Ghana, officially known as the Republic of Ghana, is a country located in West Africa. With a population of over 32 million people, Ghana is one of the most populous countries in the region. Over the past decade, Ghana has made significant strides in economic development, democratization and poverty reduction. The country hosts a wealth of natural resources – such as gold, oil and cocoa – and has a highly developed and diversified economy. In the coming years, Ghana is expected to attract more foreign direct investment (FDI) from multinational companies (MNCs) across a range of industries, including technology, agriculture, manufacturing, financial services, construction, utilities and renewable energy.
Bright future: The Ghana Country Partnership Framework 2022-2026, led by the World Bank, seeks to support the government in preserving critical human capital and capabilities while cultivating a dynamic and diversified economy, creating job opportunities for a greener, more resilient and inclusive economy.
Investment opportunities: Ghana’s government has launched several initiatives to promote investment in the country, including tax incentives and the establishment of special economic zones. The country’s economic development plan, Ghana Beyond Aid, aims to make the country self-reliant by increasing productivity, creating jobs and reducing dependency on foreign aid.
Stability: Ghana has a stable democratic government that is considered one of the most transparent and accountable in Africa. The country has a relatively peaceful political environment, which provides a favorable business climate for foreign investors.
Strong innovation footprint: Ghana is one of the most advanced countries in West Africa when it comes to technology. The country is recognized by the Global Innovation Index as being one of the top-performing economies in Africa for business sophistication and creative outputs.
Thriving startup scene and skilled workforce: The country has a strong technology sector and is home to several tech startups, including mPharma, Farmerline and Zeepay. Ghana is an English-speaking country with a highly educated and skilled workforce, boasting a literacy rate of over 80%. This makes it a favorable location for multinational companies (MNCs) to communicate and operate in,
What are the main sources of labor law in Ghana?
The Labor Act 2003 and the Labor Regulations 2007 are the main legal sources governing employment relationships in Ghana. Other important legal sources for employment in the country include the Constitution of Ghana, the National Pension Act and the National Health Insurance Regulation.
Are employment contracts required?
A written employment contract is mandatory if the employment period extends for six months or more. The written agreement must include the employer and employee names, appointment date, job title/grade, pay rate, pay method, pay intervals, work hours, holiday pay details, conditions relating to sickness, conditions related to injury, details of sick pay, information regarding social security/pension, termination process, disciplinary rules, dispute resolution procedure and information regarding overtime compensation.
How does termination work?
In Ghana, termination and dismissal are different concepts. Termination refers to the end of an employment contract without any disciplinary actions, while dismissal is related to disciplinary actions.
To dismiss an employee, an employer must have a just cause that is reasonable and in compliance with the Labor Act or a fair procedure. The Act lists specific situations where dismissal is considered fair, such as misconduct, incompetence or lack of qualification for the job.
On the other hand, an employer can terminate an employee’s contract without any cause, as long as they give appropriate notice or pay the employee’s wages in lieu of notice as per the employment contract.
Unfair termination can occur, according to the Labor Act, if an employee is terminated for reasons such as refusal or insistence to join a union, gender, race, ethnicity, color, origin, creed, social status, economic status, political affiliation, pregnancy, disability or temporary illness.
What is the required notice period in Ghana?
The notice period for termination of employment in Ghana varies based on the length of the employment contract. For contracts of three years or more, one month’s notice or one month’s pay in lieu of notice is required. For contracts of less than three years, two weeks’ notice or two weeks’ pay in lieu of notice is required. For weekly contracts, seven days’ notice is required.
Is severance pay required?
The Labor Act in Ghana allows for compensation upon termination of employment, which includes any remuneration earned before termination, deferred payments, compensation for sickness or accident, expenses related to journey and repatriation (for foreign contracts) and leave entitlements. However, this compensation entitlement does not apply to dismissals.
If an employee is made redundant, they are entitled to redundancy pay, which is subject to negotiation between the employer, employee and employee’s union representative. Temporary, probationary or temporary workers are not eligible for redundancy pay.
Employees who are terminated by dismissal are not eligible for employer grants and benefits.
What statutory benefits are provided to employees in Ghana?
In Ghana, employees are entitled to certain benefits as prescribed by law. These benefits include:
- Social security insurance
- Annual leave
- Sick leave
- Maternity leave
What are typical offerings for supplemental benefits?
Many employers in Ghana provide supplemental benefits beyond what is required by law, such as health insurance, additional leave (e.g. more paid leave or paternity leave), pension plans, bonuses and other forms of employee recognition and support. These benefits can vary greatly depending on the industry, company size and level of employment.
What are some of the challenges MNCs may face when expanding into and hiring in Ghana?
As Ghana’s economy continues to grow and attract more foreign investment, MNCs are eager to expand their operations in the country. However, setting up a business in Ghana can be a complex and time-consuming process, involving bureaucratic delays and administrative challenges, such as managing tax, payroll and benefits. One wrong move can result in legal troubles, penalties or severe damages to a company’s reputation.
How can MNCs overcome these challenges?
Many MNCs are turning to Employer of Record (EOR) services, like GoGlobal, to offer a more agile and cost-effective solution for hiring in Ghana. By partnering with an EOR provider, companies can avoid the tedious process of setting up a legal entity and navigating local regulations for payroll administration.
In addition to streamlining the hiring process, using an EOR service can help MNCs mitigate many of the risks, requirements and restraints that come with doing business in Ghana – while still tapping into the country’s young and dynamic talent pool.
Whether used as a bridge solution to test the market or as a long-term solution for fast, flexible, and compliant hiring, EOR services are becoming an increasingly popular choice for companies looking to expand their operations in Ghana.
With the help of an EOR provider, MNCs can focus on their core business activities with confidence, knowing their HR needs are being managed compliantly and cost-effectively.
What sets GoGlobal apart in Ghana?
At GoGlobal, we prioritize people-first HR. We place a strong emphasis on human-to-human touchpoints throughout the entire hiring process. We also leverage cutting-edge technology solutions to enhance the overall experience.
We’re a global team with a local touch. Our team members span across the world, but we make sure to have local experts in every market we serve – including Ghana. That means you get the benefit of our international experience and expertise, combined with the specialized knowledge and cultural insights of our in-country team. With our dedicated experts in Ghana, we’re able to provide tailored solutions that meet your unique needs and challenges.
Our end-to-end hiring process is designed to deliver a seamless experience for both clients and client workers. From talent sourcing to payroll administration, we take care of everything so that our clients (and their workers) can focus on core business. With our Recruit & Hire solution, we can help our clients source and attract top talent for even the most hard-to-fill positions.
Whether you’re looking to test the market, build a Ghanaian team or simply streamline your hiring process, GoGlobal has the expertise and resources to help you succeed. You can trust us to be your HR partner in Ghana – and unlock the full potential of this dynamic market!
GoGlobal has a significant on-the-ground footprint in Africa, maintaining local offices across 18 countries spanning from North Africa to Sub-Saharan Africa. This extensive on-the-ground footprint empowers GoGlobal to offer exceptional assistance to clients in expanding their operations and building successful teams across Africa.