic drought. Put simply, populations in Europe and North America are not growing at a fast enough rate to meet the demands of the labour market.
Across Europe, birth rates have been stagnating since the 1960s. The total birth rate (TBR) is currently below the replacement rate of 2.1 in all 27 of the EU’s member states.
At the same time, major advances in healthcare mean that people in Europe are living longer than ever before. As a result, the share of the population aged 65 years and over is increasing in every member state.
The fact is, if European companies are not already facing a massive talent shortage, they soon will be. According to one study, by 2050, there will be 95 million fewer working-age people in Europe than there were in 2015.
Africa’s potential: a reservoir of talent for European employers
When populations decline, countries often rely on immigrant labour to fill the gap. But with much of Europe facing the same problem, immigration from neighbouring countries isn’t really an option here. And progressively stricter policies have made it difficult (not to mention expensive) for companies to sponsor non-EU citizens to emigrate.
However, in today’s ultra-connected world, collaboration doesn’t need to happen within the same building. Many European employers are turning to another talent pool to meet their needs: Africa.
Unlike in Europe, the working-age population in Africa is growing every day — and it’s set to increase by 450 million by 2035. According to one report, one in every three working-age people in the world will be African by 2075.
Every year, between ten and twelve million young Africans enter the job market, but only around 3.1 million new jobs are created. That means that there’s huge potential for European companies that tap into that talent pool.
And there are plenty of other reasons why sourcing remote talent in Africa is a good idea too:
- Time zone overlap: Time zones in Africa range from UTC-1 to UTC+4, meaning there’s a significant overlap with Europe. This makes remote collaboration much easier.
- Proficiency in European languages: More than 20 countries in Africa count English as one of their official languages, including Nigeria, Kenya and South Africa. And it’s widely spoken in other countries, too — even when it’s not an official language. According to one estimate, there are around 6.5 million native English speakers and 700 million non-native speakers across the continent. French is also widely spoken, with around 96 million speakers across the continent. And you’ll also find Portuguese spoken in countries including Angola, Cape Verde and Mozambique.
- Cost-savings: Hiring remote talent in Africa represents an opportunity for cost savings for European employers. Since living expenses are significantly lower on the continent, it’s possible to hire a skilled technician or engineer (for example) for a much lower rate — while still offering them a competitive local salary.
- Motivation of workers: Given the high rate of unemployment (and particularly youth unemployment) in Africa, there’s a strong motivation among young Africans to work for European companies.
Zooming in on Nigeria: A beacon of African talent
Africa is a huge region made up of 54 independent countries — and discussing the talent situation in all of them would be impossible in one blog post. To give you an idea of the potential this continent can offer, we’re zooming in on one key country: Nigeria.
A young, educated and English-speaking population
Nigeria is Africa’s largest economy, and has one of the fastest-growing populations in the world. Due to various demographic factors, it’s also a very young country: 70% of its population is under 30. The median age in the country is 17.2 years, compared to 42.2 years in Europe and 38.4 years in North America.
Nigeria’s official language is English. Although it may not be spoken widely in rural areas, language education company Education First ranks it as the 27th country in the world and the third country in Africa for English proficiency. That means that European employers should have no problem collaborating with Nigerian talent.
The country also has a robust education system, with around 600,000 people graduating from universities and polytechnics every year. But the number of graduates without jobs is also increasing, and as of 2022, the youth unemployment rate in Nigeria is 53.4%. That means that many young Nigerians are looking outside of their country for work.
In the past, that would have meant emigrating overseas. But in today’s connected world, European companies can connect with Nigerian talent without anyone having to get on a plane. According to a 2022 survey, over 50% of Nigerian recent graduates already work at least partially remotely — so there’s a clear appetite for remote work.
Opportunities for Nigerian talent and European employers
And there’s another reason young Nigerians are keen to work with overseas employers. The Nigerian currency, the Naira, is fairly unstable — and getting paid in a foreign currency gives Nigerian workers significantly more purchasing power. While only 4.17% of recent graduates currently get paid in a currency other than the Naira, this is up from just 1.6% in 2018.
From an employer’s perspective, a key advantage is that Nigerian talent can be hired for a fraction of the cost of the same employee in Europe or North America. This is particularly pertinent for tech roles like software engineering, where salaries have recently skyrocketed.
And Nigeria’s tech talent pool is growing fast: according to a report from GitHub, it’s the second fastest-growing country for software developers in the world, after Bangladesh. The Nigerian government is also supporting the growth of the country’s tech industry through several key initiatives, including a plan to train 3 million Nigerians in tech skills by 2025.
The challenges of cross-continental collaboration
Hiring talent across borders is never without its challenges.
Just because it’s easy to jump on a Zoom call with an employee anywhere in the world, that doesn’t mean hiring them or working with them will automatically be smooth and simple.
Here are a few things to keep in mind if you’re thinking about tapping into Africa’s vast talent pool.
Understanding cultural differences between countries
Our approach to work is largely shaped by the society we grew up in. And not being sensitive to differences can cause problems in your relations with African employees.
For example, some employers have found that African business partners place a greater focus on working towards long-term outcomes than Europeans, and therefore that business is conducted at a slower pace. Africans may also have a more relaxed and flexible attitude towards time, which can be difficult for Europeans to get used to.
Of course, Africa is a vast region with a wide variety of different cultures, languages and belief systems — and it would be impossible to distil the entire continent’s attitude towards work into a couple of paragraphs.
The important thing is to remember that every country is different and that working together to find the best ways of collaborating (instead of assuming things will be done the European way) helps everyone in the long run.
Navigating legal and regulatory concerns
Whenever you hire across borders, there are certain tax and employment laws you need to be aware of. For example, it’s important to make sure you give each worker the right classification — or you could face fines, penalties and other negative business consequences.
Also, before you go looking for African talent, you need to be sure that you can actually employ them. Hiring an employee in a country usually means setting up a local entity — which can be costly and time-consuming. There are other solutions, of course (more on that in a moment) — but it’s important to understand your options before you dive in.
And of course, conducting business in a different country usually comes with certain tax obligations. Depending on the country, you may need to withhold taxes from your employees’ pay, and you might even be liable for corporate taxes. All of this means it’s important to seek the right advice to make sure you know what you’re getting into before embarking on a hiring spree in Africa.
Embracing a new era of talent acquisition
In today’s remote workplace, having a productive working relationship with your employees doesn’t require you to be in the same office — or even on the same continent. And, given the worsening talent scarcity problem in Europe, Africa is a promising talent pool that European employers shouldn’t overlook.
In the decades to come, the companies that get ahead will be the ones that take a forward-thinking, innovative approach to talent acquisition. And building a diverse and inclusive global workforce is a big part of that.
Of course, hiring talent across borders isn’t easy — but you don’t need to do it alone. At CXC, we’ve been helping companies like yours to engage international workers all around the world for more than 30 years. Our solutions include sourcing, engaging and paying workers on your behalf — and we can provide our services in more than 100 countries worldwide.
Need some guidance on your African talent search? Get in touch with our team to see how we can help.
Bron: CXC
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