High-growth businesses constantly seek opportunities to enter new global markets to gain market share. HR managers can think about how the business can scale quickly yet remain flexible and lean when entering and hiring from a new foreign market in a fast-evolving and unpredictable business environment.
Secondly, HR managers can think about a strategy for businesses to hire candidates efficiently and speedily while minimizing all the legal risks in cross-border expansion, considering the time spent, procedures, and costs involved.
The current business environment demands more speed, agility, and leanness in international expansion processes, and this article will provide actionable insights for hiring managers to address their top concerns.
1. Global recruitment strategy
The global disruption has made remote work prevalent and accelerated borderless hiring. Businesses aiming to scale fast with leaner costs and procedures will primarily experience a competitive advantage with remote teams.
According to Gartner, the adoption rates of borderless hiring worldwide have significantly increased, with 31% reported from 2020 to 2022 compared with 25% in 2019.
Regarding technology talent working in a fully remote borderless environment, 58% of organizations have at least some arrangements, which has doubled compared to 4 years ago. 27% of CEOs are now actively exploring solutions to recruit borderless tech employees as this trend grows.
This trend is even higher for leaders actively hiring technical talents, with 85% intent to hire IT talents to work remotely for the company; 58% of companies have already hired one, and the remaining 27% are planning to hire one to join the digitization race and to cope with the rising global competition of talent shortages.
Is your company ready to join the global competition to stay lean and agile in business operations and hiring processes?
2. Expanding into new markets with agility and flexibility
The safest and fastest way for HR managers to assist the company in hiring international candidates from the globally competitive job market is to engage a global “employer of record” solution provider.
What is an EOR (employer of record services), and how does it help? An EOR is the legal employer of the employees the company is hiring and shares the complete legal responsibilities and liabilities of the hiring company.
An EOR handles all employment-related tasks, including employment contracts according to the local Labor laws, payroll in the local currency, company and payroll taxes, benefits, social and health insurance, and HR advisory on compliance risks.
3. The rise of Employer of Record (EOR) solutions' needs
The ease with which businesses can expand into international markets without the need for local incorporation, immigration compliance, the absence of complicated income tax reporting, and following the local laws and payroll tax requirements are all factors leading EOR services to be the future of work.
According to global market research, the global EOR market is projected to grow at a CAGR rate of 6.8% between 2022 to 2028. In 2021, the global EOR market size was at USD 4,235 million. It is expected to reach USD 6,794 million in 2028 with the rising needs of international companies adopting the borderless hiring approach 1.
4. Future trends: Hiring globally
From the rising demand of the EOR trend above, it is unsurprising that the hiring and retention concerns have become the top 3 priorities for CEOs this year 2 as borderless hiring gained traction.
According to a survey with 25,000 US respondents, 58% of Americans work from home at least one day a week 3, and 35% reported fully working from home 5 days a week.
Data Science has been the fastest-growing job since 2012, with 650% of growth, and the market is projected to reach $230 billion by 2026, according to LinkedIn's emerging jobs report. There is also a 22% of high growth demand for software developers anticipated by the U.S. Bureau of Labor Statistics.
The work trend has changed; employees are enticed to accept positions where they earn the same salary but live in a less expensive location. Approximately 1 million city dwellers are leaving US cities and relocating to suburban areas.
With the accelerating 5G technology, HR managers must prepare to join the borderless hiring journey. According to the United Nations Conference on Trade and Development, the 5G value chain will create 22 million jobs by 2035, and China will be the biggest contributor (9.5 million) compared with the U.S. (3.4 million) (6).
So where is the potential region should companies look into when hiring globally?
5. Stay ahead of the curve: Talent acquisition from Southeast Asia
Many companies are seizing the opportunity to hire remote talents in Southeast Asia. SEA is on track to surpass China's 2.8% for the first time with a growth rate of 3.2%.
Cisco System, a US network equipment manufacturer, is an example of a global company seeing the global expansion opportunity in SEA as the demand from the US and Europe market have declined.
According to Cisco, its networking academies in Southeast Asia have trained 1.3 million students, with 30% of women 4.
When asked why the company is willing to invest in the SEA's countries, the Senior vice president at Cisco attributed it to SEA countries already investing in themselves.
One of the most significant market trends is the growing opportunity for e-commerce and digital services such as Software as a Service presented by the region's enormous population of digital natives.
SEA has 440 million internet users, with internet penetration reaching up to 75%, and the internet economy is estimated to be worth $360 billion in 2025.
Regarding Foreign direct investment, Vietnam and Indonesia have attracted the largest FDI inflows 5 over the past 10 years, with nearly $242 billion, followed by Malaysia and Singapore ($153-164 billion).
We have seen how inviting the SEA talent market is, but what is the easiest and fastest way to acquire international candidates?
6. Overcome the challenges: Hiring without constraints
How can an EOR help a company achieve high growth and unlock its global growth potential in this competitive hiring market?
- EOR helps to hire employees on a contract or project basis depending on the company's needs without being tied to a specific staffing model or country.
- Collaborating with an EOR allows you to hire from multiple countries WITHOUT setting up different legal entities, significantly minimizing your financial and local compliance risks to ZERO.
- In the event that the hired candidate or expanding market fails to meet your company's goals or expectations, you can quickly exit the market without committing to a long-term presence in the country, which is associated with achieving high growth.
- An EOR offers a wide range of hiring solutions for companies to get multinational job seekers across the world. Therefore, an EOR is able to find a new hiring position or replacement and onboard the candidate in a short period, reducing indirect Labor costs, and ensuring that your business expands and operates with agility, flexibility, and speed.
Be ahead of the curve in this rapidly changing business environment today!
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References
- Global Employer of Record Services Market Size, Status and Forecast 2022-2028. February 2022. MarketResearch.com
- Gartner Survey Finds 58% of Organizations Employ Borderless Technology Talent. Borderless Recruitment Is No Longer an Exception. November 2022. Gartner.
- Americans are embracing flexible work—and they want more of it. June 2022. Mckinsey & Company.
- Cisco bets on ASEAN digitalization as Western tech demand slows. Oct 2022. NIKKEI Asia.
- How start-ups are boosting investment in South-East Asia. Oct 2022. United Nations conference on Trade and Development.
