More companies headquartered in Europe and the US are building teams in African markets. The strategy gets written in a boardroom in London, Amsterdam or New York. The execution happens country by country, several thousand kilometres away.

Paul Kimani, co-founder and CEO of Workpay, spends part of every quarter on this side of the map, meeting customers and partners. In August he sat down in Amsterdam to talk about what he hears in those rooms, and where the plan and the operating reality come apart.

Three things came up that companies consistently underestimate. None of them is the line item they budget for.

The first question from a European board is about control

Ask a European or US buyer what they need in an African market and the conversation opens with governance, risk and compliance. Ask a team already operating on the continent and it opens with systems and speed of execution.

"What I mean by control is that people are more concerned about governance. People are more concerned about risks. People are more concerned about compliance."

Paul Kimani, co-founder, Workpay

Both groups are asking the right question for the seat they sit in. A decision maker in Amsterdam is signing off on a country they will visit twice a year, and they need to know it holds without them watching it. A country manager in Nairobi is measured on how fast the team gets paid and how quickly the next hire starts.

When a European board opens with control, that is not hesitation. It is the question that decides whether the plan gets funded.

Africa is not one market, it is 54 operating environments

The most expensive assumption a leadership team can carry into an expansion plan is that the continent behaves as a single market.

"The biggest misconception that international companies have in expanding into Africa is that Africa can be viewed as one large market, but the reality is that Africa is as diverse as its 54 countries."

Paul Kimani, co-founder, Workpay

Countries share borders. Some sit inside the same regional bloc. That does not make them the same place to operate. Compliance is different, tax is different, and banking infrastructure is different. What works in Lagos does not transfer to Nairobi because both are on the same continent.

"It's great to have an African wide strategy. What you have to also understand from an operations point of view is that it is going to be country by country."

Paul Kimani, co-founder, Workpay

A continental strategy and a country-by-country operating model are two different documents. Companies that only write the first one discover the second one anyway, usually in the middle of a payroll cycle.

Registering the entity is the easy part

Most companies that come to Workpay have already set up an entity. That step rarely goes wrong.

"Setting up an entity, registering and everything, that's the easy part. But ensuring that that entity is clean and operating on a day to day, that's the hard part."

Paul Kimani, co-founder, Workpay

What follows is the part that gets underestimated. Regulation shifts. Tax rules change. Banking and payment infrastructure work differently from what the team is used to at home. On paper all of that reads as administration, so it lands with whoever has capacity.

Then something breaks. A filing is missed, a payment does not clear, or someone turns out to be on the wrong contract.

"Once this thing starts breaking, they quickly turn out to become actually a leadership problem. And they have to be fixed at the leadership level."

Paul Kimani, co-founder, Workpay

That is a week of senior time nobody planned for, spent on a country that was supposed to run quietly in the background. If you are entering a new market, budget the management attention the same way you budget the entity.

What it looks like once you are in three countries

Two kinds of companies come to Workpay, and they arrive with opposite problems.

The first is hiring its first employee in an African country and needs a route in that does not start with company registration. The second has been operating across several markets for years. Nothing is broken there. They simply cannot see it in one place: a different payroll provider in every country, a different compliance calendar, no single view of what is owed to whom.

Workpay is sector agnostic, so what those customers have in common is not their industry. It is their stage.

"By average, looking at what we have, we are mostly serving customers that have employees in three countries."

Paul Kimani, co-founder, Workpay

Past the first country, the question stops being how to hire and starts being how to hold it together. Three payroll cycles, three tax regimes and three sets of filings is the point where a spreadsheet and a local accountant per market stop being a system.

Employment infrastructure you build once

Hire in one country, then a second, then a third, and the underlying work is the same every time. Employment law, payroll, tax, compliance. Most companies rebuild that stack in every market and pay for it three times over.

What Workpay builds is employment infrastructure: one platform underneath all of it, so the back office stops growing every time the business crosses a border.

"We want to give them that platform or that infrastructure that allows them to assemble and hire talent in any country, expand within the African continent without having to again redo the work that they did around employment law, around payroll, around taxes, around compliance."

Paul Kimani, co-founder, Workpay

Infrastructure is the right word for it. Nobody wants to spend management time thinking about it, and everything else in the expansion plan depends on it.

Three countries is where the plan gets tested

Everything above points at the same gap. Control is the question that funds the plan, and it gets answered country by country. The entity is signed off in a board meeting and maintained by whoever has capacity. The third market is where that arrangement stops holding.

Companies that expand well across Africa are the ones that decide who owns payroll, tax and compliance in every market before the third country decides it for them.

This is a short version of a longer conversation with Paul Kimani, recorded in Amsterdam while he was in Europe meeting customers and partners.

If your Africa strategy is further along than your operating model, we should talk. We will walk through what hiring, paying and staying compliant actually looks like in the countries you are entering, country by country.

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