Borderless hiring — hiring without location constraints — is here to stay. Along with many work and workplace shifts, borderless hiring became a macro-trend that was set in motion in the wake of the pandemic, particularly in the tech space. In 2022, 58% of businesses hired fully-remote international talent, with an additional 27% of executives considering the move. Safe to say, those numbers will only increase in 2023 and beyond.
Borderless hiring is especially beneficial for organizations employing contingent workers. While it broadens the availability of skilled talent, reduces costs, and allows flexibility for workers and companies, hiring from different countries also presents the challenge of adhering to each one’s rules and regulations. But with the right knowledge and best practices, neither physical boundaries nor compliance need to limit the growth of your workforce and business.
Compliance considerations around the world
Compliance requirements can vary depending on where your workers are located, but they typically fall under the categories of worker classification, labor laws, tax identification, and data security. Let’s take a look at what these requirements entail:
Worker classification
It’s crucial to correctly classify your workforce based on their nature and scope of work, position in the company, and payment structure, among other factors. Worker misclassification can result in severe financial and legal consequences for your business and affect workers’ rights and protections. Workers in North America, Europe, and Australia are commonly categorized as full-time employees, part-time employees, contingent workers, or independent contractors.
Labor laws
Workers are covered by national, regional, and local laws, and it is the organization’s responsibility to ensure that these laws are abided by. Labor laws can range from minimum wage rates to benefits, overtime compensation, and health and safety guidelines for workers’ wellbeing. In countries like the United Kingdom and Germany, workers could be entitled to holiday pay, health insurance, and pension plans.
Tax identification
International workers are subject to different tax procedures as per their country’s tax identification system. For example, the Social Security Number (SSN) in the United States, Tax Identification Number (TIN) in the European Union, and Social Insurance Number (SIN) in Canada are used by the national revenue authorities to record tax brackets, payments, and returns.
Data security
Owing to the omnipresence of data usage and exchange today, the focus on data security is at its peak. Companies must comply with local data privacy laws when managing personal information related to their workforce, through measures like getting consent to collect and use workers’ personal information, as well as complying with regulations related to data access, safety, and storage. According to the United Nations Conference on Trade and Development (UNCTAD), at least 71% of countries enforce data protection legislation and 9% intend to do so.
Mastering overseas compliance
Building a borderless workforce can be complex, but not impossible to achieve. Here are six steps based on findings from Deloitte’s Global Remote Work Survey that you can implement to ensure that your global contingent workforce is fully compliant and thriving:
- Conduct a needs assessment: Determine the types of workers you want to hire by evaluating specific and holistic business needs like the scope of projects, skills required, and objectives to fulfill.
- Identify target countries: Understand where your desired talent is located or where you want to expand your workforce by analyzing labor market conditions, local laws, cultural nuances, and other factors that may impact your program.
- Develop a sourcing strategy: Design your recruitment strategy to reach candidates through online job portals, staffing agencies, or talent suppliers who have a presence in your target countries.
- Support strategy with technology: Use innovative tools like a VMS network with a built-in hiring marketplace to access thousands of candidates worldwide and seamlessly transition them into your workforce management program.
- Partner with local experts: Work with financial and legal specialists in your target countries who can help you deal with compliance aspects that cannot be handled remotely.
- Craft a communication and continuity plan: Set up periodic communication to inform all stakeholders about your program’s objectives and progress, and also monitor the overall health of your workforce.
Grow your global workforce with Prosperix
Contemplating the right time to take the first step? Or looking for the right platform to enhance the success of your existing workforce program? No matter what stage you’re in, Prosperix can help.
Our VMS Network, integrated hiring marketplace, and MSP expertise can streamline your hiring and workforce management processes, from curating pre-screened talent pools, to automating compliance checks, building a centralized database, and providing real-time reporting and analytics. Use our proprietary workforce solutions and services or benefit from a combined offering to beat compliance challenges, cultivate a global workforce, and achieve extraordinary outcomes.
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